Composition of Certain Financial Statement Captions

Cash, Cash Equivalents, and Investments

Cash, cash equivalents, and investments consist of the following:



	September 30, 2011		March 30, 2012
	(in thousands)
Cash and cash equivalents:
Cash	$	394,474	$	483,622
Cash equivalents:
Money market funds	142,038		264,366
U.S. agency securities	15,000		—
Total cash and cash equivalents	551,512		747,988
Short-term investments:
Commercial paper	—		20,984
Corporate bonds	52,645		49,885
Municipal debt securities	330,562		274,853
U.S. agency securities	8,074		5,013
Total short-term investments	391,281		350,735
Long-term investments:
Corporate bonds	124,313		75,207
Municipal debt securities	141,639		114,518
U.S. agency securities	6,845		20,079
Total long-term investments	272,797		209,804
Total cash, cash equivalents, and investments	$	1,215,590	$	1,308,527

Our investment portfolio, which is recorded as cash equivalents, short-term investments, and long-term investments, consists of the following:



	September 30, 2011
	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
	(in thousands)
Money market funds	$	142,038	$	—	$	—		$	142,038
U.S. agency securities	29,858		65		(4		)	29,919
Corporate bonds	177,129		316		(487		)	176,958
Municipal debt securities	471,005		1,251		(55		)	472,201
Cash equivalents and investments	$	820,030	$	1,632	$	(546	)	$	821,116



	March 30, 2012
	Amortized Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
	(in thousands)
Money market funds	$	264,366	$	—	$	—		$	264,366
U.S. agency securities	25,054		38		—			25,092
Commercial paper	20,984		—		—			20,984
Corporate bonds	124,540		565		(13		)	125,092
Municipal debt securities	388,574		840		(43		)	389,371
Cash equivalents and investments	$	823,518	$	1,443	$	(56	)	$	824,905

We have classified all of our investments listed in the tables above as available-for-sale securities recorded at fair market value in our condensed consolidated balance sheets, with unrealized gains and losses reported as a component of accumulated other comprehensive income. Upon sale, amounts of gains and losses reclassified into earnings are determined based on specific identification of the securities sold.

The following tables show the gross unrealized losses and the fair value for those available-for-sale securities that were in an unrealized loss position:



	September 30, 2011
	Less than 12 months					12 months or greater					Total
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
	(in thousands)
U.S. agency securities	$	3,997	$	(4	)	$	—	$	—		$	3,997	$	(4	)
Corporate bonds	87,613		(487		)	—		—			87,613		(487		)
Municipal debt securities	79,466		(52		)	2,081		(3		)	81,547		(55		)
Total	$	171,076	$	(543	)	$	2,081	$	(3	)	$	173,157	$	(546	)



	March 30, 2012
	Less than 12 months					12 months or greater				Total
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(in thousands)
Corporate bonds	$	15,642	$	(13	)	$	—	$	—	$	15,642	$	(13	)
Municipal debt securities	57,054		(43		)	—		—		57,054		(43		)
Total	$	72,696	$	(56	)	$	—	$	—	$	72,696	$	(56	)

The unrealized losses on our available-for-sale securities were primarily a result of unfavorable changes in interest rates subsequent to the initial purchase of these securities. As of March 30, 2012, we owned 29 securities that were in an unrealized loss position. We do not intend to sell, nor do we believe we will need to sell, these securities before we recover the associated unrealized losses. We do not consider any portion of the unrealized losses at September 30, 2011 or March 30, 2012 to be an other-than-temporary impairment, nor do we consider any of the unrealized losses to be credit losses.

The following table summarizes the amortized cost and estimated fair value of short-term and long-term available-for-sale investments based on stated maturities:



	March 30, 2012
	Amortized Cost		Fair Value
	(in thousands)
Due within 1 year	$	350,250	$	350,735
Due in 1 to 2 years	193,322		194,147
Due in 2 to 3 years	15,580		15,657
Total	$	559,152	$	560,539

Inventories

Inventories are stated at the lower of cost (first-in, first-out) or market and consist of the following:



	September 30, 2011		March 30, 2012
	(in thousands)
Raw materials	$	10,821	$	5,535
Work in process	2,942		—
Finished goods	12,481		11,027
Inventories	$	26,244	$	16,562

The primary driver of the decrease in inventories from September 30, 2011 to March 30, 2012 is an effort to reduce overall inventory levels in connection with the restructuring of our manufacturing operations and to match anticipated demand for products.

