Cash, Cash Equivalents and Investments

3 Months Ended

Mar. 31, 2012

Cash, Cash Equivalents and Investments

Cash, Cash Equivalents and Investments

3. Cash, Cash Equivalents and Investments

The Company’s cash equivalents and short-term investments as of March 31, 2012 consisted of corporate bonds, municipal bonds, variable-rate demand notes, money market funds, U.S. Treasury bills, U.S. government bonds, asset-backed securities, U.S. government agency bonds and discount notes and international government bonds. The Company’s long-term investments consist of auction-rate securities. Early in fiscal 2008, auctions for many of the Company’s auction-rate securities failed because sell orders exceeded buy orders. As of March 31, 2012, the Company held $19.2 million par value auction-rate securities, all of which have experienced failed auctions. The underlying assets of the securities consisted of student loans and municipal bonds, of which $17.2 million were guaranteed by the U.S. government and the remaining $2.0 million were privately insured. As of March 31, 2012, $11.2 million of the auction-rate securities had credit ratings of AAA, $6.0 million of the auction-rate securities had credit ratings of AA and $2.0 million had a credit rating of A. These securities have contractual maturity dates ranging from 2029 to 2046 and with current yields of 0.28% to 3.58% per year at March 31, 2012. The Company is receiving the underlying cash flows on all of its auction-rate securities. The principal amounts associated with failed auctions are not expected to be accessible until a successful auction occurs, the issuer redeems the securities, a buyer is found outside of the auction process or the underlying securities mature. The Company is unable to predict if these funds will become available before their maturity dates.

The Company does not expect to need access to the capital represented by any of its auction-rate securities prior to their maturities. The Company does not intend to sell, and believes it is not more likely than not that it will be required to sell, its auction-rate securities before their anticipated recovery in market value or final settlement at the underlying par value. The Company believes that the credit ratings and credit support of the security issuers indicate that they have the ability to settle the securities at par value. As such, the Company has determined that no other-than-temporary impairment losses existed as of March 31, 2012.

The Company’s cash, cash equivalents and investments consist of the following (in thousands):

	March 31, 2012
	Cost		Gross Unrealized Losses			Gross Unrealized Gains		Fair Value
Cash and Cash Equivalents:
Cash on hand	$	43,251	$	—		$	—	$	43,251
Available-for-sale securities:
Money market funds	42,887		—			—		42,887
U.S. Treasury bills	11,899		—			1		11,900
Total available-for-sale securities	54,786		—			1		54,787
Total cash and cash equivalents	$	98,037	$	—		$	1	$	98,038
Short-term Investments:
Available-for-sale securities:
Corporate bonds	$	83,335	$	(43	)	$	307	$	83,599
Municipal bonds	67,251		(4		)	92		67,339
Variable-rate demand notes	48,310		—			—		48,310
U.S. government bonds	12,652		(13		)	—		12,639
Asset-backed securities	10,034		(1		)	9		10,042
U.S. government agency	5,901		—			1		5,902
U.S. Treasury bills	5,349		—			—		5,349
International government bonds	2,119		—			—		2,119
Total short-term investments	$	234,951	$	(61	)	$	409	$	235,299
Long-term Investments:
Available-for-sale securities:
Auction rate securities	$	19,175	$	(1,446	)	$	—	$	17,729
Total long-term investments	$	19,175	$	(1,446	)	$	—	$	17,729

	December 31, 2011
	Cost		Gross Unrealized Losses			Gross Unrealized Gains		Fair Value
Cash and Cash Equivalents:
Cash on hand	$	44,113	$	—		$	—	$	44,113
Available-for-sale securities:
Money market funds	50,851		—			—		50,851
Total cash and cash equivalents	$	94,964	$	—		$	—	$	94,964
Short-term Investments:
Available-for-sale securities:
Corporate bonds	$	75,189	$	(363	)	$	234	$	75,060
Municipal bonds	56,915		(12		)	81		56,984
Variable-rate demand notes	41,280		—			—		41,280
U.S. government agency	19,820		(12		)	28		19,836
U.S. Treasury bills	8,600		—			—		8,600
Asset-backed securities	5,743		(5		)	1		5,739
U.S. government bonds	2,507		—			—		2,507
Certificates of deposit	1,570		—			—		1,570
International government bonds	950		—			—		950
Total short-term investments	$	212,574	$	(392	)	$	344	$	212,526
Long-term Investments:
Available-for-sale securities:
Auction rate securities	$	19,225	$	(1,748	)	$	—	$	17,477
Total long-term investments	$	19,225	$	(1,748	)	$	—	$	17,477

The available-for-sale investments that were in a continuous unrealized loss position, aggregated by length of time that individual securities have been in a continuous loss position, were as follows (in thousands):

	Less Than 12 Months					12 Months or Greater					Total
As of March 31, 2012	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Corporate bonds	$	22,814	$	(43	)	$	—	$	—		$	22,814	$	(43	)
Auction rate securities	—		—			17,729		(1,446		)	17,729		(1,446		)
U.S. government bonds	12,639		(13		)	—		—			12,639		(13		)
Municipal bonds	10,367		(4		)	—		—			10,367		(4		)
Asset-backed securities	1,077		(1		)	—		—			1,077		(1		)
	$	46,897	$	(61	)	$	17,729	$	(1,446	)	$	64,626	$	(1,507	)

	Less Than 12 Months					12 Months or Greater					Total
As of December 31, 2011	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Corporate bonds	$	25,438	$	(363	)	$	—	$	—		$	25,438	$	(363	)
Auction rate securities	—		—			17,477		(1,748		)	17,477		(1,748		)
Municipal bonds	10,437		(12		)	—		—			10,437		(12		)
U.S. government agency	5,772		(12		)	—		—			5,772		(12		)
Asset-backed securities	4,539		(5		)	—		—			4,539		(5		)
	$	46,186	$	(392	)	$	17,477	$	(1,748	)	$	63,663	$	(2,140	)

The gross unrealized losses as of March 31, 2012 and December 31, 2011 were due primarily to the illiquidity of the Company’s auction-rate securities and, to a lesser extent, to changes in market interest rates.

The following summarizes the contractual underlying maturities of the Company’s available-for-sale investments at March 31, 2012 (in thousands):

	Cost		Fair Value
Due in one year or less	$	139,344	$	139,480
Due after one year through ten years	110,933		111,146
Due after ten years	58,635		57,189
	$	308,912	$	307,815