Investments

Short-term investments consist generally of corporate and governmental debt securities and certificates of deposits, which are stated at fair market value. Realized gains and losses of short and long-term investments are recorded using the specific identification method.

The following table summarizes j2 Global’s debt securities designated as available-for-sale, classified by the contractual maturity date of the security (in thousands):



	September 30, 2014		December 31, 2013
Due within 1 year	$	81,410	$	46,339
Due within more than 1 year but less than 5 years	58,955		44,865
Due within more than 5 years but less than 10 years	—		—
Due 10 years or after	2,459		2,486
Total	$	142,824	$	93,690

The following table summarizes the Company’s investments designated as available-for-sale (in thousands):



	September 30, 2014		December 31, 2013
Available-for-sale	$	168,833	$	123,737
Total	$	168,833	$	123,737

The following table summarizes the gross unrealized gains and losses and fair values for the Company's available-for-sale investments as of September 30, 2014 and December 31, 2013 aggregated by major security type (in thousands):



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
September 30, 2014
Debt Securities	$	142,730	$	188	$	(94	)	$	142,824
Equity Securities	20,610		5,631		(232		)	26,009
Total	$	163,340	$	5,819	$	(326	)	$	168,833
December 31, 2013
Debt Securities	$	93,569	$	158	$	(37	)	$	93,690
Equity Securities	20,610		9,558		(121		)	30,047
Total	$	114,179	$	9,716	$	(158	)	$	123,737

At September 30, 2014, corporate and governmental debt securities, which have a fixed interest rate, were recorded as available-for-sale. There have been no significant changes in the maturity dates and average interest rates for the Company’s investment portfolio and debt obligations subsequent to September 30, 2014. At September 30, 2014, equity securities were recorded as available-for-sale and represent a strategic equity investment. At September 30, 2014, the Company’s available-for-sale securities are carried at fair value, with the unrealized gains and losses reported as a component of stockholders’ equity.

Investments in an unrealized loss position as of September 30, 2014 and December 31, 2013, but in a continuous unrealized loss position for less than 12 months had a fair value of $78.8 million and $37.3 million, respectively. Investments in a continuous unrealized loss position for 12 months and longer as of September 30, 2014 and December 31, 2013 had a fair value of $0.2 million and $2.0 million, respectively, of which loss positions are determined to be temporary in nature.

Recognition and Measurement of Other-Than-Temporary Impairment

j2 Global regularly reviews and evaluates each investment that has an unrealized loss. An unrealized loss exists when the current fair value of an individual security is less than its amortized cost basis. Unrealized losses that are determined to be temporary in nature are recorded, net of tax, in accumulated other comprehensive income for available-for-sale securities.

Regardless of the classification of the securities, the Company has assessed each position for impairment.

Factors considered in determining whether a loss is temporary include:


•	the length of time and the extent to which fair value has been below cost;


•	the severity of the impairment;


•	the cause of the impairment and the financial condition and near-term prospects of the issuer;


•	activity in the market of the issuer which may indicate adverse credit conditions; and


•	the Company’s ability and intent to hold the investment for a period of time sufficient to allow for any anticipated recovery.

j2 Global’s review for impairment generally entails:


•	identification and evaluation of investments that have indications of possible impairment;


•	analysis of individual investments that have fair values less than amortized cost, including consideration of the length of time the investment has been in an unrealized loss position and the expected recovery period;


•	discussion of evidential matter, including an evaluation of factors or triggers that could cause individual investments to qualify as having an other-than-temporary impairment and those that would not support an other-than-temporary impairment;


•	documentation of the results of these analyses, as required under business policies; and


•	information provided by third-party valuation experts.

For these securities, a critical component of the evaluation for other-than-temporary impairments is the identification of credit impairment, where management does not expect to receive cash flows sufficient to recover the entire amortized cost basis of the security. Credit impairment is assessed using a combination of a discounted cash flow model that estimates the cash flows on the underlying securities and a market comparables method, where the security is valued based upon indications from the secondary market of what discounts buyers demand when purchasing similar securities. The cash flow model incorporates actual cash flows from the securities through the current period and then projects the remaining cash flows using relevant interest rate curves over the remaining term. These cash flows are discounted using a number of assumptions, some of which include prevailing implied credit risk premiums, incremental credit spreads and illiquidity risk premiums, among others.

Securities that have been identified as other-than-temporarily impaired are written down to their current fair value. For debt securities that are intended to be sold or that management believes it more-likely-than-not that will be required to sell prior to recovery, the full impairment is recognized immediately in earnings.

For available-for-sale securities that management has no intent to sell and believes that it more-likely-than-not will not be required to sell prior to recovery, only the credit loss component of the impairment is recognized in earnings, while the rest of the fair value impairment is recognized in other comprehensive income. The credit loss component recognized in earnings is identified as the amount of principal cash flows not expected to be received over the remaining term of the security.