3. Cash, Cash Equivalents and Investments

The Company’s cash equivalents and short-term investments as of April 2, 2016 consisted of municipal bonds, money market funds, variable-rate demand notes, corporate bonds, U.S. government bonds, asset-back securities, commercial paper, certificates of deposit and international government 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 April 2, 2016, 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 April 2, 2016, $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 April 2, 2016. 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 April 2, 2016.

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

	April 2, 2016
	Cost		Gross Unrealized Losses			Gross Unrealized Gains		Fair Value
Cash and cash equivalents:
Cash on hand	$	76,197	$	—		$	—	$	76,197
Available-for-sale securities:
Money market funds	40,720		—			—		40,720
Municipal bonds	5,724		—			—		5,724
Certificates of deposit	2,849		—			—		2,849
Commercial paper	1,200		—			—		1,200
Total available-for-sale securities	50,493		—			—		50,493

Total cash and cash equivalents	$	126,690	$	—		$	—	$	126,690

Short-term investments:
Available-for-sale securities:
Municipal bonds	$	85,668	$	(14	)	$	55	$	85,709
Variable-rate demand notes	18,395		—			—		18,395
Corporate bonds	8,021		(18		)	—		8,003
U.S. government bonds	6,004		—			5		6,009
Asset-backed securities	3,995		—			3		3,998
Commercial paper	2,489		—			—		2,489
International government bonds	2,220		—			1		2,221
Total short-term investments	$	126,792	$	(32	)	$	64	$	126,824

Long-term investments:
Available-for-sale securities:
Auction rate securities	$	8,000	$	(1,155	)	$	—	$	6,845
Total long-term investments	$	8,000	$	(1,155	)	$	—	$	6,845

	January 2, 2016
	Cost		Gross Unrealized Losses			Gross Unrealized Gains		Fair Value
Cash and cash equivalents:
Cash on hand	$	59,071	$	—		$	—	$	59,071
Available-for-sale securities:						—
Money market funds	37,721		—			—		37,721
Commercial paper	11,272		—			—		11,272
Certificates of deposit	2,845		—			—		2,845
U.S. government agency	1,599		—			—		1,599
Municipal bonds	1,576		—			1		1,577
Total available-for-sale securities	55,013		—			1		55,014

Total cash and cash equivalents	$	114,084	$	—		$	1	$	114,085

Short-term investments:
Available-for-sale securities:
Municipal bonds	$	93,506	$	(32	)	$	42	$	93,516
Commercial paper	11,176		—			—		11,176
Variable-rate demand notes	8,995		—			—		8,995
Certificates of deposit	8,000		—			—		8,000
U.S. government agency	3,997		—			1		3,998
International government bonds	2,227		(7		)	—		2,220
Corporate bonds	999		(3		)	—		996
Total short-term investments	$	128,900	$	(42	)	$	43	$	128,901

Long-term investments:
Available-for-sale securities:
Auction rate securities	$	8,000	$	(874	)	$	—	$	7,126
Total long-term investments	$	8,000	$	(874	)	$	—	$	7,126

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 April 2, 2016	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Municipal bonds	$	27,767	$	(11	)	$	2,708	$	(3	)	$	30,475	$	(14	)
Corporate bonds	8,003		(18		)	—		—			8,003		(18		)
Auction rate securities	—		—			6,845		(1,155		)	6,845		(1,155		)
	$	35,770	$	(29	)	$	9,553	$	(1,158	)	$	45,323	$	(1,187	)

	Less Than 12 Months					12 Months or Greater					Total
As of January 2, 2016	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Municipal bonds	$	29,271	$	(30	)	$	1,198	$	(2	)	$	30,469	$	(32	)
Auction rate securities	—		—			7,126		(874		)	7,126		(874		)
International government bonds	2,220		(7		)	—		—			2,220		(7		)
Corporate bonds	996		(3		)	—		—			996		(3		)
	$	32,487	$	(40	)	$	8,324	$	(876	)	$	40,811	$	(916	)

The gross unrealized losses as of April 2, 2016 and January 2, 2016 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 April 2, 2016 (in thousands):

	Cost		Fair Value
Due in one year or less	$	114,458	$	114,470
Due after one year through ten years	41,002		41,022
Due after ten years	29,825		28,670
	$	185,285	$	184,162