Investments

Investments that have original maturities of three months or less are accounted for as cash equivalents. This includes money market funds, time deposits and U.S. government obligations. Temporary and long-term investments consist of government, bank and corporate obligations, and bank time deposits with original maturity dates in excess of three months. Temporary investments have original maturities in excess of three months, but mature within twelve months of the balance sheet date. Long-term investments have original maturities in excess of twelve months. The Company determines the cost of securities sold based on the specific identification method. Realized gains or losses are reported in “Interest income and other (expense) income, net” on the consolidated statements of operations.

The Company classifies its investments as available-for-sale because it may sell some securities prior to maturity. The Company’s investments are subject to market risk, primarily interest rate and credit risks. The Company’s investments are managed by a limited number of outside professional managers that operate within investment guidelines set by the Company. These guidelines include specified permissible investments, minimum credit quality ratings and maximum average duration restrictions and are intended to limit market risk by restricting the Company’s investments to high quality debt instruments with relatively short-term maturities.

As of January 25, 2015, all of the Company’s long-term investments had been liquidated.

The following table summarizes the Company’s available-for-sale investments:



	January 25, 2015						January 26, 2014
(in thousands)	Market Value		Adjusted Cost		Gross Unrealized Gain		Market Value		Adjusted Cost		Gross Unrealized Gain
Agency securities	$	23,271	$	23,271	$	—	$	18,258	$	18,257	$	1
Bank time deposits	—		—		—		—		—		—
Total investments	$	23,271	$	23,271	$	—	$	18,258	$	18,257	$	1

Agency securities are specific securities that are issued by United States government agencies such as Ginnie Mae, Fannie Mae, Freddie Mac or other federal banks. Due to the expectation of federal backing, these securities usually hold the highest credit rating possible.

The following table summarizes the maturities of the Company’s available-for-sale investments:



	January 25, 2015				January 26, 2014
(in thousands)	Market Value		Adjusted Cost		Market Value		Adjusted Cost
Within 1 year	$	23,271	$	23,271	$	14,584	$	14,584
After 1 year through 5 years	—		—		3,674		3,673
Total investments	$	23,271	$	23,271	$	18,258	$	18,257

Unrealized gains and losses are the result of fluctuations in the market value of the Company’s available-for-sale investments and are included in “Accumulated other comprehensive income” on the consolidated balance sheets. The following table summarizes net unrealized losses arising in the periods presented in addition to the tax associated with these comprehensive income items:



	Fiscal Year Ended
(in thousands)	January 25, 2015		January 26, 2014			January 27, 2013
Unrealized loss, net of tax	$	—	$	(5	)	$	(32	)
Decrease to deferred tax liability	$	—	$	(2	)	$	(10	)

The following table summarizes interest income generated from investments and cash and cash equivalents:



	Fiscal Year Ended
(in thousands)	January 25, 2015		January 26, 2014		January 27, 2013
Interest income	$	43	$	342	$	404

During fiscal years 2015 and 2014, the Company made investments in privately traded companies for cash consideration of $7.1 million and $2.5 million, respectively. The Company’s total equity investments in privately traded companies as of January 25, 2015 and January 26, 2014 were $12.1 million and $5.0 million, respectively. The Company accounts for its equity investment under the cost method of accounting since it does not have the ability to exercise significant influence over the investees. The equity investments are included in “Other assets” on the consolidated balance sheet as of January 25, 2015 and January 26, 2014, respectively.