FAIR VALUE FINANCIAL INSTRUMENTS

3 Months Ended

Mar. 31, 2013

FAIR VALUE FINANCIAL INSTRUMENTS

FAIR VALUE FINANCIAL INSTRUMENTS

NOTE 4—FAIR VALUE FINANCIAL INSTRUMENTS

        ASC 820, "Fair Value Measurements and Disclosures" establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair values into three levels as follows:

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  Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

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  Level 2—Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

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  Level 3—Unobservable inputs reflect the Company's judgments about the assumptions market participants would use in pricing the asset or liability since limited market data exists. The Company develops these inputs based on the best information available, including the Company's own data.

        As of March 31, 2013 and December 30, 2012, the Company had $65.2 million and $94.3 million in money market fund investments, which are valued using Level 1 valuation techniques. The Company's fixed-income held-to-maturity securities, which are recorded at amortized cost on the accompanying condensed consolidated balance sheets, have fair values determined using Level 2 valuation techniques of $35.1 million and $35.3 million, as of March 31, 2013 and December 30, 2012, respectively.

        During the fiscal quarter ended March 31, 2013, the Company entered into foreign exchange forward contracts (the "Forward Contracts"), maturing April 11, 2013, to mitigate the foreign currency risk related to certain balance sheet positions denominated in Euros. The Forward Contracts are carried at their fair value of $4.6 million at March 31, 2013, included in other accrued expenses on the accompanying consolidated condensed balance sheet, and have an aggregate notional amount of $152.9 million as of March 31, 2013. The Company has not elected hedge accounting for the Forward Contracts. A net loss of $4.6 million related to the Forward Contracts was recognized as a component of other income (expense), net, for the three months ended March 31, 2013 in the accompanying consolidated condensed statements of operations. No such contract was utilized during the three months ended April 1, 2012 or the fiscal year ended December 30, 2012.

        The fair value of certain of the Company's financial instruments, including cash and cash equivalents, accounts receivable, prepaid expenses, accounts payable and other current liabilities approximate their recorded carrying amounts because of their short-term nature.