NOTE 3: Cash, Cash Equivalents, and Investments

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


	September 30, 2012		December 31, 2011
Cash	$	43,260	$	36,404
Cash equivalents		6,799		—
Money market instruments		4,099		1,699

Cash and cash equivalents		54,158		38,103

Corporate bonds		45,025		55,570
Municipal bonds		25,257		54,036
Asset-backed securities		12,184		—
Treasury bills		10,043		1,945
Covered bonds		4,664		1,319
Agency bonds		2,998		27,545
Sovereign bonds		1,699		4,016

Short-term investments		101,870		144,431

Corporate bonds		91,839		59,902
Municipal bonds		58,586		69,680
Treasury bills		35,989		—
Asset-backed securities		35,018		—
Agency bonds		24,025		12,335
Sovereign bonds		6,134		22,355
Covered bonds		2,757		4,701
Limited partnership interest (accounted for using cost method)		5,562		5,933

Long-term investments		259,910		174,906

	$	415,938	$	357,440

The Company’s investment portfolio includes corporate bonds, municipal bonds, asset-backed securities, treasury bills, covered bonds, agency bonds, and sovereign bonds. Corporate bonds consist of debt securities issued by both domestic and foreign companies; municipal bonds consist of debt securities issued by state and local government entities; asset-backed securities consist of debt securities collateralized by pools of receivables or loans with credit enhancement; treasury bills consist of debt securities issued by both the U.S. and foreign governments; covered bonds consist of debt securities backed by governments, mortgages, or public sector loans; agency bonds consist of domestic or foreign obligations of government agencies and government sponsored enterprises that have government backing; and sovereign bonds consist of direct debt issued by foreign governments.

The following tables summarize the Company’s available-for-sale investments as of September 30, 2012 (in thousands):


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Short-term:
Corporate bonds	$	44,935	$	94	$	(4	)	$	45,025
Municipal bonds		25,241		17		(1	)		25,257
Asset-backed securities		12,192		5		(13	)		12,184
Treasury bills		10,044		—		(1	)		10,043
Covered bonds		4,679		—		(15	)		4,664
Agency bonds		2,999		—		(1	)		2,998
Sovereign bonds		1,699		—		—			1,699

Long-term:
Corporate bonds		91,131		723		(15	)		91,839
Municipal bonds		58,246		341		(1	)		58,586
Treasury bills		35,993		2		(6	)		35,989
Asset-backed securities		34,998		48		(28	)		35,018
Agency bonds		24,001		43		(19	)		24,025
Sovereign bonds		6,118		18		(2	)		6,134
Covered bonds		2,753		4		—			2,757

	$	355,029	$	1,295	$	(106	)	$	356,218

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 September 30, 2012 (in thousands):


	Unrealized Loss Position For
	Less than 12 Months
	Fair Value		Unrealized Losses
Treasury bills	$	38,529	$	(7	)
Asset-backed securities		30,573		(41	)
Corporate bonds		17,333		(19	)
Agency bonds		12,558		(20	)
Municipal bonds		4,828		(2	)
Covered bonds		4,664		(15	)
Sovereign bonds		2,464		(2	)

	$	110,949	$	(106	)

As of September 30, 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.

In the third quarter of 2012, management changed the domicile of the subsidiary that held the Company’s Euro-denominated investment portfolio and also changed that subsidiary’s functional currency from the Euro to the U.S. Dollar. As a result of these changes, the investment portfolio was liquidated, primarily during the second quarter of 2012, and those funds were converted to U.S. Dollars. These funds were then used to purchase U.S. Dollar-denominated investments during the third quarter of 2012 once the change of domicile was complete.

The Company recorded gross realized gains and gross realized losses on the sale of investments totaling $342,000 and $1,000, respectively, during the three-month period ended September 30, 2012 and $47,000 and $28,000, respectively, during the three-month period ended October 2, 2011. The Company recorded gross realized gains and gross realized losses of $1,669,000 and $239,000, respectively, during the nine-month period ending September 30, 2012, and $78,000 and $45,000, respectively, during the nine-month period ended October 2, 2011.

The following table presents the effective maturity dates of the Company’s available-for-sale investments as of September 30, 2012 (in thousands):


	<1 Year		1-2 Years		2-3 Years		3-4 Years		4-5 Years		5-7 Years		Total
Corporate bonds	$	45,025	$	19,494	$	61,676	$	8,456	$	2,213	$	—	$	136,864
Municipal bonds		25,257		31,111		10,209		7,530		4,519		5,217		83,843
Asset-backed securities		12,184		17,388		12,595		4,530		—		505		47,202
Treasury bills		10,043		20,009		15,980		—		—		—		46,032
Covered bonds		4,664		961		—		1,796		—		—		7,421
Agency bonds		2,998		8,647		7,935		5,425		1,011		1,007		27,023
Sovereign bonds		1,699		765		3,254		2,115		—		—		7,833

	$	101,870	$	98,375	$	111,649	$	29,852	$	7,743	$	6,729	$	356,218

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 September 30, 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 nine-month period ended September 30, 2012. During the second quarter of 2012, the Company received a stock distribution valued at $371,000 resulting from a portfolio company’s initial public offering. During the third quarter of 2012, the Company recorded a realized loss on this stock distribution of $19,000 when the shares were sold for $352,000.