Additionally, $8.8 million of raw materials inventory is included within other non-current assets in our condensed consolidated balance sheet as of March 30, 2012. This inventory was purchased in bulk in fiscal 2012 to obtain a significant volume discount, and is expected to be consumed over a period that exceeds 12 months. We have reviewed anticipated consumption rates of this inventory and do not believe there to be material risk of obsolescence prior to the ultimate sale of the inventory. As a result no reserve has been recorded as of March 30, 2012. All inventory was classified as current as of September 30, 2011.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following:



	September 30, 2011		March 30, 2012
	(in thousands)
Prepaid assets	$	9,365	$	8,373
Other current assets	19,683		15,297
Income tax receivable	7,829		2,429
Prepaid expenses and other current assets	$	36,877	$	26,099

Property, Plant and Equipment

Property, plant and equipment are recorded at cost and consist of the following:



	September 30, 2011			March 30, 2012
	(in thousands)
Land	$	12,778		$	12,844
Buildings	26,623			26,804
Leasehold improvements	44,021			59,242
Machinery and equipment	20,845			24,131
Computer systems and software	71,220			80,882
Furniture and fixtures	10,537			12,408
Products provided under operating leases	1,060			—
	187,084			216,311
Less: accumulated depreciation	(69,977		)	(80,794		)
Property, plant and equipment, net	$	117,107		$	135,517

Depreciation expense for our property, plant and equipment is included in cost of products, cost of services, research and development expenses, sales and marketing expenses, and general and administrative expenses in our condensed consolidated statements of operations.

Goodwill and Intangible Assets

The following table outlines changes to the carrying amount of goodwill:




	(in thousands)
Balance at September 30, 2011	$	263,260
Acquired goodwill	—
Translation adjustments	1,490
Balance at March 30, 2012	$	264,750

Intangible assets consist of the following:



	September 30, 2011							March 30, 2012
	Cost		Accumulated Amortization			Net		Cost		Accumulated Amortization			Net
Intangible assets subject to amortization:	(in thousands)
Acquired patents and technology	$	61,611	$	(32,146	)	$	29,465	$	61,570	$	(36,251	)	$	25,319
Customer relationships	30,748		(12,821		)	17,927		30,748		(14,409		)	16,339
Customer contracts	6,063		(6,063		)	—		—		—			—
Other intangibles	20,308		(16,127		)	4,181		20,308		(17,150		)	3,158
Total	$	118,730	$	(67,157	)	$	51,573	$	112,626	$	(67,810	)	$	44,816

Amortization expense for our intangible assets is included in cost of licensing, cost of products, research and development expenses, and sales and marketing expenses in our condensed consolidated statements of operations.

As of March 30, 2012, our expected amortization expense in future periods is as follows:



Fiscal Year	Amortization Expense
	(in thousands)
Remainder of 2012	$	5,968
2013	11,923
2014	10,279
2015	7,823
2016	5,654
Thereafter	3,169
Total	$	44,816

Accrued Liabilities

Accrued liabilities consist of the following:



	September 30, 2011		March 30, 2012
	(in thousands)
Amounts payable to joint licensing program partners	$	42,502	$	42,350
Accrued compensation and benefits	41,168		35,796
Accrued customer refunds and deposits	10,849		11,011
Accrued professional fees	5,727		4,324
Other accrued liabilities	16,789		14,764
Accrued liabilities	$	117,035	$	108,245

Other Non-Current Liabilities

Other non-current liabilities consist of the following:



	September 30, 2011		March 30, 2012
	(in thousands)
Supplemental retirement plan obligations	$	1,811	$	2,039
Non-current tax liabilities	13,070		19,499
Other liabilities	8,574		9,907
Other non-current liabilities	$	23,455	$	31,445

See Note 7 “Income Taxes” for additional information related to tax liabilities.

Revenue from Material Customer

In the fiscal quarters ended April 1, 2011 and March 30, 2012, revenue from one customer was $37.8 million and $37.4 million, respectively, or 15% and 14% of revenue for each quarter, respectively. In the fiscal year-to-date periods ended April 1, 2011 and March 30, 2012, the same customer accounted for $66.3 million and $69.2 million, respectively, or 13% and 14% of total revenue, respectively.