Fair Value Measurements

3 Months Ended

Apr. 01, 2012

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The following table presents the Company’s hierarchy for assets and liabilities measured at fair value on a recurring basis as of April 1, 2012 and January 1, 2012 (in thousands):

	April 1, 2012								January 1, 2012
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Money market funds (cash equivalent)	$	173,640	$	—	$	—	$	173,640	$	166,898	$	—	$	—	$	166,898
Debt securities in government sponsored entities	—		402,699		—		402,699		—		394,039		—		394,039
Corporate debt securities	—		505,429		—		505,429		—		433,382		—		433,382
U.S. Treasury securities	98,041		—		—		98,041		59,169		—		—		59,169
Deferred compensation plan assets	—		12,940		—		12,940		—		10,800		—		10,800
Total assets measured at fair value	$	271,681	$	921,068	$	—	$	1,192,749	$	226,067	$	838,221	$	—	$	1,064,288
Liabilities:
Acquisition related contingent consideration liability	$	—	$	—	$	8,375	$	8,375	$	—	$	—	$	6,638	$	6,638
Deferred compensation liability	—		11,368		—		11,368		—		8,970		—		8,970
Total liabilities measured at fair value	$	—	$	11,368	$	8,375	$	19,743	$	—	$	8,970	$	6,638	$	15,608

The Company holds available-for-sale securities that consist of highly liquid, investment grade debt securities. The Company determines the fair value of its debt security holdings based on pricing from a service provider. The service provider values the securities based on "consensus pricing," using market prices from a variety of industry-standard independent data providers. Such market prices may be quoted prices in active markets for identical assets (Level 1 inputs) or pricing determined using inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs), such as yield curve, volatility factors, credit spreads, default rates, loss severity, current market and contractual prices for the underlying instruments or debt, broker and dealer quotes, as well as other relevant economic measures. The Company's deferred compensation plan assets consist primarily of mutual funds. The Company performs certain procedures to corroborate the fair value of its holdings, including comparing prices obtained from service providers to prices obtained from other reliable sources.

The Company reassesses the fair value of contingent consideration to be settled in cash related to acquisitions on a quarterly basis using the income approach. This is a Level 3 measurement. Significant assumptions used in the measurement include probabilities of achieving the remaining milestones and the discount rates, which depend on the milestone risk profiles. Due to changes in the estimated probabilities to achieve the relevant milestones and a shorter discounting period, the fair value of the contingent consideration liabilities changed, resulting in a $1.7 million expense recorded in acquisition related expense in the consolidated statements of income during the three months ended April 1, 2012.

Changes in estimated fair value of contingent consideration liabilities from January 1, 2012 through April 1, 2012 are as follows (in thousands):

	Contingent Consideration Liability (Level 3 Measurement)
Balance as of January 1, 2012	$	6,638
Change in estimated fair value, recorded in acquisition related expense, net	1,737
Balance as of April 1, 2012	$	8,375