CASH, CASH EQUIVALENTS AND INVESTMENTS

Cadence's cash, cash equivalents and short-term investments at fair value as of September 29, 2012 and December 31, 2011 were as follows:



	As of
	September 29, 2012		December 31, 2011
	(In thousands)
Cash and cash equivalents	$	649,099	$	601,602
Short-term investments	95,819		3,037
Cash, cash equivalents and short-term investments	$	744,918	$	604,639

Cash and Cash Equivalents

Cadence considers all highly liquid investments with original maturities of three months or less on the date of purchase to be cash equivalents. The following table summarizes Cadence’s cash and cash equivalents at fair value as of September 29, 2012 and December 31, 2011:



	As of
	September 29, 2012		December 31, 2011
	(In thousands)
Cash and interest bearing deposits	$	158,658	$	117,500
Money market funds	484,465		484,102
United States Treasury securities	3,975		—
Bank certificates of deposit	1,000		—
Corporate debt securities	501		—
Commercial paper	500		—
Total cash and cash equivalents	$	649,099	$	601,602

The amortized cost of Cadence's cash equivalents approximates fair value.

Short-Term Investments

Cadence’s short-term investments include marketable debt securities with original maturities greater than three months on the date of purchase and marketable equity securities. Cadence considers its entire portfolio of marketable debt and equity securities to be available for sale and available to fund current operations. Available-for-sale debt securities are carried at fair value, with the unrealized gains and losses presented net of tax as a separate component of other comprehensive income. Unrealized and realized gains and losses are determined using the specific identification method.

Cadence recognizes gains on its available-for-sale securities when they are realized. Cadence recognizes losses on its available-for-sale securities when they are realized or when Cadence has determined that an other-than-temporary decline in fair value has occurred. For an available-for-sale debt security, an other-than-temporary decline in fair value has occurred when the security’s fair value is less than its amortized cost basis and Cadence intends to sell the security, or it is more likely than not that Cadence will be required to sell the security, before recovery of its amortized cost basis. Cadence records realized gains, realized losses and other-than-temporary impairments as part of other income (expense), net in the Condensed Consolidated Income Statements.

The following tables summarize Cadence’s short-term investments as of September 29, 2012 and December 31, 2011:



	As of September 29, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(In thousands)
Corporate debt securities	$	32,551	$	63	$	(1	)	$	32,613
Bank certificates of deposit	28,506		17		(1		)	28,522
United States Treasury securities	21,436		24		—			21,460
United States government agency securities	8,222		13		—			8,235
Commercial paper	2,986		2		—			2,988
Marketable equity securities	1,823		178		—			2,001
Total short-term investments	$	95,524	$	297	$	(2	)	$	95,819



	As of December 31, 2011
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In thousands)
Marketable equity securities	$	1,830	$	1,207	$	—	$	3,037
Total short-term investments	$	1,830	$	1,207	$	—	$	3,037

Cadence purchased its investments in marketable debt securities during the three months ended June 30, 2012 and the three months ended September 29, 2012. As of September 29, 2012, any security Cadence held with an unrealized loss had been held for less than six months.

The amortized cost and estimated fair value of marketable debt securities included in short-term investments as of September 29, 2012, by contractual maturity, are shown in the table below. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations without call or prepayment penalties.



	Amortized Cost		Fair Value
	(In thousands)
Due in less than one year	$	56,437	$	56,485
Due in one to three years	37,264		37,333
Total marketable debt securities included in short-term investments	$	93,701	$	93,818

Realized gains from the sale of marketable debt and equity securities during three and nine months ended September 29, 2012 and October 1, 2011 were as follows:



	Three Months Ended				Nine Months Ended
	September 29, 2012		October 1, 2011		September 29, 2012		October 1, 2011
	(In thousands)				(In thousands)
Gains on sale of marketable debt and equity securities	$	8	$	—	$	125	$	8,052

Amortization of premium or discount related to Cadence’s marketable debt securities for the three and nine months ended September 29, 2012 and October 1, 2011 was as follows:



	Three Months Ended				Nine Months Ended
	September 29, 2012		October 1, 2011		September 29, 2012		October 1, 2011
	(In thousands)				(In thousands)
Amortization of premium (discount)	$	251	$	—	$	271	$	—

Non-Marketable Investments

Cadence’s non-marketable investments generally consist of voting preferred stock or convertible debt of privately-held companies and are included in other assets on Cadence’s Condensed Consolidated Balance Sheets. If Cadence determines that it has the ability to exercise significant influence over the issuer, which may include considering whether the investments are in-substance common stock, the investment is accounted for using the equity method.

Cadence’s non-marketable investments as of September 29, 2012 and December 31, 2011 were as follows:



	As of
	September 29, 2012		December 31, 2011
	(In thousands)
Cost method	$	5,054	$	6,157
Equity method	4,283		4,303
Total non-marketable investments	$	9,337	$	10,460

Net realized gains on the sale of non-marketable investments during the three and nine months ended September 29, 2012 and October 1, 2011 were as follows:



	Three Months Ended				Nine Months Ended
	September 29, 2012		October 1, 2011		September 29, 2012		October 1, 2011
	(In thousands)				(In thousands)
Gains on sale of non-marketable investments	$	—	$	5,379	$	—	$	8,108