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Cash, Cash Equivalents and Investments | 9 Months Ended
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Oct. 03, 2015
Cash, Cash Equivalents and Investments |
Cash, Cash Equivalents and Investments | 3. Cash, Cash Equivalents and Investments The Company’s cash equivalents and short-term investments as of October 3, 2015 consisted of municipal bonds, money market funds, variable-rate demand notes, certificates of deposit, international government bonds and corporate bonds. The Company’s long-term investments consisted of auction-rate securities. In fiscal 2008, auctions for many of the Company’s auction-rate securities failed because sell orders exceeded buy orders. As of October 3, 2015, the Company held $8.0 million par value auction-rate securities, all of which have experienced failed auctions. The underlying assets of the securities consisted of student loans and municipal bonds, of which $6.0 million were guaranteed by the U.S. government and the remaining $2.0 million were privately insured. As of October 3, 2015, $6.0 million of the auction-rate securities had credit ratings of AA and $2.0 million had a credit rating of A. These securities have contractual maturity dates ranging from 2033 to 2046 at October 3, 2015. The Company is receiving the underlying cash flows on all of its auction-rate securities. The principal amounts associated with failed auctions are not expected to be accessible until a successful auction occurs, the issuer redeems the securities, a buyer is found outside of the auction process or the underlying securities mature. The Company is unable to predict if these funds will become available before their maturity dates. The Company does not expect to need access to the capital represented by any of its auction-rate securities prior to their maturities. The Company does not intend to sell, and believes it is not more likely than not that it will be required to sell, its auction-rate securities before their anticipated recovery in market value or final settlement at the underlying par value. The Company believes that the credit ratings and credit support of the security issuers indicate that they have the ability to settle the securities at par value. As such, the Company has determined that no other-than-temporary impairment losses existed as of October 3, 2015. The Company’s cash, cash equivalents and investments consisted of the following (in thousands):
|  | October 3, 2015 |
|  | Cost |  | Gross Unrealized Losses |  | Gross Unrealized Gains |  | Fair Value |
Cash and Cash Equivalents: |  |  |  |  |  |  |  |  |
Cash on hand |  | $ | 68,421 |  | $ | — |  | $ | — |  | $ | 68,421 |
Available-for-sale securities: |  |  |  |  |  |  |  |  |
Money market funds |  | 63,316 |  | — |  | — |  | 63,316 |
Certificates of deposit |  | 3,903 |  | — |  | — |  | 3,903 |
Total available-for-sale securities |  | 67,219 |  | — |  | — |  | 67,219 |
Total cash and cash equivalents |  | $ | 135,640 |  | $ | — |  | $ | — |  | $ | 135,640 |
Short-term Investments: |  |  |  |  |  |  |  |  |
Available-for-sale securities: |  |  |  |  |  |  |  |  |
Municipal bonds |  | $ | 98,605 |  | $ | (10 | ) | $ | 146 |  | $ | 98,741 |
Variable-rate demand notes |  | 9,495 |  | — |  | — |  | 9,495 |
International government bonds |  | 2,234 |  | — |  | 1 |  | 2,235 |
Corporate bonds |  | 2,202 |  | (3 | ) | — |  | 2,199 |
Total short-term investments |  | $ | 112,536 |  | $ | (13 | ) | $ | 147 |  | $ | 112,670 |
Long-term Investments: |  |  |  |  |  |  |  |  |
Available-for-sale securities: |  |  |  |  |  |  |  |  |
Auction rate securities |  | $ | 8,000 |  | $ | (760 | ) | $ | — |  | $ | 7,240 |
Total long-term investments |  | $ | 8,000 |  | $ | (760 | ) | $ | — |  | $ | 7,240 |
|  | January 3, 2015 |
|  | Cost |  | Gross Unrealized Losses |  | Gross Unrealized Gains |  | Fair Value |
