v3.24.3
Fair Value Measurements
 9 Months Ended
Sep. 27, 2024
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS
Fair value reflects the amounts that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy has the following three levels:
•Level 1 - quoted prices (unadjusted) in active markets for identical assets and liabilities;
•Level 2 - inputs other than Level 1 that are observable either directly or indirectly, such as quoted prices in active markets for similar instruments or on industry models using data inputs, such as interest rates and prices that can be directly observed or corroborated in active markets; and
•Level 3 - unobservable inputs that are supported by little or no market activity that are significant to the fair value measurement.
The classifications within the fair value hierarchy of our financial assets that were measured and recorded at fair value on a recurring basis were as follows (in thousands):
September 30, 2024
Level 1Level 2Total
Commercial paper$— $201,847 $201,847 
Corporate bonds— 980,068 980,068 
U.S. Treasury and government-sponsored enterprises— 304,625 304,625 
Municipal bonds— 3,038 3,038 
Total debt securities available-for-sale— 1,489,578 1,489,578 
Money market funds179,467 — 179,467 
Certificates of deposit— 43,537 43,537 
Total financial assets carried at fair value$179,467 $1,533,115 $1,712,582 
December 31, 2023
Level 1Level 2Total
Commercial paper$— $214,016 $214,016 
Corporate bonds— 868,245 868,245 
U.S. Treasury and government-sponsored enterprises— 407,321 407,321 
Municipal bonds— 7,841 7,841 
Total debt securities available-for-sale— 1,497,423 1,497,423 
Money market funds154,287 — 154,287 
Certificates of deposit— 72,309 72,309 
Total financial assets carried at fair value$154,287 $1,569,732 $1,724,019 
When available, we value marketable securities based on quoted prices for those financial instruments, which is a Level 1 input. Our remaining marketable securities are valued using third-party pricing sources, which use observable market prices, interest rates and yield curves observable at commonly quoted intervals for similar assets as observable inputs for pricing, which is a Level 2 input.
Impairment of Long-Lived Assets
When necessary, we record impairments of long-lived assets for the amount by which the fair value is less than the carrying value of these assets. When an impairment indicator exists, we calculate the undiscounted value of the projected cash flows for the asset, or asset group, and compare this estimated amount to the carrying amount. If the carrying amount is greater, we record an impairment loss for the excess of carrying value over fair value. In addition, in all cases of an impairment review, we reevaluate the remaining useful lives of the assets and modify them, as appropriate. In connection with the 2024 Restructuring Plan, we determined certain long-lived assets were impaired. The fair value was determined using an income approach where certain Level 3 inputs were used, including estimates and assumptions on the timing and amount of discounted cash flows. See “Note 11. Restructuring” for additional information.
During the third quarter of fiscal 2024, we evaluated our plans for the Alameda leased facilities and listed certain buildings for sublease. As a result, we determined the related right-of-use assets and leasehold improvements should be evaluated for impairment as separate asset groups. We concluded that the asset groups were not recoverable as of September 30, 2024 and recognized a $51.7 million non-cash impairment charge. The estimated fair value was determined using an income approach comprised of projected discounted cash flows that included certain Level 3 inputs, such as sublease income and discount rates. The assumptions associated with sublease income and discount rates are subject to risks and uncertainties and could materially differ from our estimates. The impairment charge is presented in impairment of long-lived assets in the accompanying Condensed Consolidated Statements of Income.
The carrying amount of our remaining financial assets and liabilities, which include receivables and payables, approximate their fair values due to their short-term nature.
Forward Foreign Currency Contracts
We have entered into forward foreign currency exchange contracts that are not designated as hedges for accounting purposes to hedge certain operational exposures for the changes in foreign currency exchange rates associated with assets or liabilities denominated in foreign currencies, primarily the Euro.
As of September 30, 2024, we had one forward contract outstanding to sell €3.5 million. The forward contract with a maturity of three months is recorded at fair value and is included in other current liabilities in the accompanying Condensed Consolidated Balance Sheets. The unrealized loss on the forward contract is immaterial as of September 30, 2024. The forward contract is considered a Level 2 in the fair value hierarchy of our fair value measurements. The net realized and unrealized gains (losses) we recognized on the maturity of forward contracts were immaterial for each of the three and nine months ended September 30, 2024 and 2023 and are included in other income (expense), net in the accompanying Condensed Consolidated Statements of Income.