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Balance Sheet Information

9 Months Ended

Sep. 30, 2011

Note 5—Balance Sheet Information

Short-term Investments

Available-for-sale securities consist of the following (in thousands):

	September 30, 2011
	Amortized Cost		Gains in Accumulated Other Comprehensive Income		Losses in Accumulated Other Comprehensive Income		Estimated Fair Value
Commercial paper	$	24,284	$	6	$	—	$	24,290

FDIC insured corporate bonds	137,138		153		—		137,291

Treasury bills	51,116		30		—		51,146
Total available-for-sale securities	$	212,538	$	189	$	—	$	212,727

	December 31, 2010
	Amortized Cost		Gains in Accumulated Other Comprehensive Income		Losses in Accumulated Other Comprehensive Income		Estimated Fair Value
Commercial paper	$	128,527	$	61	$	—	$	128,588

FDIC insured corporate bonds	129,353		24		—		129,377

Treasury bills	136,203		12		—		136,215
Total available-for-sale securities	$	394,083	$	97	$	—	$	394,180

During the three and nine months ended September 30, 2011, available-for-sale securities were sold for total proceeds of $292.9 million and $667.2 million, respectively. The gross realized gains on these sales were $0.2 million and $0.4 million for the three and nine months ended September 30, 2011, respectively. For purpose of determining gross realized gains, the cost of securities sold is based on specific identification. Net unrealized holding (losses) gains on available-for-sale securities amounting to $(0.1) million and $0.1 million for the three and nine months ended September 30, 2011, respectively, have been included in accumulated other comprehensive income. During the three and nine months ended September 30, 2010, available-for-sale securities were sold for total proceeds of $11.0 million. The gross realized gains on these sales were minimal for the three and nine months ended September 30, 2010. Net unrealized holding gains on available-for-sale securities amounting to $0.2 million for the three and nine months ended September 30, 2010 have been included in accumulated other comprehensive income.

Contractual maturities of available-for-sale debt securities at September 30, 2011, are as follows (in thousands):

	Estimated Fair Value
Due in one year or less	$	31,503

Due in 1–2 years	181,224
Total investments in debt securities	$	212,727

Actual maturities may differ from contractual maturities because some borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

Restricted Cash

As of September 30, 2011, we had $22.9 million of restricted cash relating to the proceeds received from the sale of our Metrology segment. This cash is held in escrow and is restricted from use for one year from the closing date of the transaction to secure potential losses, if any, arising out of breaches of representations, warranties and covenants we made in the stock purchase agreement and related documents. The restriction relating to the escrowed proceeds totaling $22.9 million from the sale of our Metrology segment was released on October 6, 2011.

Accounts Receivable, net

Accounts receivable are shown net of the allowance for doubtful accounts of $0.5 million as of September 30, 2011 and December 31, 2010.

Inventories

Inventories are stated at the lower of cost (principally first-in, first-out) or market. Inventories consist of (in thousands):

	September 30,		December 31,
	2011		2010
Raw materials	$	62,678	$	49,953
Work in process	28,026		33,181
Finished goods	36,814		25,353
	$	127,518	$	108,487

Goodwill

Changes in our goodwill are as follows (in thousands):

	Nine months ended
	September 30,
	2011
Beginning Balance	$	52,003
Write-off (see Note 3)	(10,836		)
Acquisition (see Note 2)	15,104
Ending Balance	$	56,271

Accrued Warranty

We estimate the costs that may be incurred under the warranty we provide and record a liability in the amount of such costs at the time the related revenue is recognized. Factors that affect our warranty liability include product failure rates, material usage and labor costs incurred in correcting product failures during the warranty period. We periodically assess the adequacy of our recognized warranty liability and adjust the amount as necessary. Changes in our warranty liability during the period are as follows (in thousands):

	Nine months ended
	September 30,
	2011			2010
Balance as of the beginning of period	$	9,238		$	6,675
Warranties issued during the period	7,935			7,242
Settlements made during the period	(6,870		)	(4,906		)
Balance as of the end of period	$	10,303		$	9,011