Fair Value of Financial Instruments

9 Months Ended

Dec. 28, 2014

Note 4. Fair Value of Financial Instruments

The Company’s financial instruments consist principally of cash and cash equivalents, marketable securities, accounts receivable and accounts payable. The carrying value of accounts receivable and accounts payable approximates fair value.

A summary of the assets measured at fair value on a recurring basis as of December 28, 2014 and March 30, 2014 are as follows:


	Fair Value Measurements Using
	Level 1		Level 2		Total
	(In thousands)
December 28, 2014
Cash and cash equivalents	$	95,508	$	—	$	95,508
Marketable securities:
U.S. government and agency securities		44,035		—		44,035
Corporate debt obligations		—		89,607		89,607
Mortgage-backed securities		—		30,633		30,633
Municipal bonds		—		20,211		20,211
Other debt securities		—		7,938		7,938

		44,035		148,389		192,424

	$	139,543	$	148,389	$	287,932

March 30, 2014
Cash and cash equivalents	$	91,258	$	—	$	91,258
Marketable securities:
U.S. government and agency securities		49,198		—		49,198
Corporate debt obligations		—		74,514		74,514
Mortgage-backed securities		—		32,782		32,782
Municipal bonds		—		25,113		25,113
Other debt securities		—		5,176		5,176

		49,198		137,585		186,783

	$	140,456	$	137,585	$	278,041

The Company’s investments classified within Level 2 were primarily valued based on valuations obtained from a third-party pricing service. To estimate fair value, the pricing service utilizes industry-standard valuation models, including both income and market-based approaches for which all significant inputs are observable either directly or indirectly. The Company obtained documentation from the pricing service as to the methodology and summary of inputs used for the various types of securities. The pricing service maximizes the use of relevant observable inputs and minimizes the use of unobservable inputs. These observable inputs include reported trades and broker/dealer quotes of the same or similar securities, issuer credit spreads, benchmark securities and other observable inputs. The Company compares valuation information from the pricing service with other pricing sources to validate the reasonableness of the valuations.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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