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Investments & Fair Value Measurements | 6 Months Ended
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Apr. 01, 2016
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract] |
Investments & Fair Value Measurements | Investments & Fair Value Measurements Investment Strategy. Under our investment management strategy, we use cash holdings to purchase investment grade securities that are diversified among security types, industries and issuers. Each of the investments within our investment portfolio is measured at fair value, and is recorded within cash equivalents, short-term investments, and long-term investments in our consolidated balance sheets. With the exception of our mutual fund investments held in our supplemental retirement plan, all of our investments are classified as available-for-sale securities. Investments held in our supplemental retirement plan are classified as trading securities. Our investments primarily consist of municipal debt securities, corporate bonds, United States agency securities and commercial paper. In addition to the security types noted above, our cash and cash equivalents also consist of highly-liquid money market funds. Consistent with our investment policy, none of the municipal debt investments that we hold are supported by letters of credit or standby purchase agreements. Our cash and investment portfolio, which is recorded as cash equivalents and both short and long-term investments, consists of the following (in thousands):
| April 1, 2016
| Cost | Unrealized |  |  | Estimated Fair Value
| Gains | Losses | Total |  | Level 1 | Level 2 | Level 3
Cash and cash equivalents: |  |  |  |  |  |  |  |
Cash | $ | 494,964 |  |  |  | $ | 494,964 |  |  |  |  |
Cash equivalents: |  |  |  |  |  |  |  |
Money market funds | 26,238 |  | — |  | — |  | 26,238 |  |  | 26,238 |  |  |
Cash and cash equivalents | 521,202 |  | — |  | — |  | 521,202 |  |  | 26,238 |  | — |  | — |
Short-term investments: |  |  |  |  |  |  |  |
Commercial paper | 13,867 |  | 22 |  | (7 | ) | 13,882 |  |  |  | 13,882 |  |
Corporate bonds | 71,851 |  | — |  | (51 | ) | 71,800 |  |  |  | 71,800 |  |
Municipal debt securities | 18,591 |  | 8 |  | (14 | ) | 18,585 |  |  |  | 18,585 |  |
Short-term investments | 104,309 |  | 30 |  | (72 | ) | 104,267 |  |  | — |  | 104,267 |  | — |
Long-term investments: |  |  |  |  |  |  |  |
Certificate of deposit (1) | 13,000 |  | — |  | (15 | ) | 12,985 |  |  |  | 12,985 |  |
U.S. agency securities | 11,631 |  | 39 |  | (1 | ) | 11,669 |  |  | 11,669 |  |  |
Government bonds | 14,483 |  | 70 |  | (1 | ) | 14,552 |  |  | 14,552 |  |  |
Corporate bonds | 189,585 |  | 810 |  | (197 | ) | 190,198 |  |  |  | 190,198 |  |
Municipal debt securities | 35,033 |  | 121 |  | (22 | ) | 35,132 |  |  |  | 35,132 |  |
Other long-term investments (2) | 3,046 |  | 509 |  | — |  | 3,555 |  |  | 509 |  |  |  |
Long-term investments | 266,778 |  | 1,549 |  | (236 | ) | 268,091 |  |  | 26,730 |  | 238,315 |  | — |
Total cash, cash equivalents, and investments | $ | 892,289 |  | $ | 1,579 |  | $ | (308 | ) | $ | 893,560 |  |  | $ | 52,968 |  | $ | 342,582 |  | $ | — |
Investments held in supplemental retirement plan: |  |  |  |  |  |  |  |
Assets | 2,404 |  |  |  | 2,404 |  |  | 2,404 |  |  |
Included in prepaid expenses and other current assets & other non-current assets |  |  |  |  |
Liabilities | 2,404 |  |  |  | 2,404 |  |  | 2,404 |  |  |
Included in accrued liabilities & other non-current liabilities |  |  |  |  |
Contingent consideration related to acquisition: |  |  |  |  |  |  |  |
Liabilities | 95 |  |  |  | 95 |  |  |  |  |  | 95 |
Included in accrued liabilities |  |  |  |  |
(1) | The certificate of deposit includes marketable securities, and has a maturity in excess of one year as of April 1, 2016.
