Investments

9 Months Ended

Sep. 30, 2011

Investments [Abstract]

Investments

2. Investments

Management determines the appropriate classification of securities at the time of purchase and reevaluates such designation as of each balance sheet date. Currently, we classify all securities as available-for-sale. We carry available-for-sale securities at fair value, with temporary unrealized gains and losses, net of tax, reported in accumulated other comprehensive income, a component of stockholders' investment. The amortized cost of debt securities in this category reflects amortization of premiums and accretion of discounts to maturity computed under the effective interest method. We include this amortization in the caption "Net investment income and other" within the Condensed Consolidated Statement of Operations. We also include in "Net investment income and other" realized gains and losses on sales of securities and declines in value of securities determined to be other-than-temporary. We base the cost of securities sold upon the specific identification method. We include interest and dividends on securities classified as available-for-sale in net investment income.

The following table summarizes unrealized gains and losses related to our investments designated as available-for-sale (in thousands):

	September 30, 2011
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Corporate obligations	$	10,139	$	—	$	(2	)	$	10,137
U.S. Government notes		16,604		2		(127	)		16,479
Auction rate municipal securities		903		30		—			933
Total investments	$	27,646	$	32	$	(129	)	$	27,549
	December 31, 2010
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Corporate obligations	$	18,492	$	1	$	(1	)	$	18,492
U.S. Government notes		11,585		—		(29	)		11,556
Municipal securities		1,006		2		—			1,008
Auction rate municipal securities		924		27		—			951
Auction rate preferred securities		891		—		—			891
Total investments	$	32,898	$	30	$	(30	)	$	32,898

The following table presents gross unrealized losses and fair values for those investments that were in an unrealized loss position as of September 30, 2011 and December 31, 2010, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in thousands):

	September 30, 2011					December 31, 2010
	Less than 12 Months					Less than 12 Months
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
Corporate obligations	$	8,286	$	(2	)	$	6,624	$	(1	)
U.S. Government notes		15,554		(127	)		10,179		(29	)
	$	23,840	$	(129	)	$	16,803	$	(30	)

We realized gains of $8,000 and losses of $22,000, primarily on the sale of our debt securities for the three months ended September 30, 2011, and realized gains of $35,000 and losses of $44,000 for the nine months ended September 30, 2011. We had realized gains of $27,000 and no losses on the sale of debt securities for the three months ended September 30, 2010 and realized gains of $1.1 million and losses of $50,000 for the nine months ended September 30, 2010.

There were no other-than-temporary impairments to our investment securities for the three and nine months ended September 30, 2011 and 2010. When evaluating investments for other-than-temporary impairment, we review factors such as the length of time and extent to which fair value has been below cost basis, the financial condition of the issuer of the investment securities and any changes thereto, and our intent to sell, or whether it is more-likely-than-not we would be required to sell the investment before recovery of the investment's amortized cost basis.

The following table shows the net carrying value (amortized cost) and estimated fair value of debt and equity securities at September 30, 2011 by contractual maturity (in thousands). Expected maturities may differ from contractual maturities because the issuers of the securities may have the right or obligation to prepay obligations without prepayment penalties.

	Amortized Cost		Estimated Fair Value
Due in one year or less	$	26,743	$	26,616
Due after one year through three years		—		—
Due after three years		903		933
Total investments	$	27,646	$	27,549

Auction Rate Securities

At September 30, 2011 and December 31, 2010, we held $1.1 million and $2.2 million par value, respectively, of various auction rate securities. The assets underlying the auction rate instruments are primarily municipal bonds and preferred closed end funds. Maturity dates for our auction rate securities range from 2030 to 2036. In the three months ended September 30, 2011, $25,000 of auction rate securities were called at par by the issuer, resulting in a gain of $4,000. In the nine months ended September 30, 2011, we redeemed auction rate preferred securities with a par value of $1.1 million for $916,000.

As a result of failed auctions, our auction rate instruments are not currently liquid. Due to the continuation of the unstable credit environment, we believe that the recovery period for most of our auction rate instruments will exceed 12 months. Accordingly, we have classified the fair value of the auction rate instruments that were not redeemed prior to September 30, 2011 as long-term.