LONG-TERM INVESTMENTS

Long-term investments consist of the following investments accounted for at cost:



	December 31, 2012				December 31, 2011
	Carrying Value		Fair Value		Carrying Value		Fair Value
Investment partnerships	$	15,540	$	16,962	$	4,776	$	6,199
Real estate partnership	827		1,391		899		1,293
	$	16,367	$	18,353	$	5,675	$	7,492

The principal business of these investment partnerships is investing in investment securities and real estate. The estimated fair value of the investment partnerships was provided by the partnerships based on the indicated market values of the underlying assets or investment portfolio. The investments in these investment partnerships are illiquid and the ultimate realization of these investments is subject to the performance of the underlying partnership and its management by the general partners. In the future, the Company may invest in other investments, including limited partnerships, real estate investments, equity securities, debt securities, derivatives and certificates of deposit, depending on risk factors and potential rates of return.

If it is determined that an other-than-temporary decline in fair value exists in long-term investments, the Company records an impairment charge with respect to such investment in its consolidated statements of operations. The Company will continue to perform additional assessments to determine the impact, if any, on the Company’s consolidated financial statements. Thus, future impairment charges may occur.

The Company’s investments constituted greater than 5% of the invested funds of the partnerships for one partnership at December 31, 2012 and two partnerships at December 31, 2011. These partnerships were accounted for on the equity method. In accordance with authoritative guidance for accounting for limited partnership investments, the Company has accounted for the remaining investments using the cost method of accounting.

The Company had invested $50,000 in Icahn Partners, LP, a privately managed investment partnership, of which Carl Icahn was the portfolio manager and the controlling person of the general partner, and manager of the partnership. In 2011, Icahn Partners, LP was liquidated. The Company received liquidating distributions of $55,500 in 2011 and recognized a gain of $20,500 on this investment for the year ended December 31, 2011. Based on information available in public filings, affiliates of Mr. Icahn were the beneficial owners of more than 5% of Vector’s common stock prior to November 2011, but had no interest in Vector's common stock as of December 31, 2011.

The Company received cash distributions of $207, $608 and $1,002 from one limited partnership in 2012, 2011 and 2010, respectively.

Another of the Company’s long-term investments was liquidated in 2011. The Company received liquidating distributions of $10,082 in 2011 and recognized a gain of $5,332 for the year ended December 31, 2011.

The long-term investments are carried on the consolidated balance sheet at cost. The fair value determination disclosed above would be classified as Level 3 under fair value hierarchy disclosed in Note 15 if such assets were recorded on the consolidated balance sheet at fair value. The fair values were determined based on unobservable inputs and were based on company assumptions, and information obtained from the partnerships based on the indicated market values of the underlying assets of the investment portfolio.

The changes in the fair value of these investments were as follows:



	2012			2011
Balance as of January 1	$	7,492		$	72,102
Distributions	(207		)	(66,190		)
Reduction in partnership interest now accounted for under the cost method	15,541			—
Revision for partnership now accounted for as investment securities available for sale	(6,122		)	—
Realized gain on liquidation of long-term investments	135			25,832

Unrealized gains reclassified into net income	(135		)	(25,832		)
Unrealized gain on long-term investments	1,649			1,580
Net change in long-term investments	1,514			(24,252		)
Balance as of December 31	$	18,353		$	7,492

Long-term investments consist of the following investments accounted for under the equity method:



	December 31, 2012		December 31, 2011
Investment partnerships	$	6,432	$	16,499

The changes in the fair value of these investments were as follows:



	2012			2011
Balance as of January 1	$	16,499		$	10,954
Contributions	5,000			10,000
Reduction in partnership interest now accounted for under the cost method	(15,541		)	—
Equity loss on long-term investments accounted for under the equity method	(1,261		)	(859		)

Unrealized gains reclassified into net income	—			—
Unrealized (loss) gain on long-term investments	1,735			(3,596		)
Net change in long-term investments	1,735			(3,596		)
Balance as of December 31	$	6,432		$	16,499

The principal business of these investment partnerships is investing in investment securities. The estimated fair value of the investment partnerships was provided by the partnerships based on the indicated market values of the underlying assets or investment portfolio. The investments in these investment partnerships are illiquid and the ultimate realization of these investments is subject to the performance of the underlying partnership and its management by the general partners. In the future, the Company may invest in other investments, including limited partnerships, real estate investments, equity securities, debt securities, derivatives and certificates of deposit, depending on risk factors and potential rates of return.