(2) | Other long-term investments as of April 1, 2016 include a marketable equity security of $0.5 million, and other investments that are not carried at fair value including an equity method investment of $0.6 million and two cost method investments of $2.0 million and $0.5 million.
| September 25, 2015
| Cost | Unrealized |  |  | Estimated Fair Value
| Gains | Losses | Total |  | Level 1 | Level 2 | Level 3
Cash and cash equivalents: |  |  |  |  |  |  |  |
Cash | $ | 511,736 |  |  |  | $ | 511,736 |  |  |  |  |
Cash equivalents: |  |  |  |  |  |  |  |
Money market funds | 19,014 |  | — |  | — |  | 19,014 |  |  | 19,014 |  |  |
Corporate bonds | 1,176 |  | — |  | — |  | 1,176 |  |  |  | 1,176 |  |
Cash and cash equivalents | 531,926 |  | — |  | — |  | 531,926 |  |  | 19,014 |  | 1,176 |  | — |
Short-term investments: |  |  |  |  |  |  |  |
Government bonds | 2,000 |  | 1 |  | — |  | 2,001 |  |  | 2,001 |  |  |
Commercial paper | 6,478 |  | — |  | — |  | 6,478 |  |  |  | 6,478 |  |
Corporate bonds | 86,543 |  | 46 |  | (11 | ) | 86,578 |  |  |  | 86,578 |  |
Municipal debt securities | 43,746 |  | 98 |  | — |  | 43,844 |  |  |  | 43,844 |  |
Short-term investments | 138,767 |  | 145 |  | (11 | ) | 138,901 |  |  | 2,001 |  | 136,900 |  | — |
Long-term investments: |  |  |  |  |  |  |  |
U.S. agency securities | 1,999 |  | 1 |  | — |  | 2,000 |  |  | 2,000 |  |  |
Government bonds | 30,505 |  | 19 |  | (17 | ) | 30,507 |  |  | 30,507 |  |  |
Corporate bonds | 167,394 |  | 138 |  | (392 | ) | 167,140 |  |  |  | 167,140 |  |
Municipal debt securities | 117,552 |  | 189 |  | (60 | ) | 117,681 |  |  |  | 117,681 |  |
Other long-term investments (1) | 2,961 |  | 726 |  | — |  | 3,687 |  |  | 726 |  |  |
Long-term investments | 320,411 |  | 1,073 |  | (469 | ) | 321,015 |  |  | 33,233 |  | 284,821 |  | — |
Total cash, cash equivalents, and investments | $ | 991,104 |  | $ | 1,218 |  | $ | (480 | ) | $ | 991,842 |  |  | $ | 54,248 |  | $ | 422,897 |  | $ | — |
Investments held in supplemental retirement plan: |  |  |  |  |  |  |
Assets | 2,498 |  |  |  | 2,498 |  |  | 2,498 |  |  |
Included in prepaid expenses and other current assets & other non-current assets |  |  |  |  |
Liabilities | 2,498 |  |  |  | 2,498 |  |  | 2,498 |  |  |
Included in accrued liabilities & other non-current liabilities |  |  |  |  |
Contingent consideration related to acquisition: |  |  |  |  |  |  |  |
Liabilities | 95 |  |  |  | 95 |  |  |  |  | 95 |
Included in accrued liabilities |  |  |  |  |
(1) | Other long-term investments as of September 25, 2015 include a marketable equity security of $0.7 million, and other investments that are not carried at fair value including an equity method investment of $0.5 million and two cost method investments of $2.0 million and $0.5 million.
