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Investments and Fair Value Measurements
6 Months Ended
Jun. 30, 2012
Fair Value Disclosures [Abstract]  
Investments and Fair Value Measurements
Investments and Fair Value Measurements
 
We account for our investments in accordance with FASB ASC 320, Investments—Debt and Equity Securities. We classify our investments in three categories: available-for-sale, held-to-maturity, and trading. We monitor the concentration, diversification, maturity, and liquidity of our investment portfolio, which is primarily invested in fixed-income securities, and classify our investment portfolio as shown below:
 
 
 
As of June 30
 
As of December 31
($000)
 
2012

 
2011

Available-for-sale
 
$
217,478

 
$
247,917

Held-to-maturity
 
19,717

 
16,347

Trading securities
 
5,184

 
5,491

Total
 
$
242,379

 
$
269,755




The following table shows the cost, unrealized gains (losses), and fair values related to investments classified as available-for-sale and held-to-maturity:
 
 
 
As of June 30, 2012
 
As of December 31, 2011
($000)
 
Cost

 
Unrealized
Gain

 
Unrealized
Loss

 
Fair
Value

 
Cost

 
Unrealized
Gain

 
Unrealized
Loss

 
Fair
Value

Available-for-sale:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Government obligations
 
$
82,317

 
$
53

 
$
(571
)
 
$
81,799

 
$
139,099

 
$
72

 
$
(402
)
 
$
138,769

Corporate bonds
 
78,476

 
38

 
(351
)
 
78,163

 
61,589

 
14

 
(280
)
 
61,323

Commercial paper
 
17,138

 
1

 
(3
)
 
17,136

 
29,964

 
2

 
(7
)
 
29,959

Equity securities and exchange-traded funds
 
29,080

 
827

 
(421
)
 
29,486

 
8,461

 
368

 
(558
)
 
8,271

Mutual funds
 
10,355

 
623

 
(84
)
 
10,894

 
9,298

 
363

 
(66
)
 
9,595

Total
 
$
217,366

 
$
1,542

 
$
(1,430
)
 
$
217,478

 
$
248,411

 
$
819

 
$
(1,313
)
 
$
247,917

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Held-to-maturity:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Certificates of deposit
 
$
19,717

 
$

 
$

 
$
19,717

 
$
16,347

 
$

 
$

 
$
16,347


 
As of June 30, 2012 and December 31, 2011, investments with unrealized losses for greater than a 12-month period were not material to the Condensed Consolidated Balance Sheets and were not deemed to have other than temporary declines in value.

The table below shows the cost and fair value of investments classified as available-for-sale and held-to-maturity based on their contractual maturities as of June 30, 2012 and December 31, 2011. The expected maturities of certain fixed-income securities may differ from their contractual maturities because some of these holdings have call features that allow the issuers the right to prepay obligations without penalties.
 
 
 
As of June 30, 2012
 
As of December 31, 2011
($000)
 
Cost

 
Fair Value

 
Cost

 
Fair Value

Available-for-sale:
 
 

 
 

 
 

 
 

Due in one year or less
 
$
141,562

 
$
140,928

 
$
155,651

 
$
155,247

Due in one to two years
 
36,369

 
36,170

 
75,001

 
74,804

Equity securities, exchange-traded funds, and mutual funds
 
39,435

 
40,380

 
17,759

 
17,866

Total
 
$
217,366

 
$
217,478

 
$
248,411

 
$
247,917

 
 
 
 
 
 
 
 
 
Held-to-maturity:
 
 

 
 

 
 

 
 

Due in one year or less
 
$
19,712

 
$
19,712

 
$
16,342

 
$
16,342

Due in one to three years
 
5

 
5

 
5

 
5

Total
 
$
19,717

 
$
19,717

 
$
16,347

 
$
16,347


 
As of June 30, 2012 and December 31, 2011, held-to-maturity investments included a $1,500,000 and a $1,600,000 certificate of deposit, respectively, held primarily as collateral against a bank guarantee for our office lease in Australia.

The following table shows the realized gains and losses arising from sales of our investments classified as available-for-sale recorded in our Condensed Consolidated Statements of Income: 
 
 
Six months ended June 30
($000)
 
2012

 
2011

Realized gains
 
$
470

 
$
397

Realized losses
 
(519
)
 

Realized gains (losses), net
 
$
(49
)
 
$
397


 
We determine realized gains and losses using the specific identification method.

The following table shows the net unrealized gains (losses) on trading securities as recorded in our Condensed Consolidated Statements of Income:
 
 
 
Six months ended June 30
($000)
 
2012

 
2011

Unrealized gains (losses), net
 
$
156

 
$
(9
)


The fair value of our assets subject to fair value measurements and that are measured at fair value on a recurring basis using the fair value hierarchy and the necessary disclosures under FASB ASC 820, Fair Value Measurement, are as follows:
 
 
 
Fair Value
 
Fair Value Measurements as of June 30, 2012
 
 
as of
 
Using Fair Value Hierarchy
($000)
 
June 30, 2012
 
Level 1

 
Level 2

 
Level 3

Available-for-sale investments:
 
 

 
 

 
 

 
 

Government obligations
 
$
81,799

 
$

 
$
81,799

 
$

Corporate bonds
 
78,163

 

 
78,163

 

Commercial paper
 
17,136

 

 
17,136

 

Equity securities and exchange-traded funds
 
29,486

 
29,486

 

 

Mutual funds
 
10,894

 
10,894

 

 

Trading securities
 
5,184

 
5,184

 

 

Cash equivalents
 
9,485

 
9,485

 

 

Total
 
$
232,147

 
$
55,049

 
$
177,098

 
$

 
 
 
Fair Value
 
Fair Value Measurements as of December 31, 2011
 
 
as of
 
Using Fair Value Hierarchy
($000)
 
December 31, 2011
 
Level 1

 
Level 2

 
Level 3

Available-for-sale investments:
 
 

 
 

 
 

 
 

Government obligations
 
$
138,769

 
$

 
$
138,769

 
$

Corporate bonds
 
61,323

 

 
61,323

 

Commercial paper
 
29,959

 

 
29,959

 

Equity securities and exchange-traded funds
 
8,271

 
8,271

 

 

Mutual funds
 
9,595

 
9,595

 

 

Trading securities
 
5,491

 
5,491

 

 

Cash equivalents
 
30,818

 
30,818

 

 

Total
 
$
284,226

 
$
54,175

 
$
230,051

 
$


 
Level 1:
Valuations based on quoted prices in active markets for identical assets or liabilities that we have the ability to access.
Level 2:
Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.
Level 3:
Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

Based on our analysis of the nature and risks of our investments in equity securities and mutual funds, we have determined that presenting each of these investment categories in the aggregate is appropriate.

We measure the fair value of money market funds, mutual funds, equity securities, and exchange-traded funds based on quoted prices in active markets for identical assets or liabilities. All other financial instruments were valued either based on recent trades of securities in inactive markets or based on quoted market prices of similar instruments and other significant inputs derived from observable market data. We did not hold any securities categorized as Level 3 as of June 30, 2012 and December 31, 2011.