Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 29, 2012

Fair Value of Financial Instruments

Financial assets and liabilities measured at fair value on a recurring basis

	Fair Value Measurements at December 29, 2012 Using
Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Cash Equivalents:
U.S. Treasury bills	$	25,050	$	—	$	—	$	25,050
Money market funds		22,686		—		—		22,686
Municipal bonds		—		1,000		—		1,000
Total cash equivalents	$	47,736	$	1,000	$	—	$	48,736
Short-term Investments:
Corporate bonds	$	—	$	59,351	$	—	$	59,351
Municipal bonds		—		45,689		—		45,689
Variable-rate demand notes		—		41,785		—		41,785
Asset-backed securities		—		15,069		—		15,069
U.S. government bonds		12,663		—		—		12,663
International government bonds		—		2,008		—		2,008
Total short-term investments	$	12,663	$	163,902	$	—	$	176,565
Long-term Investments:
Auction rate securities	$	—	$	—	$	11,369	$	11,369
Total long-term investments	$	—	$	—	$	11,369	$	11,369
Total	$	60,399	$	164,902	$	11,369	$	236,670
Liabilities:
Derivative instruments	$	—	$	658	$	—	$	658
Contingent consideration		—		—		2,750		2,750
Total	$	—	$	658	$	2,750	$	3,408

	Fair Value Measurements at December 31, 2011 Using
Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Cash Equivalents:
Money market funds	$	50,851	$	—	$	—	$	50,851
Total cash equivalents	$	50,851	$	—	$	—	$	50,851
Short-term Investments:
Corporate bonds	$	—	$	75,060	$	—	$	75,060
Municipal bonds		—		56,984		—		56,984
Variable-rate demand notes		—		41,280		—		41,280
U.S. government agency		—		19,836		—		19,836
U.S. Treasury bills		8,600		—		—		8,600
Asset-backed securities		—		5,739		—		5,739
U.S. government bonds		2,507		—		—		2,507
Certificates of deposit		—		1,570		—		1,570
International government bonds		—		950		—		950
Total short-term investments	$	11,107	$	201,419	$	—	$	212,526
Long-term Investments:
Auction rate securities	$	—	$	—	$	17,477	$	17,477
Total long-term investments	$	—	$	—	$	17,477	$	17,477
Total	$	61,958	$	201,419	$	17,477	$	280,854
Liabilities:
Derivative instruments	$	—	$	1,998	$	—	$	1,998
Contingent consideration		—		—		876		876
Total	$	—	$	1,998	$	876	$	2,874

Summary of quantitative information about level 3 asset fair value measurements

Auction rate securities

Fair Value at December 29, 2012 (000s)	Valuation Technique	Unobservable Input	Weighted Average
$11,369	Discounted cash flow	Estimated yield	1.24%
		Expected holding period	10 years
		Estimated discount rate	2.78%

Summary of quantitative information about level 3 liability fair value measurements

Contingent consideration

Fair Value at December 29, 2012 (000s)	Valuation Technique	Unobservable Input	Weighted- Average	Range
$2,750	Probability weighted discounted cash flow	Estimated outcomes if milestone goals are achieved	$2.8 million	$1.2 million - $4.2 million
		Estimated probability of achieving each outcome	33%	25% - 50%
		Estimated discount rate	5.10%	n/a

Summary of activity in Level 3 financial instruments

Assets

	Year Ended
Auction Rate Securities	December 29, 2012			December 31, 2011
Beginning balance	$	17,477		$	17,500
Settlements		(6,700	)		(500	)
Gains included in other comprehensive income		592			477
Ending balance	$	11,369		$	17,477

Liabilities

	Year Ended
Contingent Consideration (1)	December 29, 2012			December 31, 2011
Beginning balance	$	876		$	1,780
Issues		4,004			1,025
Gain recognized in earnings (2)		(2,130	)		(1,929	)
Balance at December 29, 2012	$	2,750		$	876
Net gain for the year included in earnings attributable to contingent consideration still held at the end of the period:	$	1,254		$	1,929

(1)

In connection with the acquisition of Ember, Spectra Linear and ChipSensors, the Company recorded contingent consideration based upon the achievement of certain milestone goals. Changes to the fair value of contingent consideration due to changes in assumptions used in preparing the discounted cash flow model are recorded in selling, general and administrative expenses in the Consolidated Statement of Income.

(2)

The Company reduced the estimated fair value of contingent consideration because certain milestone goals were either not achieved or were expected to be achieved at a lower outcome.