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Investments
3 Months Ended
Mar. 31, 2013
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. 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 reflects amortization of premiums and accretion of discounts to maturity computed under the effective interest method. We included this amortization in the caption “Net investment income and other” within the Condensed Consolidated Statement of Operations and Comprehensive Income. We also included 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.

We did not hold any investment securities as of March 31, 2013 and we did not recognize any realized or unrealized gains or losses on the sale of investment securities during the three months ended March 31, 2013. We realized gains of $3,000 and no losses on the sale of our investment securities for the three months ended March 31, 2012. We recognized unrealized gains of $2,000 and unrealized losses of $4,000 in accumulated other comprehensive income as of March 31, 2012. No investments were held in an unrealized loss position for greater than 12 months at March 31, 2012.

At March 31, 2012 we held $1.1 million par value of various auction rate securities. The assets underlying the auction rate instruments were municipal bonds. Maturity dates for these auction rate municipal securities ranged from 2030 to 2036. Given the extent of the decline in fair value associated with our auction rate securities, we recognized an other-than-temporary impairment of $11,000, before taxes, during the three months ended March 31, 2012. 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. All previously held auction rate securities were sold in advance of the original maturity date in late 2012. No other-than-temporary impairment was recognized in the three months ended March 31, 2013.