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NOTE 6—FAIR VALUE MEASUREMENTS
Fair value refers to the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the entity transacts. The inputs used to develop these fair value measurements are established in a hierarchy, which ranks the quality and reliability of the information used to determine the fair values. The fair value classification is based on levels of inputs. Assets and liabilities that are carried at fair value are classified and disclosed in one of the following categories:
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| Level 1: |
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Quoted market prices in active markets for identical assets or liabilities. |
| Level 2: |
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Observable market based inputs or unobservable inputs that are corroborated by market data. |
| Level 3: |
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Unobservable inputs that are not corroborated by market data. |
The following table summarizes the fair value hierarchy of the Company's financial assets and liabilities carried at fair value on a recurring basis as of September 29, 2011:
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Fair Value Measurements at
September 29, 2011 Using |
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(In thousands) |
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Total Carrying Value at
September 29,
2011 |
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Quoted prices in active market
(Level 1) |
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Significant other observable inputs
(Level 2) |
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Significant unobservable inputs
(Level 3) |
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Cash and Equivalents: |
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Cash |
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$ |
13 |
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$ |
13 |
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$ |
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$ |
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Money Market Mutual Funds |
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68 |
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68 |
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— |
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— |
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Other long-term assets: |
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Equity securities, available-for-sale: |
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RealD Inc. Common Stock |
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12,156 |
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12,156 |
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— |
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— |
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Mutual Fund Large U.S. Equity |
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1,957 |
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1,957 |
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— |
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— |
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Mutual Fund Small/Mid U.S. Equity |
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270 |
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270 |
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— |
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— |
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Mutual Fund International |
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123 |
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123 |
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— |
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— |
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Mutual Fund Broad U.S. Equity |
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25 |
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25 |
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— |
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— |
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Mutual Fund Balance |
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61 |
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61 |
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— |
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— |
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Mutual Fund Fixed Income |
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292 |
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292 |
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— |
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— |
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Total assets at fair value |
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$ |
14,965 |
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$ |
14,965 |
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$ |
— |
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$ |
— |
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Valuation Techniques. The Company's money market mutual funds are invested in funds that seek to preserve principal, are highly liquid, and therefore are recorded on the balance sheet at the principal amounts deposited, which equals fair value. The equity securities, available-for-sale, primarily consist of common stock and mutual funds invested in equity, fixed income, and international funds and are measured at fair value using quoted market prices. The unrealized gain on the mutual funds recorded in accumulated other comprehensive loss as of September 29, 2011 was approximately $221,000. The unrealized loss on the RealD Inc. common stock recorded in accumulated other comprehensive loss as of September 29, 2011 was approximately $15,400,000. See Note 5—Investments, for further information regarding RealD Inc. common stock.
Other Fair Value Measurement Disclosures. The Company is required to disclose the fair value of financial instruments that are not recognized in the statement of financial position for which it is practicable to estimate that value. At September 29, 2011, the carrying amount of the Company's liabilities for corporate borrowings was approximately $2,101,547,000 and the fair value was approximately $2,010,273,000. At March 31, 2011, the carrying amount of the corporate borrowings was approximately $2,102,540,000 and the fair value was approximately $2,212,100,000. Quoted market prices were used to value publicly held corporate borrowings. The carrying value of cash and equivalents approximates fair value because of the short duration of those instruments. |