Composition of Certain Financial Statement Captions

Cash, Cash Equivalents, and Investments

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



	December 28, 2012		September 28, 2012
	(in thousands)
Cash and cash equivalents:
Cash	$	288,558	$	468,622
Cash equivalents:
Money market funds	9,241		17,090
U.S. agency securities	16,393		—
Commercial paper	1,000		4,885
Corporate bonds	1,001		—
Municipal debt securities	—		2,003
Total cash and cash equivalents	316,193		492,600
Short-term investments:
U.S. agency securities	2,003		3,999
Commercial paper	7,050		19,414
Corporate bonds	51,871		107,243
Municipal debt securities	57,757		172,037
Total short-term investments	118,681		302,693
Long-term investments (1):
U.S. agency securities	38,015		21,013
Commercial paper	2,974		—
Corporate bonds	104,128		112,993
Municipal debt securities	160,160		227,608
Other long-term investments (2)	3,000		—
Total long-term investments	308,277		361,614
Total cash, cash equivalents and investments	$	743,151	$	1,156,907


(1)	Our long-term investments have maturities that range from one to three years.


(2)	Other long-term investments include a $3.0 million investment made in the first quarter of fiscal 2013, which we have accounted for under the cost method of accounting, for which there were no indicators of potential impairment at December 28, 2012.

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



	December 28, 2012
	Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
	(in thousands)
Money market funds	$	9,241	$	—	$	—		$	9,241
U.S. agency securities	56,403		10		(2		)	56,411
Commercial paper	11,024		—		—			11,024
Corporate bonds	156,637		443		(80		)	157,000
Municipal debt securities	217,715		323		(121		)	217,917
Cash equivalents and investments	$	451,020	$	776	$	(203	)	$	451,593



	September 28, 2012
	Cost		Unrealized Gains		Unrealized Losses			Estimated Fair Value
	(in thousands)
Money market funds	$	17,090	$	—	$	—		$	17,090
U.S. agency securities	24,997		18		(3		)	25,012
Commercial paper	24,299		—		—			24,299
Corporate bonds	219,265		990		(19		)	220,236
Municipal debt securities	400,958		728		(38		)	401,648
Cash equivalents and investments	$	686,609	$	1,736	$	(60	)	$	688,285

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:



	December 28, 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)
U.S. agency securities	$	26,401	$	(2	)	$	—	$	—	$	26,401	$	(2	)
Corporate bonds	53,111		(80		)	—		—		53,111		(80		)
Municipal debt securities	81,193		(121		)	—		—		81,193		(121		)
Total	$	160,705	$	(203	)	$	—	$	—	$	160,705	$	(203	)



	September 28, 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)
U.S. agency securities	$	6,999	$	(3	)	$	—	$	—		$	6,999	$	(3	)
Corporate bonds	25,277		(19		)	—		—			25,277		(19		)
Municipal debt securities	87,705		(37		)	5,565		(1		)	93,270		(38		)
Total	$	119,981	$	(59	)	$	5,565	$	(1	)	$	125,546	$	(60	)

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 December 28, 2012, we had certain securities that were in an unrealized loss position. We do not intend to sell, nor will we need to sell, these securities before we recover the associated unrealized losses. We expect to recover the full carrying value of these securities. As a result, we do not consider any portion of the unrealized losses at December 28, 2012 or September 28, 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 as of December 28, 2012 and September 28, 2012:



	December 28, 2012				September 28, 2012
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in thousands)				(in thousands)
Due within 1 year	$	118,494	$	118,681	$	302,154	$	302,693
Due in 1 to 2 years	167,779		168,010		209,302		209,871
Due in 2 to 3 years	$	137,112	$	137,267	$	151,174	$	151,743
Total	$	423,385	$	423,958	$	662,630	$	664,307

Accounts Receivable

Accounts receivable consists of the following:



	December 28, 2012			September 28, 2012
	(in thousands)
Trade accounts receivable	$	50,172		$	43,565
Accounts receivable related to patent administration program	2,324			886
Accounts receivable, gross	52,496			44,451
Less: allowance for doubtful accounts	(699		)	(956		)
Accounts receivable, net	$	51,797		$	43,495

Inventories

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



	December 28, 2012		September 28, 2012
	(in thousands)
Raw materials	$	3,933	$	4,403
Finished goods	17,090		12,297
Inventories	$	21,023	$	16,700

We have included $4.7 million and $6.5 million of raw materials inventory within other non-current assets in our condensed consolidated balance sheets as of December 28, 2012 and September 28, 2012, respectively. 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 valuation reserve has been recorded as of December 28, 2012.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following:



	December 28, 2012		September 28, 2012
	(in thousands)
Prepaid assets	$	13,884	$	14,955
Other current assets	9,358		13,165
Income tax receivable	4,961		5,712
Prepaid expenses and other current assets	$	28,203	$	33,832

Property, Plant and Equipment

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



	December 28, 2012			September 28, 2012
	(in thousands)
Land	$	48,219		$	48,227
Buildings	33,582			27,266
Leasehold improvements	64,467			68,352
Machinery and equipment	33,363			29,070
Computer systems and software	87,527			86,266
Furniture and fixtures	13,359			13,158
Construction in progress	80,460			79,965
	360,977			352,304
Less: accumulated depreciation	(106,616		)	(97,628		)
Property, plant and equipment, net	$	254,361		$	254,676

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:



	Total
	(in thousands)
Balance at September 28, 2012	$	281,375
Translation adjustments	388
Balance at December 28, 2012	$	281,763

Intangible assets consist of the following:



	December 28, 2012							September 28, 2012
	Cost		Accumulated Amortization			Net		Cost		Accumulated Amortization			Net
Intangible assets subject to amortization:	(in thousands)
Acquired patents and technology	$	79,631	$	(42,886	)	$	36,745	$	79,213	$	(40,071	)	$	39,142
Customer relationships	30,693		(17,195		)	13,498		30,679		(16,386		)	14,293
Other intangibles	20,943		(18,273		)	2,670		20,925		(17,834		)	3,091
Total	$	131,267	$	(78,354	)	$	52,913	$	130,817	$	(74,291	)	$	56,526

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

As of December 28, 2012, our expected amortization expense in future periods is as follows:



Fiscal Year	Amortization Expense
	(in thousands)
Remainder of 2013	$	11,614
2014	13,473
2015	11,017
2016	8,848
2017	5,736
Thereafter	2,225
Total	$	52,913

Accrued Liabilities

Accrued liabilities consist of the following:



	December 28, 2012		September 28, 2012
	(in thousands)
Accrued royalties	$	2,432	$	2,391
Amounts payable to joint licensing program partners	33,329		35,492
Accrued compensation and benefits	32,439		47,331
Accrued professional fees	5,267		4,893
Other accrued liabilities	25,552		25,985
Accrued liabilities	$	99,019	$	116,092

Other Non-Current Liabilities

Other non-current liabilities consist of the following:



	December 28, 2012		September 28, 2012
	(in thousands)
Supplemental retirement plan obligations	$	1,964	$	2,042
Non-current tax liabilities	19,917		20,862
Other liabilities	18,197		16,933
Other non-current liabilities	$	40,078	$	39,837

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