Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 30, 2013

Fair Value of Financial Instruments

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

The following summarizes the valuation of the Company’s financial instruments (in thousands).

	Fair Value Measurements at March 30, 2013 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	$	44,590	$	—	$	—	$	44,590
Municipal bonds	—		2,314		—		2,314
U.S. Treasury bills	325		—		—		325
Total cash equivalents	$	44,915	$	2,314	$	—	$	47,229
Short-term Investments:
Variable-rate demand notes	$	—	$	64,185	$	—	$	64,185
Corporate bonds	—		61,853		—		61,853
Municipal bonds	—		53,033		—		53,033
U.S. Treasury bills	20,323		—		—		20,323
Asset-backed securities	—		15,757		—		15,757
U.S. government bonds	12,658		—		—		12,658
International government bonds	—		1,999		—		1,999
Total short-term investments	$	32,981	$	196,827	$	—	$	229,808
Long-term Investments:
Auction rate securities	$	—	$	—	$	11,189	$	11,189
Total long-term investments	$	—	$	—	$	11,189	$	11,189
Total	$	77,896	$	199,141	$	11,189	$	288,226
Liabilities:
Derivative instruments	$	—	$	433	$	—	$	433
Total	$	—	$	433	$	—	$	433

	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

Summary of quantitative information about level 3 asset fair value measurements

Fair Value at March 30, 2013 (000s)		Valuation Technique	Unobservable Input	Weighted Average
$	11,189	Discounted cash flow	Estimated yield	1.26%
			Expected holding period	10 years
			Estimated discount rate	2.91%

Summary of activity in Level 3 financial instruments

The following summarizes the activity in Level 3 financial instruments for the three months ended March 30, 2013 (in thousands):

Assets
Auction Rate Securities
Balance at December 29, 2012	$	11,369
Settlements	(75		)
Losses included in other comprehensive income	(105		)
Balance at March 30, 2013	$	11,189
Liabilities
Contingent Consideration (1)
Balance at December 29, 2012	$	2,750
Gain recognized in earnings (2)	(2,750		)
Balance at March 30, 2013	$	—
Net gain for the period included in earnings attributable to contingent consideration held at the end of the period:	$	2,750

(1) In connection with the acquisition of Ember, the Company recorded contingent consideration based upon the expected achievement of a milestone goal. 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 it no longer expects the milestone goal to be achieved.