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 United States (“U.S.”) government obligations. Temporary and long-term investments consist of government, bank and corporate obligations, 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 “Non-operating expense, net” within the condensed 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.

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



	July 26, 2015						January 25, 2015
(in thousands)	Market Value		Adjusted Cost		Gross Unrealized Gain		Market Value		Adjusted Cost		Gross Unrealized Gain
Cash equivalents	$	16,859	$	16,859	$	—	$	23,271	$	23,271	$	—
Total investments	$	16,859	$	16,859	$	—	$	23,271	$	23,271	$	—

Agency securities are specific securities that are issued by U.S. government agencies such as Ginnie Mae, Fannie Mae, Freddie Mac or the Federal Home Loan 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 cash and available-for-sale investments:



	July 26, 2015				January 25, 2015
(in thousands)	Market Value		Adjusted Cost		Market Value		Adjusted Cost
Within 1 year	$	16,859	$	16,859	$	23,271	$	23,271
After 1 year through 5 years	—		—		—		—
Total investments	$	16,859	$	16,859	$	23,271	$	23,271

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” within the condensed consolidated balance sheets. The following table summarizes net unrealized gains (losses) arising in the periods presented in addition to the tax associated with these comprehensive income items:



	Three Months Ended					Six Months Ended
(in thousands)	July 26, 2015		July 27, 2014			July 26, 2015		July 27, 2014
Unrealized gain (loss), net of tax	$	84	$	(1	)	$	138	$	—
Increase to deferred tax liability	56		(1		)	98		—

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



	Three Months Ended				Six Months Ended
(in thousands)	July 26, 2015		July 27, 2014		July 26, 2015		July 27, 2014
Interest income	$	3,447	$	12	$	8,236	$	20

The Company accounts for its equity investments under the cost method of accounting when it does not have the ability to exercise significant influence over the investees. For investments where the Company has the ability to exercise significant influence, it uses the equity method of accounting.

In the first six months of fiscal year 2016, the Company acquired an equity stake in Idosens S.A.S. (“Idosens”).

Cost Method Investments



(in thousands)	Equity Investment
Balance at January 25, 2015	$	12,148
Additions	1,600
Disposals	(5,384		)
Balance at July 26, 2015	$	8,364

Equity Method Investments



(in thousands)	Equity Investment
Balance at January 25, 2015	$	—
Investment in Idosens	30
Balance at July 26, 2015	$	30