3. Cash, Cash Equivalents and Investments

The Company’s cash equivalents and short-term investments as of September 27, 2014 consisted of municipal bonds, corporate bonds, money market funds, commercial paper, variable-rate demand notes, certificates of deposit, asset-backed securities, international government bonds, U.S. government bonds and U.S. government agency. The Company’s long-term investments consisted of auction-rate securities. In fiscal 2008, auctions for many of the Company’s auction-rate securities failed because sell orders exceeded buy orders. As of September 27, 2014, the Company held $12.4 million par value auction-rate securities, all of which have experienced failed auctions. The underlying assets of the securities consisted of student loans and municipal bonds, of which $10.4 million were guaranteed by the U.S. government and the remaining $2.0 million were privately insured. As of September 27, 2014, $6.0 million had credit ratings of AA, $2.0 million had a credit rating of A and $4.4 million of the auction-rate securities had credit ratings of BBB. These securities have contractual maturity dates ranging from 2033 to 2046 at September 27, 2014. The Company is receiving the underlying cash flows on all of its auction-rate securities. The principal amounts associated with failed auctions are not expected to be accessible until a successful auction occurs, the issuer redeems the securities, a buyer is found outside of the auction process or the underlying securities mature. The Company is unable to predict if these funds will become available before their maturity dates.

The Company does not expect to need access to the capital represented by any of its auction-rate securities prior to their maturities. The Company does not intend to sell, and believes it is not more likely than not that it will be required to sell, its auction-rate securities before their anticipated recovery in market value or final settlement at the underlying par value. The Company believes that the credit ratings and credit support of the security issuers indicate that they have the ability to settle the securities at par value. As such, the Company has determined that no other-than-temporary impairment losses existed as of September 27, 2014.

The Company’s cash, cash equivalents and investments consist of the following (in thousands):

	September 27, 2014
	Cost		Gross Unrealized Losses			Gross Unrealized Gains		Fair Value
Cash and Cash Equivalents:
Cash on hand	$	63,284	$	—		$	—	$	63,284
Available-for-sale securities:
Money market funds	28,036		—			—		28,036
Commercial paper	14,147		—			—		14,147
Certificates of deposit	5,331		—			—		5,331
Municipal bonds	907		—			—		907
Total available-for-sale securities	48,421		—			—		48,421

Total cash and cash equivalents	$	111,705	$	—		$	—	$	111,705

Short-term Investments:
Available-for-sale securities:
Municipal bonds	$	143,212	$	(3	)	$	240	$	143,449
Corporate bonds	36,000		(33		)	47		36,014
Variable-rate demand notes	15,755		—			—		15,755
Commercial paper	11,439		—			—		11,439
Asset-backed securities	5,689		(3		)	1		5,687
International government bonds	2,533		(5		)	—		2,528
Certificates of deposit	850		—			—		850
U.S. government bonds	650		—			—		650
U.S. government agency	601		—			—		601
Total short-term investments	$	216,729	$	(44	)	$	288	$	216,973

Long-term Investments:
Available-for-sale securities:
Auction rate securities	$	12,425	$	(920	)	$	—	$	11,505
Total long-term investments	$	12,425	$	(920	)	$	—	$	11,505

	December 28, 2013
	Cost		Gross Unrealized Losses			Gross Unrealized Gains		Fair Value
Cash and Cash Equivalents:
Cash on hand	$	45,544	$	—		$	—	$	45,544
Available-for-sale securities:
Money market funds	39,538		—			—		39,538
Certificates of deposit	7,768		—			—		7,768
Commercial paper	2,499		—			—		2,499
Municipal bonds	451		—			—		451
Total available-for-sale securities	50,256		—			—		50,256

Total cash and cash equivalents	$	95,800	$	—		$	—	$	95,800

Short-term Investments:
Available-for-sale securities:
Municipal bonds	$	119,289	$	(11	)	$	182	$	119,460
Variable-rate demand notes	38,025		—			—		38,025
Corporate bonds	17,788		(4		)	60		17,844
Commercial paper	3,748		—			—		3,748
Asset-backed securities	515		—			1		516
Total short-term investments	$	179,365	$	(15	)	$	243	$	179,593

Long-term Investments:
Available-for-sale securities:
Auction rate securities	$	12,425	$	(1,793	)	$	—	$	10,632
Total long-term investments	$	12,425	$	(1,793	)	$	—	$	10,632

The available-for-sale investments that were in a continuous unrealized loss position, aggregated by length of time that individual securities have been in a continuous loss position, were as follows (in thousands):

	Less Than 12 Months					12 Months or Greater					Total
As of September 27, 2014	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Corporate bonds	$	16,564	$	(33	)	$	—	$	—		$	16,564	$	(33	)
Auction rate securities	—		—			11,505		(920		)	11,505		(920		)
Municipal bonds	7,893		(3		)	—		—			7,893		(3		)
Asset-backed securities	5,102		(3		)	—		—			5,102		(3		)
International government bond	2,527		(5		)	—		—			2,527		(5		)
	$	32,086	$	(44	)	$	11,505	$	(920	)	$	43,591	$	(964	)

	Less Than 12 Months					12 Months or Greater					Total
As of December 28, 2013	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Municipal bonds	$	11,079	$	(11	)	$	—	$	—		$	11,079	$	(11	)
Auction rate securities	—		—			10,632		(1,793		)	10,632		(1,793		)
Corporate bonds	2,605		(4		)	—		—			2,605		(4		)
	$	13,684	$	(15	)	$	10,632	$	(1,793	)	$	24,316	$	(1,808	)

The gross unrealized losses as of September 27, 2014 and December 28, 2013 were due primarily to the illiquidity of the Company’s auction-rate securities and, to a lesser extent, to changes in market interest rates.

The following summarizes the contractual underlying maturities of the Company’s available-for-sale investments at September 27, 2014 (in thousands):

	Cost		Fair Value
Due in one year or less	$	155,375	$	155,485
Due after one year through ten years	97,195		97,329
Due after ten years	25,005		24,085
	$	277,575	$	276,899