Fair Value Measurements (Notes)

6 Months Ended

Jun. 29, 2013

Assets and Liabilities that are Measured at Fair Value on a Recurring Basis

The fair value hierarchy requires the use of observable market data when available. In instances in which the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability. Our financial assets are valued using market prices based on either active markets (Level 1 measurements) or less active markets (Level 2 measurements).

Our Level 1 securities include U.S. Treasury securities as they trade with sufficient frequency and volume to enable us to obtain pricing information on a consistent basis. Our Level 2 securities include U.S. Agency bonds, corporate bonds and municipal bonds whose value is determined by a third-party pricing service using inputs that are observable in the market or can be derived principally from or corroborated by observable market data such as pricing for similar securities, recently executed transactions, cash flow models with yield curves and benchmark securities.

We did not have any transfers between Level 1 and Level 2 fair value measurements during the periods presented.

The following tables set forth by level within the fair value hierarchy, our financial assets that were accounted for at fair value on a recurring basis at June 29, 2013, and December 29, 2012, according to the valuation techniques we used to determine their fair value (in thousands):



	June 29, 2013
	Level 1		Level 2		Level 3		Total
Marketable debt securities – current
U.S. Treasury securities	$	15,015	$	—	$	—	$	15,015
Corporate bonds	—		25,206		—		25,206
U.S. Agency bonds	—		10,014		—		10,014
Municipal bonds	—		3,552		—		3,552
	15,015		38,772		—		53,787
Marketable debt securities – non-current
U.S. Treasury securities	7,503		—		—		7,503
Corporate bonds	—		10,306		—		10,306
U.S. Agency bonds	—		7,531		—		7,531
Municipal bonds	—		3,162		—		3,162
	7,503		20,999		—		28,502
	$	22,518	$	59,771	$	—	$	82,289



	December 29, 2012
	Level 1		Level 2		Level 3		Total
Marketable debt securities – current
U.S. Treasury securities	$	17,538	$	—	$	—	$	17,538
Corporate bonds	—		21,549		—		21,549
U.S. Agency bonds	—		7,586		—		7,586
Municipal bonds	—		4,591		—		4,591
	17,538		33,726		—		51,264
Marketable debt securities – non-current
U.S. Treasury securities	15,004		—		—		15,004
Corporate bonds	—		10,359		—		10,359
U.S. Agency bonds	—		10,056		—		10,056
Municipal bonds	—		3,223		—		3,223
	15,004		23,638		—		38,642
	$	32,542	$	57,364	$	—	$	89,906

At June 29, 2013, and December 29, 2012, we had $0.9 million and $1.6 million, respectively, of debt and equity securities that fund our deferred compensation plan and are classified in other assets. We also had corresponding deferred compensation plan liabilities of $0.9 million and $1.6 million at June 29, 2013, and December 29, 2012, respectively, which are included in other long-term liabilities. The majority of the debt and equity securities are Level 1 as they trade with sufficient frequency and volume to enable us to obtain pricing information on an ongoing basis. Unrealized gains/(losses) on the debt and equity securities offset those associated with the corresponding deferred compensation plan liabilities.

- 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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