Cash and Cash Equivalents: |  |  |  |  |  |  |  |  |
Cash on hand |  | $ | 52,144 |  | $ | — |  | $ | — |  | $ | 52,144 |
Available-for-sale securities: |  |  |  |  |  |  |  |  |
Money market funds |  | 71,415 |  | — |  | — |  | 71,415 |
Certificates of deposit |  | 7,739 |  | — |  | — |  | 7,739 |
Commercial paper |  | 5,348 |  | — |  | — |  | 5,348 |
Municipal bonds |  | 1,756 |  | — |  | 1 |  | 1,757 |
U.S. government agency |  | 1,202 |  | — |  | — |  | 1,202 |
Corporate bonds |  | 1,101 |  | — |  | — |  | 1,101 |
U.S. government bonds |  | 1,000 |  | — |  | — |  | 1,000 |
Total available-for-sale securities |  | 89,561 |  | — |  | 1 |  | 89,562 |
Total cash and cash equivalents |  | $ | 141,705 |  | $ | — |  | $ | 1 |  | $ | 141,706 |
Short-term Investments: |  |  |  |  |  |  |  |  |
Available-for-sale securities: |  |  |  |  |  |  |  |  |
Municipal bonds |  | $ | 129,005 |  | $ | (25 | ) | $ | 172 |  | $ | 129,152 |
Corporate bonds |  | 33,043 |  | (35 | ) | 25 |  | 33,033 |
Variable-rate demand notes |  | 12,915 |  | — |  | — |  | 12,915 |
Commercial paper |  | 8,995 |  | — |  | — |  | 8,995 |
Asset-backed securities |  | 5,380 |  | (3 | ) | — |  | 5,377 |
International government bonds |  | 2,526 |  | (10 | ) | — |  | 2,516 |
U.S. government bonds |  | 650 |  | — |  | — |  | 650 |
U.S. government agency |  | 601 |  | — |  | — |  | 601 |
Certificates of deposit |  | 250 |  | — |  | — |  | 250 |
Total short-term investments |  | $ | 193,365 |  | $ | (73 | ) | $ | 197 |  | $ | 193,489 |
Long-term Investments: |  |  |  |  |  |  |  |  |
Available-for-sale securities: |  |  |  |  |  |  |  |  |
Auction rate securities |  | $ | 8,000 |  | $ | (581 | ) | $ | — |  | $ | 7,419 |
Total long-term investments |  | $ | 8,000 |  | $ | (581 | ) | $ | — |  | $ | 7,419 |
The available-for-sale investments that were in a continuous unrealized loss position, aggregated by length of time that individual securities have been in a continuous loss position, were as follows (in thousands):
|  | Less Than 12 Months |  | 12 Months or Greater |  | Total |
As of October 3, 2015 |  | Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses |
Municipal bonds |  | $ | 8,274 |  | $ | (10 | ) | $ | — |  | $ | — |  | $ | 8,274 |  | $ | (10 | )
Auction rate securities |  | — |  | — |  | 7,240 |  | (760 | ) | 7,240 |  | (760 | )
International government bonds |  | 2,199 |  | (3 | ) | — |  | — |  | 2,199 |  | (3 | )
|  | $ | 10,473 |  | $ | (13 | ) | $ | 7,240 |  | $ | (760 | ) | $ | 17,713 |  | $ | (773 | )
|  | Less Than 12 Months |  | 12 Months or Greater |  | Total |
As of January 3, 2015 |  | Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses |
Municipal bonds |  | $ | 23,735 |  | $ | (25 | ) | $ | — |  | $ | — |  | $ | 23,735 |  | $ | (25 | )
Corporate bonds |  | 20,327 |  | (35 | ) | — |  | — |  | 20,327 |  | (35 | )
Auction rate securities |  | — |  | — |  | 7,419 |  | (581 | ) | 7,419 |  | (581 | )
Asset-backed securities |  | 5,080 |  | (3 | ) | — |  | — |  | 5,080 |  | (3 | )
International government bond |  | 2,516 |  | (10 | ) | — |  | — |  | 2,516 |  | (10 | )
|  | $ | 51,658 |  | $ | (73 | ) | $ | 7,419 |  | $ | (581 | ) | $ | 59,077 |  | $ | (654 | )
The gross unrealized losses as of October 3, 2015 and January 3, 2015 were due primarily to the illiquidity of the Company’s auction-rate securities and, to a lesser extent, to changes in market interest rates. The following summarizes the contractual underlying maturities of the Company’s available-for-sale investments at October 3, 2015 (in thousands):
|  | Cost |  | Fair Value |
Due in one year or less |  | $ | 139,704 |  | $ | 139,779 |
Due after one year through ten years |  | 33,136 |  | 33,195 |
Due after ten years |  | 14,915 |  | 14,155 |
|  | $ | 187,755 |  | $ | 187,129 |

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