Fair Value Hierarchy. Fair value is the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants at the measurement date. We minimize the use of unobservable inputs and use observable market data, if available, when determining fair value. We classify our inputs to measure fair value using the following three-level hierarchy: Level 1: Quoted prices in active markets at the measurement date for identical assets and liabilities. We base the fair value of our Level 1 financial instruments, which are traded in active markets, using quoted market prices for identical instruments. Level 2: Prices may be based upon quoted prices in active markets or inputs not quoted on active markets but are corroborated by market data. We obtain the fair value of our Level 2 financial instruments from a professional pricing service, which may use quoted market prices for identical or comparable instruments, or model driven valuations using observable market data or inputs corroborated by observable market data. To validate the fair value determination provided by our primary pricing service, we perform quality controls over values received which include comparing our pricing service provider’s assessment of the fair values of our investment securities against the fair values of our investment securities obtained from another independent source, reviewing the pricing movement in the context of overall market trends, and reviewing trading information from our investment managers. In addition, we assess the inputs and methods used in determining the fair value in order to determine the classification of securities in the fair value hierarchy. Level 3: Unobservable inputs are used when little or no market data is available and reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. Securities In Gross Unrealized Loss Position. We periodically evaluate our investments for other-than- temporary declines in fair value. The unrealized losses on our available-for-sale securities were primarily the result of unfavorable changes in interest rates subsequent to the initial purchase of these securities. The following table presents the gross unrealized losses and fair value for those available-for-sale securities that were in an unrealized loss position as of April 1, 2016 and September 25, 2015 (in thousands):
| April 1, 2016 |  | September 25, 2015
Investment Type | Fair Value | Gross Unrealized Losses (1) |  | Fair Value | Gross Unrealized Losses (1)
Certificate of deposit | $ | 12,986 |  | $ | (15 | ) |  | $ | — |  | $ | — |
U.S. agency securities | 2,996 |  | (2 | ) |  | 19,005 |  | (17 | )
Commercial paper | 13,860 |  | (7 | ) |  | — |  | — |
Corporate bonds | 71,460 |  | (248 | ) |  | 148,034 |  | (403 | )
Municipal debt securities | 18,338 |  | (36 | ) |  | 35,476 |  | (60 | )
Total | $ | 119,640 |  | $ | (308 | ) |  | $ | 202,515 |  | $ | (480 | )
(1) | Our available-for-sale securities in an unrealized loss position were in such position for less than twelve months as of both April 1, 2016 and September 25, 2015.
Although we had certain securities that were in an unrealized loss position as of April 1, 2016, we expect to recover the full carrying value of these securities as we do not intend to, nor do we currently anticipate a need to sell these securities prior to recovering the associated unrealized losses. As a result, we do not consider any portion of the unrealized losses at either April 1, 2016 or September 25, 2015 to represent an other-than-temporary impairment, nor do we consider any of the unrealized losses to be credit losses. Investment Maturities. The following table summarizes the amortized cost and estimated fair value of the available-for-sale securities within our investment portfolio based on stated maturities as of April 1, 2016 and September 25, 2015, which are recorded within cash equivalents and both short and long-term investments in our consolidated balance sheets (in thousands):
| April 1, 2016 |  | September 25, 2015
Range of maturity | Amortized Cost | Fair Value |  | Amortized Cost | Fair Value
Due within 1 year | $ | 130,547 |  | $ | 130,505 |  |  | $ | 158,957 |  | $ | 159,090 |
Due in 1 to 2 years | 125,706 |  | 125,932 |  |  | 173,571 |  | 173,577 |
Due in 2 to 3 years | 138,027 |  | 138,604 |  |  | 143,879 |  | 143,752 |
Total | $ | 394,280 |  | $ | 395,041 |  |  | $ | 476,407 |  | $ | 476,419 |

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- Definition The entire disclosure of the fair value measurement of assets and liabilities, which includes financial instruments measured at fair value that are classified in shareholders' equity, which may be measured on a recurring or nonrecurring basis. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=36462937&loc=d3e19279-110258 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=36462937&loc=d3e19207-110258 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=36462937&loc=d3e19190-110258 + Details
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