Cash, Cash Equivalents, and Investments

6 Months Ended

Jul. 01, 2012

Cash, Cash Equivalents, and Investments [Abstract]

Cash, Cash Equivalents, and Investments

NOTE 3: Cash, Cash Equivalents, and Investments

Cash, cash equivalents, and investments consisted of the following (in thousands):

	July 1, 2012		December 31, 2011
Cash	$	25,422	$	36,404
Cash equivalents		134,016		—
Money market instruments		46,554		1,699
Cash and cash equivalents		205,992		38,103
Municipal bonds		39,827		54,036
Corporate bonds		18,162		55,570
Asset-backed securities		1,601		—
Corporate stock		353		—
Agency bonds		—		27,545
Sovereign bonds		—		4,016
Covered bonds		—		1,319
Treasury bills		—		1,945
Short-term investments		59,943		144,431
Municipal bonds		82,866		69,680
Corporate bonds		27,897		59,902
Sovereign bonds		3,882		22,355
Asset-backed securities		3,540		—
Agency bonds		1,001		12,335
Covered bonds		—		4,701
Limited partnership interest (accounted for using cost method)		5,562		5,933
Long-term investments		124,748		174,906
	$	390,683	$	357,440

The Company’s investment portfolio consists of municipal bonds, corporate bonds, asset-backed securities, sovereign bonds, agency bonds, and corporate stock. Municipal bonds consist of debt securities issued by state and local government entities; corporate bonds consist of debt securities issued by both domestic and foreign companies; asset-backed securities consist of debt securities collateralized by pools of receivables or loans with credit enhancement; sovereign bonds consist of direct debt issued by foreign governments; agency bonds consist of domestic or foreign obligations of government agencies and government sponsored enterprises that have government backing; and corporate stock consists of shares of stock in a publicly-traded U.S. corporation that the Company received as a distribution from a venture capital fund.

The following tables summarize the Company’s available-for-sale investments as of July 1, 2012 (in thousands):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Short-term:
Municipal bonds	$	39,787	$	44	$	(4	)	$	39,827
Corporate bonds		18,123		39		—			18,162
Asset-backed securities		1,600		1		—			1,601
Long-term:
Municipal bonds		82,535		352		(21	)		82,866
Corporate bonds		27,631		266		—			27,897
Sovereign bonds		3,771		111		—			3,882
Asset-backed securities		3,520		20		—			3,540
Agency bonds		1,000		1		—			1,001
	$	177,967	$	834	$	(25	)	$	178,776

The following table summarizes the Company’s gross unrealized losses and fair values for available-for-sale investments in an unrealized loss position as of July 1, 2012 (in thousands):

	Unrealized Loss Position For:
	Less than 12 Months					12 Months or Greater				Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Municipal bonds	$	23,739	$	(25	)	$	—	$	—	$	23,739	$	(25	)

As of July 1, 2012, the Company did not recognize an other-than-temporary impairment of these investments. In its evaluation, management considered the type of security, the credit rating of the security, the length of time the security has been in a loss position, the size of the loss position, our intent and ability to hold the security to expected recovery of value, and other meaningful information. The Company does not intend to sell, and is unlikely to be required to sell, any of these available-for-sale investments before its effective maturity or market price recovery.

During the second quarter of 2012, the Company sold the majority of its Euro-denominated investments. As of July 1, 2012, the Company still held one short-term German corporate bond valued at $1,876,000 and one long-term German sovereign bond valued at $3,882,000. The proceeds from the sale of the Euro-denominated investments were held in cash equivalents as of July 1, 2012. The Company expects to use these funds to purchase U.S. Dollar-denominated investments during the third quarter of 2012. The Company recorded gross realized gains and gross realized losses on the sale of investments totaling $1,233,000 and $238,000, respectively, during the three-month period ended July 1, 2012, and $1,327,000 and $238,000, respectively, during the six-month period ending July 1, 2012.

The following table presents the effective maturity dates of the Company’s available-for-sale investments as of July 1, 2012 (in thousands):

	<1 Year		1-2 Years		2-3 Years		3-4 Years		4-5 Years		5-7 Years		Total
Municipal bonds	$	39,827	$	32,506	$	29,458	$	10,100	$	5,680	$	5,122	$	122,693
Corporate bonds		18,162		10,124		14,202		—		3,571		—		46,059
Asset-backed securities		1,601		—		3,037		—		—		503		5,141
Sovereign bonds		—		3,882		—		—		—		—		3,882
Agency bonds		—		1,001		—		—		—		—		1,001
	$	59,590	$	47,513	$	46,697	$	10,100	$	9,251	$	5,625	$	178,776

In June 2000, the Company became a Limited Partner in Venrock Associates III, L.P. (Venrock), a venture capital fund. A Director of the Company was a General Partner of Venrock Associates through December 31, 2009. The Company has committed to a total investment in the limited partnership of up to $20,500,000, with an expiration date of December 31, 2013. As of July 1, 2012, the Company contributed $19,886,000 to the partnership. The remaining commitment of $614,000 can be called by Venrock at any time before December 31, 2013. Distributions and contributions are at the discretion of Venrock’s management. No contributions were made during the six-month period ended July 1, 2012. The Company received a stock distribution valued at $371,000 on June 26, 2012 resulting from a portfolio company’s initial public offering. The Company recorded an unrealized loss on this stock distribution of $18,000 during the three-month period ended July 1, 2012 to result in a fair value of $353,000 as of July 1, 2012. These shares were classified as a trading investment as of July 1, 2012 and were sold for $352,000 on July 2, 2012.