Cash Equivalents and Investments

9 Months Ended

Sep. 30, 2012

Cash Equivalents and Investments

Note 7 — Cash Equivalents and Investments

The following tables summarize the Company’s cash equivalents and investments measured at fair value:

	Fair Value Measurements as of September 30, 2012
	Level 1			Level 2			Total
	(In thousands)
Cash equivalents:
Money-market funds	$	338,690	(a)	$	0		$	338,690
U.S. government and agency securities		0			1,000	(b)		1,000
Total cash equivalents	$	338,690		$	1,000		$	339,690
Available-for-sale debt securities:
Asset-backed and mortgage-backed securities:
Agency securities	$	0		$	124,247	(b)	$	124,247
Non-agency securities		0			2,336	(b)		2,336
U.S. government and agency securities		13,276	(a)		45,968	(b)		59,244
Corporate debt securities		0			16,693	(b)		16,693
Total short-term investments	$	13,276		$	189,244		$	202,520
Long-term investments in equity securities:
Marketable available-for-sale equity securities	$	2,209	(c)	$	0		$	2,209

	Fair Value Measurements as of December 31, 2011
	Level 1			Level 2			Total
	(In thousands)
Cash equivalents:
Money-market funds	$	674,219	(a)	$	0		$	674,219
Available-for-sale debt securities:
Asset-backed and mortgage-backed securities:
Agency securities	$	0		$	97,408	(b)	$	97,408
Non-agency securities		0			9,989	(b)		9,989
U.S. government and agency securities		5,403	(a)		30,572	(b)		35,975
Corporate debt securities		0			12,272	(b)		12,272
Total short-term investments	$	5,403		$	150,241		$	155,644
Long-term investments in equity securities:
Marketable available-for-sale equity securities	$	1,514	(c)	$	0		$	1,514

(a) The fair value of money-market funds is determined using unadjusted prices in active markets. The fair value of Level 1 U.S. government and agency securities is determined using quoted prices in active markets.

(b) These investments are traded less frequently than Level 1 securities and are valued using inputs that include quoted prices for similar assets in active markets and inputs other than quoted prices that are observable for the asset, such as interest rates, yield curves, prepayment speeds, collateral performance, broker/dealer quotes and indices that are observable at commonly quoted intervals.

(c) The fair value of marketable equity securities is determined using quoted market prices in active markets. These amounts are included within other assets in the condensed consolidated balance sheets.

As of September 30, 2012 and December 31, 2011, the aggregate carrying value of the Company’s non-marketable securities was $41.6 million and $43.9 million, respectively.

Upon the acquisition of SandForce in January 2012, the Company recognized a gain of $5.8 million as a result of re-measuring its pre-acquisition equity interest in SandForce to estimated fair value. There were no other non-marketable securities fair-valued during the three and nine months ended September 30, 2012 or October 2, 2011.

The following tables summarize the Company’s available-for-sale securities:

	September 30, 2012
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Fair Value
	(In thousands)
Short-term debt securities:
Asset-backed and mortgage-backed securities	$	120,326	$	6,730	$	(473	)	$	126,583
U.S. government and agency securities		58,350		895		(1	)		59,244
Corporate debt securities		16,523		170		0			16,693
Total short-term debt securities	$	195,199	$	7,795	$	(474	)	$	202,520
Long-term marketable equity securities	$	669	$	1,541	$	(1	)	$	2,209

	December 31, 2011
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Fair Value
	(In thousands)
Short-term debt securities:
Asset-backed and mortgage-backed securities	$	99,884	$	7,891	$	(378	)	$	107,397
U.S. government and agency securities		35,179		799		(3	)		35,975
Corporate debt securities		12,146		153		(27	)		12,272
Total short-term debt securities	$	147,209	$	8,843	$	(408	)	$	155,644
Long-term marketable equity securities	$	669	$	846	$	(1	)	$	1,514

As of September 30, 2012, there were 89 investments in an unrealized loss position. The following tables summarize the gross unrealized losses and fair values of the Company’s short-term investments that have been in a continuous unrealized loss position for less than and greater than 12 months, aggregated by investment category:

	September 30, 2012
	Less than 12 Months					Greater than 12 Months
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(In thousands)
Asset-backed and mortgage-backed securities	$	29,041	$	(424	)	$	2,165	$	(49	)
U.S. government and agency securities		7,099		(1	)		0		0
Total	$	36,140	$	(425	)	$	2,165	$	(49	)

	December 31, 2011
	Less than 12 Months					Greater than 12 Months
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(In thousands)
Asset-backed and mortgage-backed securities	$	10,645	$	(286	)	$	1,301	$	(92	)
U.S. government and agency securities		3,872		(3	)		0		0
Corporate debt securities		2,375		(27	)		505		0
Total	$	16,892	$	(316	)	$	1,806	$	(92	)

Net realized gains on sales of available-for-sale securities were not material for the three and nine months ended September 30, 2012 or October 2, 2011.

Contractual maturities of available-for-sale debt securities as of September 30, 2012 were as follows:

	Available-For-Sale Debt Securities
	(In thousands)
Due within one year	$	30,135
Due in 1-5 years		47,892
Due in 5-10 years		10,671
Due after 10 years		113,822
Total	$	202,520

The maturities of asset-backed and mortgage-backed securities were allocated based on contractual principal maturities assuming no prepayments.