3. Cash, Cash Equivalents and Investments

The Company’s cash equivalents and short-term investments as of October 3, 2015 consisted of municipal bonds, money market funds, variable-rate demand notes, certificates of deposit, international government bonds and corporate bonds. 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 October 3, 2015, the Company held $8.0 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 $6.0 million were guaranteed by the U.S. government and the remaining $2.0 million were privately insured. As of October 3, 2015, $6.0 million of the auction-rate securities had credit ratings of AA and $2.0 million had a credit rating of A. These securities have contractual maturity dates ranging from 2033 to 2046 at October 3, 2015. 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 October 3, 2015.

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

	October 3, 2015
	Cost		Gross Unrealized Losses			Gross Unrealized Gains		Fair Value
Cash and Cash Equivalents:
Cash on hand	$	68,421	$	—		$	—	$	68,421
Available-for-sale securities:
Money market funds	63,316		—			—		63,316
Certificates of deposit	3,903		—			—		3,903
Total available-for-sale securities	67,219		—			—		67,219

Total cash and cash equivalents	$	135,640	$	—		$	—	$	135,640

Short-term Investments:
Available-for-sale securities:
Municipal bonds	$	98,605	$	(10	)	$	146	$	98,741
Variable-rate demand notes	9,495		—			—		9,495
International government bonds	2,234		—			1		2,235
Corporate bonds	2,202		(3		)	—		2,199
Total short-term investments	$	112,536	$	(13	)	$	147	$	112,670

Long-term Investments:
Available-for-sale securities:
Auction rate securities	$	8,000	$	(760	)	$	—	$	7,240
Total long-term investments	$	8,000	$	(760	)	$	—	$	7,240

	January 3, 2015
	Cost		Gross Unrealized Losses			Gross Unrealized Gains		Fair Value
Cash and Cash Equivalents:
Cash on hand	$	52,144	$	—		$	—	$	52,144
Available-for-sale securities:
Money market funds	71,415		—			—		71,415
Certificates of deposit	7,739		—			—		7,739
Commercial paper	5,348		—			—		5,348
Municipal bonds	1,756		—			1		1,757
U.S. government agency	1,202		—			—		1,202
Corporate bonds	1,101		—			—		1,101
U.S. government bonds	1,000		—			—		1,000
Total available-for-sale securities	89,561		—			1		89,562

Total cash and cash equivalents	$	141,705	$	—		$	1	$	141,706

Short-term Investments:
Available-for-sale securities:
Municipal bonds	$	129,005	$	(25	)	$	172	$	129,152
Corporate bonds	33,043		(35		)	25		33,033
Variable-rate demand notes	12,915		—			—		12,915
Commercial paper	8,995		—			—		8,995
Asset-backed securities	5,380		(3		)	—		5,377
International government bonds	2,526		(10		)	—		2,516
U.S. government bonds	650		—			—		650
U.S. government agency	601		—			—		601
Certificates of deposit	250		—			—		250
Total short-term investments	$	193,365	$	(73	)	$	197	$	193,489

Long-term Investments:
Available-for-sale securities:
Auction rate securities	$	8,000	$	(581	)	$	—	$	7,419
Total long-term investments	$	8,000	$	(581	)	$	—	$	7,419

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 October 3, 2015	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Municipal bonds	$	8,274	$	(10	)	$	—	$	—		$	8,274	$	(10	)
Auction rate securities	—		—			7,240		(760		)	7,240		(760		)
International government bonds	2,199		(3		)	—		—			2,199		(3		)
	$	10,473	$	(13	)	$	7,240	$	(760	)	$	17,713	$	(773	)

	Less Than 12 Months					12 Months or Greater					Total
As of January 3, 2015	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Municipal bonds	$	23,735	$	(25	)	$	—	$	—		$	23,735	$	(25	)
Corporate bonds	20,327		(35		)	—		—			20,327		(35		)
Auction rate securities	—		—			7,419		(581		)	7,419		(581		)
Asset-backed securities	5,080		(3		)	—		—			5,080		(3		)
International government bond	2,516		(10		)	—		—			2,516		(10		)
	$	51,658	$	(73	)	$	7,419	$	(581	)	$	59,077	$	(654	)

The gross unrealized losses as of October 3, 2015 and January 3, 2015 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 October 3, 2015 (in thousands):

	Cost		Fair Value
Due in one year or less	$	139,704	$	139,779
Due after one year through ten years	33,136		33,195
Due after ten years	14,915		14,155
	$	187,755	$	187,129