Silicon Laboratories (SLAB)

5. Short-Term Investments

        Short-term investments consist of the following (in thousands):

        The Company's short-term investments include primarily auction-rate securities and variable-rate demand notes. These securities trade in the money market, but have long-term underlying maturities. The Company's intent is not to hold these securities to their underlying maturities, but to sell these securities to provide liquidity as needed. The following summarizes the contractual underlying maturities of short-term investments (in thousands):

5. Short-Term Investments

        Short-term investments consist of the following (in thousands):

        The
Company's short-term investments include primarily auction-rate securities and variable-rate demand notes. These securities trade in the money
market, but have long-term underlying maturities. The Company's intent is not to hold these securities to their underlying maturities, but to sell these securities to provide liquidity as
needed. The following summarizes the contractual underlying maturities of short-term investments (in thousands):

Short-term Investments

Short-term investments consist of the following debt securities (in thousands):

The Company’s short-term investments have original maturities greater than ninety days as of the date of purchase and have been classified as available-for-sale securities in accordance with Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards (SFAS) No. 115, “Accounting for Certain Investments in Debt and Equity Securities”. The Company has the ability and intent, if necessary, to liquidate any of its investments in order to meet its liquidity needs in the next 12 months. Accordingly, investments with contractual maturities greater than one year from the date of purchase are classified as short-term investments on the consolidated balance sheets. The carrying value of all available-for-sale securities approximates their fair value due to their short-term nature. The Company reviews these investments as of the end of each reporting period for other-than-temporary declines in fair value based on the specific identification method. When the Company concludes that an other-than-temporary impairment has resulted, the difference between the fair value and the carrying value is written off and recorded as an impairment charge in the consolidated statement of income.

The Company has reclassified investments in variable-rate demand notes from cash and cash equivalents to short-term investments in the consolidated balance sheet at December 31, 2005. In addition, the consolidated statement of cash flow for the fiscal year ended December 31, 2005 has been revised to reflect the purchases and maturities of these short-term investments as part of cash flows from investing activities. See RECLASSIFICATIONS above for additional information. Short-term investments at December 31, 2005 and January 1, 2005 consist of the following debt securities (in thousands):

F-8

2.   SIGNIFICANT ACCOUNTING POLICIES (Continued)

The Company’s short-term investments have original maturities greater than ninety days as of the date of purchase and have been classified as available-for-sale securities in accordance with Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards (SFAS) No. 115, “Accounting for Certain Investments in Debt and Equity Securities”. The Company has the ability and intent, if necessary, to liquidate any of its investments in order to meet its liquidity needs in the next 12 months. Accordingly, investments with contractual maturities greater than one year from the date of purchase are classified as short-term investments on the consolidated balance sheets. The carrying value of all available-for-sale securities approximates their fair value due to their short-term nature. The Company reviews these investments as of the end of each reporting period for other-than-temporary declines in fair value based on the specific identification method. When the Company concludes that an other-than-temporary impairment has resulted, the difference between the fair value and the carrying value is written off and recorded as an impairment charge in the consolidated statement of income. Short-term investments at December 31, 2005 and January 1, 2005 consist of the following debt securities (in thousands):