Note 3—Balance Sheet Information

Cash and Cash Equivalents

Cash and cash equivalents include cash and certain highly liquid investments. Highly liquid investments with maturities of three months or less when purchased may be classified as cash equivalents. Such items may include liquid money market accounts, treasury bills, government agency securities and corporate debt. The investments that are classified as cash equivalents are carried at cost, which approximates fair value.

Short-Term Investments

Available-for-sale securities consist of the following (in thousands):

	March 31, 2013
	Amortized Cost		Gains in Accumulated Other Comprehensive Income		Losses in Accumulated Other Comprehensive Income			Estimated Fair Value
Treasury bills	$	271,168	$	33	$	—		$	271,201
Government agency securities	8,055		—		—			8,055
Corporate bonds	63,488		38		(27		)	63,499
Commercial paper	19,992		—		—			19,992
Total available-for-sale securities	$	362,703	$	71	$	(27	)	$	362,747

	December 31, 2012
	Amortized Cost		Gains in Accumulated Other Comprehensive Income		Losses in Accumulated Other Comprehensive Income		Estimated Fair Value
Treasury bills	$	184,102	$	76	$	—	$	184,178
Government agency securities	8,056		—		—		8,056
Total available-for-sale securities	$	192,158	$	76	$	—	$	192,234

During the three months ended March 31, 2013 and 2012, available-for-sale securities were liquidated for total proceeds of $101.2 million and $43.6 million, respectively. The gross realized gains and losses on these sales were $0.1 million for the three months ended March 31, 2013 and minimal gross realized gains for the three months ended March 31, 2012. The cost of securities sold is based on specific identification.

The table below shows the fair value of short-term investments that have been in an unrealized loss position for less than 12 months as of March 31, 2013 (in thousands):

	Estimated Fair value		Unrealized Losses
Corporate bonds	$	28,491	$	(27	)
Total	$	28,491	$	(27	)

We did not hold any short-term investments that have been in an unrealized loss position for 12 months or longer for the period noted in the preceding table.

The Company regularly reviews its investment portfolio to identify and evaluate investments that have indications of possible impairment. Factors considered in determining whether an unrealized loss was considered to be temporary or other-than-temporary and therefore impaired include: the length of time and extent to which fair value has been lower than the cost basis; the financial condition and near-term prospects of the investee; and whether it is more likely than not that the Company will be required to sell the security prior to recovery. The Company believes the gross unrealized losses on the Company’s short-term investments as of March 31, 2013 were temporary in nature and therefore did not recognize any impairment. As of December 31, 2012 we did not hold any short-term investments that were in a loss position.

Contractual maturities of available-for-sale securities are as follows (in thousands):

	March 31, 2013
	Estimated Fair Value
Due in one year or less	$	288,752
Due in 1—2 years	32,811
Due in 2—3 years	41,184
Total available-for-sale securities	$	362,747

Actual maturities may differ from contractual maturities because some borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

Restricted Cash

As of March 31, 2013 and December 31, 2012, restricted cash consisted of $2.1 million and $2.0 million, respectively, which serves as collateral for bank guarantees that provide financial assurance that the Company will fulfill certain customer obligations. This cash is held in custody by the issuing bank and is restricted as to withdrawal or use while the related bank guarantees are outstanding.

Accounts Receivable, Net

Accounts receivable are shown net of the allowance for doubtful accounts of $0.5 million as of March 31, 2013 and December 31, 2012.

Inventories

Inventories are stated at the lower of cost (principally first-in, first-out) or market. Inventories consist of (in thousands):

	March 31,		December 31,
	2013		2012
Materials	$	44,219	$	36,523
Work in process	17,248		13,363
Finished goods	6,222		9,921
	$	67,689	$	59,807

Cost Method Investment

As of March 31, 2013 and December 31, 2012 we have recorded a total investment of $14.5 million in a rapidly developing organic light emitting diode (“OLED”) equipment company (the “Investment”). Our ownership in the Investment is approximately 15.3% of the preferred shares and a 12.0% interest in the total company. Since we do not exert significant influence on the Investment, this investment is treated under the cost method in accordance with applicable accounting guidance. The fair value of this investment is not estimated because there are no identified events or changes in circumstances that may indicate an other-than-temporary decline in the fair value of the investment and we are exempt from estimating interim fair values because the investment does not meet the definition of a publicly traded company. This investment is recorded in other assets in our Condensed Consolidated Balance Sheets. Subsequently, during the second and third quarters of 2013, we invested an additional $0.8 million in the Investment each quarter.

Customer Deposits

As of March 31, 2013 and December 31, 2012, we had customer deposits of $38.4 million and $32.7 million, respectively, which are recorded as a component of accrued expenses and other current liabilities.

Accrued Warranty

We estimate the costs that may be incurred under the warranties we provide and record a liability in the amount of such costs at the time the related revenue is recognized. Factors that affect our warranty liability include product failure rates, material usage and labor costs incurred in correcting product failures during the warranty period. This accrual is recorded in accrued expense and other current liabilities in our Condensed Consolidated Balance Sheets. We periodically assess the adequacy of our recognized warranty liability and adjust the amount as necessary. Changes in our warranty liability during the period are as follows (in thousands):

	Three months ended
	March 31,
	2013			2012
Balance as of the beginning of period	$	4,942		$	8,731
Warranties issued during the period	478			696
Settlements made during the period	(1,341		)	(1,840		)
Changes in estimate during the period	—			327
Balance as of the end of period	$	4,079		$	7,914

In the current year’s presentation we no longer include installation in the accrued warranty balance; therefore, in order to conform the balance to current year presentation, we have reclassified $1.047 million from the beginning balance of 2012 accrued warranty to accrued installation which, along with accrued warranty, is also a component of Accrued expenses and other current liabilities.

Mortgage Payable

We have a mortgage payable with approximately $2.3 million outstanding as of March 31, 2013 and $2.4 million outstanding as of December 31, 2012. The mortgage accrues interest at an annual rate of 7.91%, and the final payment is due on January 1, 2020. The fair value of the mortgage as of March 31, 2013 was approximately $2.5 million and $2.6 million as of December 31, 2012.

Accumulated Other Comprehensive Income

The components of accumulated other comprehensive income are (in thousands):

As of March 31, 2013	Gross			Taxes			Net
Translation adjustments	$	6,290		$	(352	)	$	5,938
Minimum pension liability	(1,285		)	510			(775		)
Unrealized gain on available-for-sale securities	44			(13		)	31
Accumulated other comprehensive income	$	5,049		$	145		$	5,194

As of December 31, 2012	Gross			Taxes			Net
Translation adjustments	$	7,040		$	(339	)	$	6,701
Minimum pension liability	(1,285		)	510			(775		)
Unrealized gain on available-for-sale securities	76			(29		)	47
Accumulated other comprehensive income	$	5,831		$	142		$	5,973