Investments and Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2012

Schedule of Available-for-sale Securities

Cash and Cash Equivalents and Marketable Securities

The Company’s total cash, cash equivalents and marketable securities were as follows (in thousands):

	September 30, 2012		January 1, 2012
Cash and cash equivalents	$	1,110,485	$	1,167,496
Short-term marketable securities	1,485,584		1,681,492
Long-term marketable securities	2,818,969		2,766,263
Total cash, cash equivalents and marketable securities	$	5,415,038	$	5,615,251

Financial assets and liabilities measured at fair value on a recurring basis

Financial assets and liabilities measured and recorded at fair value on a recurring basis consisted of the following types of instruments (in thousands):

	September 30, 2012								January 1, 2012
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Money market funds	$	606,845	$	—	$	—	$	606,845	$	901,500	$	—	$	—	$	901,500
Fixed income securities	22,988		4,451,060		—		4,474,048		214,431		4,312,929		—		4,527,360
Derivative assets	—		6,938		—		6,938		—		21,093		—		21,093
Other	—		—		—		—		—		4,501		—		4,501
Total financial assets	$	629,833	$	4,457,998	$	—	$	5,087,831	$	1,115,931	$	4,338,523	$	—	$	5,454,454
Derivative liabilities	$	—	$	6,759	$	—	$	6,759	$	—	$	45,835	$	—	$	45,835
Total financial liabilities	$	—	$	6,759	$	—	$	6,759	$	—	$	45,835	$	—	$	45,835

Financial assets and liabilities measured at fair value on a recurring basis

Financial assets and liabilities measured and recorded at fair value on a recurring basis were presented on the Company’s Condensed Consolidated Balance Sheets as follows (in thousands):

	September 30, 2012								January 1, 2012
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Cash equivalents(1)	$	608,845	$	167,495	$	—	$	776,340	$	926,994	$	54,111	$	—	$	981,105
Short-term marketable securities	15,826		1,469,758		—		1,485,584		155,538		1,525,954		—		1,681,492
Long-term marketable securities	5,162		2,813,807		—		2,818,969		33,399		2,732,864		—		2,766,263
Other current assets and other non-current assets	—		6,938		—		6,938		—		25,594		—		25,594
Total financial assets	$	629,833	$	4,457,998	$	—	$	5,087,831	$	1,115,931	$	4,338,523	$	—	$	5,454,454
Other current accrued liabilities	$	—	$	4,272	$	—	$	4,272	$	—	$	40,045	$	—	$	40,045
Non-current liabilities	—		2,487		—		2,487		—		5,790		—		5,790
Total financial liabilities	$	—	$	6,759	$	—	$	6,759	$	—	$	45,835	$	—	$	45,835

————

⁽¹⁾  Cash equivalents exclude cash of $334.1 million and $186.4 million included in Cash and cash equivalents on the Condensed Consolidated Balance Sheets as of September 30, 2012 and January 1, 2012, respectively.

Available for Sale Investments

Available-for-sale investments were as follows (in thousands):

	September 30, 2012									January 1, 2012
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Fair Value		Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Fair Value
Fixed income securities:
U.S. Treasury and government agency securities	$	29,414	$	16	$	(1	)	$	29,429	$	219,366	$	69	$	(4	)	$	219,431
U.S. government-sponsored agency securities	87,948		56		—			88,004		97,087		10		(26		)	97,071
Corporate notes and bonds	808,426		4,524		(36		)	812,914		780,650		1,707		(3,889		)	778,468
Asset-backed securities	198,315		532		(5		)	198,842		180,828		61		(149		)	180,740
Mortgage-backed securities	3,764		25		(14		)	3,775		1,137		5		—			1,142
Municipal notes and bonds	3,313,224		28,018		(158		)	3,341,084		3,231,240		20,470		(1,202		)	3,250,508
Total available-for-sale investments	$	4,441,091	$	33,171	$	(214	)	$	4,474,048	$	4,510,308	$	22,322	$	(5,270	)	$	4,527,360

Available-for-sale securities that were in an unrealized gain position

The fair value and gross unrealized losses on the available-for-sale securities that have been in an unrealized loss position, aggregated by type of investment instrument, and the length of time that individual securities have been in a continuous unrealized loss position as of September 30, 2012, are summarized in the following table (in thousands). Available-for-sale securities that were in an unrealized gain position have been excluded from the table.

	Less than 12 months					Greater than 12 months
	Fair Value		Gross Unrealized Loss			Fair Value		Gross Unrealized Loss
U.S. Treasury and government agency securities	$	3,420	$	(1	)	$	—	$	—
U.S. government-sponsored agency securities	28,995		—			—		—
Corporate notes and bonds	66,262		(16		)	7,727		(20		)
Asset-backed securities	6,804		(5		)	—		—
Mortgage-backed securities	1,863		(14		)	—		—
Municipal notes and bonds	101,058		(73		)	17,131		(85		)
Total	$	208,402	$	(109	)	$	24,858	$	(105	)

Gross realized gains and (losses) on sales of available-for-sale securities

The following table shows the gross realized gains and losses on sales of available-for-sale securities (in thousands).

	Three months ended						Nine months ended
	September 30, 2012			October 2, 2011			September 30, 2012			October 2, 2011
Gross realized gains	$	940		$	1,276		$	2,964		$	6,890
Gross realized losses	(52		)	(672		)	(874		)	(882		)

Fixed income securities by contractual maturity

Fixed income securities by contractual maturity as of September 30, 2012 are shown below (in thousands). Actual maturities may differ from contractual maturities because issuers of the securities may have the right to prepay obligations.

	Amortized Cost		Fair Value
Due in one year or less	$	1,651,569	$	1,655,079
Due after one year through five years	2,789,522		2,818,969
Total	$	4,441,091	$	4,474,048

Related costs and the fair values based on quoted market prices

For those financial instruments where the carrying amounts differ from fair value, the following table represents the related carrying values and the fair values, which are based on quoted market prices (in thousands). These financial instruments were categorized as Level 1 as of September 30, 2012 and January 1, 2012.

	September 30, 2012				January 1, 2012
	Carrying Value		Fair Value		Carrying Value		Fair Value
1% Convertible Sr. Notes due 2013	$	892,684	$	919,987	$	852,146	$	914,140
1.5% Convertible Sr. Notes due 2017	780,464		1,135,140		752,765		1,177,500
Total	$	1,673,148	$	2,055,127	$	1,604,911	$	2,091,640