INGRAM MICRO INC | 2013 | FY | 3


Fair Value Measurements
Our assets and liabilities carried at fair value are classified and disclosed in one of the following three categories: Level 1 — quoted market prices in active markets for identical assets and liabilities; Level 2 — observable market-based inputs or unobservable inputs that are corroborated by market data; and Level 3 — unobservable inputs that are not corroborated by market data.
As of December 28, 2013, our assets and liabilities measured at fair value on a recurring basis are categorized in the table below:
 
December 28, 2013
 
Total
 
Level 1
 
Level 2
 
Level 3
Assets:
 
 
 
 
 
 
 
Cash equivalents, consisting primarily of money market accounts and short-term certificates of deposit
$
50,735

 
$
50,735

 
$

 
$

Marketable trading securities (a)
53,856

 
53,856

 

 

Derivative assets
2,942

 

 
2,942

 

Total assets at fair value
$
107,533

 
$
104,591

 
$
2,942

 
$

 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
Derivative liabilities
$
8,887

 
$

 
$
8,887

 
$

Contingent consideration
3,650






3,650

Total liabilities at fair value
$
12,537

 
$

 
$
8,887

 
$
3,650

(a) Included in other current assets in our consolidated balance sheet.

As of December 29, 2012, our assets and liabilities measured at fair value on a recurring basis are categorized in the table below:

December 29, 2012
 
Total

Level 1

Level 2

Level 3
Assets:







Cash equivalents, consisting primarily of money market accounts and short-term certificates of deposit
$
189,381

 
$
189,381

 
$

 
$

Marketable trading securities (a)
46,938

 
46,938

 

 

Derivative assets
2,897

 

 
2,897

 

Total assets at fair value
$
239,216

 
$
236,319

 
$
2,897

 
$


 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
Derivative liabilities
$
3,776

 
$

 
$
3,776

 
$

Total liabilities at fair value
$
3,776

 
$

 
$
3,776

 
$

(a) Included in other current assets in our consolidated balance sheet.
The fair value of the cash equivalents approximated cost and the gain or loss on the marketable trading securities was recognized in the consolidated statement of income to reflect these investments at fair value.
Our senior unsecured notes due in 2022 and 2017 are stated at amortized cost, and their respective fair values were determined based on Level 2 criteria. The fair values and carrying values of these notes are shown in the table below:
 
December 28, 2013
 

 
Fair Value
 
Carrying Value
 
Total
 
Level 1
 
Level 2
 
Level 3
Liabilities:
 
 
 
 
 
 
 
 
 
Senior unsecured notes, 5.25% due 2017
$
300,000

 
$
318,000

 
$

 
$
318,000

 
$

Senior unsecured notes, 5.00% due 2022
298,454

 
301,200

 

 
301,200

 

 
$
598,454

 
$
619,200

 
$

 
$
619,200

 
$

 
December 29, 2012

 
 
Fair Value
 
Carrying Value
 
Total
 
Level 1
 
Level 2
 
Level 3
Liabilities:
 
 
 
 
 
 
 
 
 
Senior unsecured notes, 5.25% due 2017
$
300,000

 
$
326,000

 
$

 
$
326,000

 
$

Senior unsecured notes, 5.00% due 2022
298,275

 
307,000

 

 
307,000

 

 
$
598,275

 
$
633,000

 
$

 
$
633,000

 
$


The carrying amounts of our trade accounts receivable, accounts payable and other accrued expenses approximate fair value because of the short maturity of these items. Our North American, European and Asia-Pacific revolving trade accounts receivable-backed financing programs bear interest at variable rates based on designated commercial paper rates and local reference rates, respectively, plus a predetermined fixed margin. The interest rates of our revolving unsecured credit facilities and other debt are dependent upon the local short-term bank indicator rate for a particular currency, which also resets regularly. The carrying amounts of all these facilities approximate their fair value because of the revolving nature of the borrowings and because the all-in rate (consisting of variable rates and fixed margin) adjusts regularly to reflect current market rates with appropriate consideration for our credit profile.

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