Fair Value Measurements

12 Months Ended

Dec. 31, 2014

Items Measured at Fair Value on a Recurring Basis

The following tables present information about our financial assets that have been measured at fair value on a recurring basis as of December 31, 2014 and 2013, and indicates the fair value hierarchy of the valuation inputs utilized to determine fair value (in thousands).



	Fair Value Measurements as of								Amortized Cost as of
	December 31, 2014								December 31, 2014
	Level 1		Level 2		Level 3		Total
Cash and cash equivalents:
Cash	$	30,105	$	—	$	—	$	30,105	$	30,105
Money market funds	11,629		—		—		11,629		11,630
Corporate notes and bonds	—		61,519		—		61,519		61,520
Total cash and cash equivalents	41,734		61,519		—		103,253		103,255
Short-term investments:
Corporate notes and bonds	—		51,453		—		51,453		51,438
U.S. government agency securities	7,000		—		—		7,000		7,000
Total short-term investments	7,000		51,453		—		58,453		58,438
Restricted cash equivalents and investments	—		3,000		—		3,000		3,000
Equity investments in publicly traded securities	2,676		—		—		2,676		428
Total	$	51,410	$	115,972	$	—	$	167,382	$	165,121



	Fair Value Measurements as of								Amortized Cost as of
	December 31, 2013								December 31, 2013
	Level 1		Level 2		Level 3		Total
Cash and cash equivalents:
Cash	$	46,978	$	—	$	—	$	46,978	$	46,978
Money market funds	1		26,913		—		26,914		26,914
Corporate notes and bonds	—		77,043		—		77,043		77,044
U.S. government agency securities	—		300		—		300		300
Total cash and cash equivalents	46,979		104,256		—		151,235		151,236
Short-term investments:
Corporate notes and bonds	—		59,766		—		59,766		59,713
U.S. government agency securities	14,077		1,077		—		15,154		15,159
Total short-term investments	14,077		60,843		—		74,920		74,872
Restricted cash equivalents and investments	—		3,000		—		3,000		3,000
Equity investments in publicly traded securities	7,181		—		—		7,181		842
Total	$	68,237	$	168,099	$	—	$	236,336	$	229,950

Restricted cash equivalents and investments as of December 31, 2014 and 2013 relate to cash pledged as collateral against a letter of credit in connection with a lease agreement.

Realized gains or losses on sales of short-term investment securities for 2014, 2013, and 2012 were not significant. Gross unrealized gains and gross unrealized losses on short-term investment securities as of December 31, 2014 and 2013 were not significant.

Investments with remaining contractual maturities of five years or less are classified as short-term because the investments are marketable and highly liquid, and we have the ability to utilize them for current operations. Contractual maturities of short-term investments as of December 31, 2014 are as follows (in thousands):



	Estimated Fair Value
Within one year	$	46,336
Between one year and five years	12,117
Total short-term investments	$	58,453

Our equity investment in a publicly traded company as of December 31, 2014 and 2013 consisted of J-Stream Inc., a Japanese media services company. This equity investment is accounted for as available for sale. In 2014, we sold a portion of the J-Stream shares we held, resulting in cash proceeds of $2.8 million and a pre-tax gain of $2.4 million, reported in Other income (expense), net, in the consolidated statement of operations.

In 2013 and 2012 we sold shares of common stock in LoEn Entertainment, Inc., a Korean digital music distribution company. The 2013 sales resulted in cash proceeds of $29.2 million, net of transaction costs, and a total pre-tax gain of $21.4 million. The 2012 sales resulted in net cash proceeds of $6.4 million and a total pre-tax gain of $4.3 million.

Items Measured at Fair Value on a Non-recurring Basis

Certain of our assets and liabilities are measured at estimated fair value on a non-recurring basis, using Level 3 inputs. These instruments are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment).

See Note 11, Lease Exit and Related Charges, for a discussion of the losses related to reductions in the use of RealNetworks' office space.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References+ Details