6. INVESTMENTS

Investments of our continuing operations consist of the following as of December 31, 2015 and 2014 (dollars in thousands):

	December 31, 2015
			Gross Unrealized
	Cost		Gain		(Loss)			Fair Value
Short-term investments (available for sale):
Municipal bonds	$	1,500	$	-	$	(11	)	$	1,489
Non-governmental debt securities		76,999		-		(242	)		76,757
Treasury and federal agencies		36,779		3		(127	)		36,655
Total short-term investments		115,278		3		(380	)		114,901
Long-term investments (available for sale):
Municipal bond		7,850		-		(476	)		7,374
Total investments (available for sale)	$	123,128	$	3	$	(856	)	$	122,275

	December 31, 2014
			Gross Unrealized
	Cost		Gain		(Loss)			Fair Value
Short-term investments (available for sale):
Municipal bonds	$	6,880	$	1	$	(56	)	$	6,825
Non-governmental debt securities		98,400		1		(271	)		98,130
Treasury and federal agencies		17,928		6		(31	)		17,903
Total short-term investments		123,208		8		(358	)		122,858
Long-term investments (available for sale):
Municipal bond		7,850		-		(476	)		7,374
Total investments (available for sale)	$	131,058	$	8	$	(834	)	$	130,232

In the table above, unrealized holding losses as of December 31, 2015 relate to short-term investments that have been in a continuous unrealized loss position for less than one year. The table also includes an unrealized holding loss, greater than one year, which relates to our long-term investment in a municipal bond, which is an auction rate security (“ARS”).

Our ARS is comprised of debt obligations issued by states, cities, counties and other governmental entities, which earn federally tax-exempt interest. Our ARS has a stated term to maturity of greater than one year, and as such, we classify our investment in ARS as non-current on our consolidated balance sheets within other assets. Auctions can “fail” when the number of sellers of the security exceeds the buyers for that particular auction period. In the event that an auction fails, the interest rate resets at a rate based on a formula determined by the individual security. The ARS for which auctions have failed continues to accrue interest and is auctioned on a set interval until the auction succeeds, the issuer calls the security, or it matures. As of December 31, 2015, we have determined this investment is at risk for impairment due to the nature of the liquidity of the market over the past several years. Cumulative unrealized losses as of December 31, 2015 amount to $0.5 million and are reflected within accumulated other comprehensive loss as a component of stockholders’ equity. We believe this impairment is temporary, as we do not intend to sell the investment and it is unlikely we will be required to sell the investment before recovery of its amortized cost basis.

Our non-governmental debt securities primarily consist of corporate bonds and commercial paper. Our treasury and federal agencies primarily consist of U.S. Treasury bills and federal home loan debt securities. We do not intend to sell our investments in these securities and it is not likely that we will be required to sell these investments before recovery of the amortized cost basis.

A schedule of available-for-sale investments segregated by their original stated terms to maturity as of December 31, 2015 and 2014 are as follows (dollars in thousands):

Less than

one year

One to

five years

Five to

ten years

Greater

than ten

years

Total

Original stated term to maturity of available-for-sale-

investments as of December 31, 2015

71,000

43,552

7,723

122,275

Original stated term to maturity of available-for-sale-

investments as of December 31, 2014

77,177

44,182

211

8,662

130,232

Realized gains or losses resulting from sales of investments during the years ended December 31, 2015, 2014 and 2013 were not significant.

Fair Value Measurements

FASB ASC Topic 820 – Fair Value Measurements establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

As of December 31, 2015, we held investments that are required to be measured at fair value on a recurring basis. These investments (available-for-sale) consist of non-governmental debt securities, treasury and federal agencies and municipal bonds that are publicly traded and our investment in an ARS. Available for sale securities included in Level 2 are estimated based on observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Our investment in an ARS is categorized as Level 3 and fair value is estimated utilizing a discounted cash flow analysis as of December 31, 2015 which considers, among other items, the collateralization underlying the security investment, the credit worthiness of the counterparty, the time of expected future cash flows, and the expectation of the next time the security is expected to have a successful auction. The auction event for our ARS investment has failed for multiple years. The security was also compared, when possible, to other observable market data with similar characteristics.

Investments measured at fair value on a recurring basis subject to the disclosure requirements of FASB ASC Topic 820 – Fair Value Measurements at December 31, 2015 and 2014 were as follows (dollars in thousands):

	As of December 31, 2015
	Level 1		Level 2		Level 3		Total
Municipal bonds	$	-	$	1,489	$	7,374	$	8,863
Non-governmental debt securities		-		76,757		-		76,757
Treasury and federal agencies		-		36,655		-		36,655
Totals	$	-	$	114,901	$	7,374	$	122,275

	As of December 31, 2014
	Level 1		Level 2		Level 3		Total
Municipal bonds	$	-	$	6,825	$	7,374	$	14,199
Non-governmental debt securities		-		98,130		-	$	98,130
Treasury and federal agencies		-		17,903		-		17,903
Totals	$	-	$	122,858	$	7,374	$	130,232

The following table presents a rollforward of our assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as defined in FASB ASC Topic 820 for the year ended December 31, 2015 (dollars in thousands):

Balance at December 31, 2014	$	7,374
Unrealized loss		-
Balance at December 31, 2015	$	7,374

See Note 8 “Property and Equipment” and Note 10 “Goodwill and Other Intangible Assets” for further information regarding non-recurring fair value measurements.

Equity Method Investment

Our investment in an equity affiliate, which is recorded within other noncurrent assets on our consolidated balance sheet, represents an international investment in a private company. As of December 31, 2015, our investment in an equity affiliate equated to a 30.7%, or $3.9 million, non-controlling interest in CCKF, a Dublin-based educational technology company providing intelligent adaptive systems to power the delivery of individualized and personalized learning. For the years ended December 31, 2015 and 2014, we recorded approximately $0.3 million of loss and less than $0.1 million of income, respectively, related to our proportionate investment in CCKF within miscellaneous (expense) income on our consolidated statements of income (loss) and comprehensive income (loss).