Investments

Marketable Securities

All of the Company's marketable securities at December 31, 2014 and 2013, were classified as "available-for-sale" securities, with changes in fair value recognized in stockholders' equity as "other comprehensive income (loss)". Marketable securities at December 31, 2014, consisted of the following:



	Cost			Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(in thousands)
Short-term deposits	$	42,681		$	—	$	—		$	42,681
Mutual funds	17,030			4,262		(322		)	20,970
Corporate securities	103,761			7,821		(23,732		)	87,850
Corporate obligations	32,486			592		(3,441		)	29,637
Total available-for-sale securities	195,958			12,675		(27,495		)	181,138
Amounts classified as cash equivalents	(42,681		)	—		—			(42,681		)
Amounts classified as marketable securities	$	153,277		$	12,675	$	(27,495	)	$	138,457

Marketable securities at December 31, 2013, consisted of the following:



	Cost			Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(in thousands)
Short-term deposits	$	60,909		$	—	$	—		$	60,909
Mutual funds	15,722			5,061		—			20,783
United States government securities	50,356			23		—			50,379
Corporate securities	69,806			9,961		(5,208		)	74,559
Corporate obligations	31,356			885		(276		)	31,965
Commercial paper	1,799			—		—			1,799
Total available-for-sale securities	229,948			15,930		(5,484		)	240,394
Amounts classified as cash equivalents	(61,909		)	—		—			(61,909		)
Amounts classified as marketable securities	$	168,039		$	15,930	$	(5,484	)	$	178,485

Proceeds from sales of marketable securities were $116.3 million, $75.8 million, and $574.1 million for the years ended December 31, 2014, 2013, and 2012, respectively. The company determines gains and losses from sales of marketable securities based on specific identification of the securities sold. Gross realized gains and losses from sales of marketable securities, all of which are reported as a component of "Other income (expense), net" in the consolidated statements of operations, were as follows:



	Year Ended December 31,
	2014			2013			2012
	(in thousands)
Gross realized gains	$	8,065		$	6,984		$	628
Gross realized losses	(4,300		)	(4,376		)	(346		)
Realized gains, net	$	3,765		$	2,608		$	282

The fair value of the Company’s marketable securities with unrealized losses at December 31, 2014, all of which had unrealized losses for periods of less than twelve months, were as follows:



	Fair Value		Gross Unrealized Losses
	(in thousands)
Corporate securities	$	39,869	$	(23,732	)
Corporate obligations	13,530		(3,441		)
Mutual funds	$	4,873	$	(322	)
Total	$	58,272	$	(27,495	)

The fair value of the Company’s marketable securities with unrealized losses at December 31, 2013, and the duration of time that such losses had been unrealized, were as follows:



	Less than 12 Months					12 Months or Greater					Total
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
	(in thousands)
Corporate securities	$	15,609	$	(4,757	)	$	803	$	(451	)	$	16,412	$	(5,208	)
Corporate obligations	10,477		(276		)	—		—			10,477		(276		)
Total	$	26,086	$	(5,033	)	$	803	$	(451	)	$	26,889	$	(5,484	)

Gross unrealized losses primarily related to losses on corporate securities. The Company has evaluated such securities, which primarily consist of investments in equity securities of publicly-traded entities, as of December 31, 2014, and has determined that there was no indication of other-than-temporary impairments. This determination was based on several factors, including the length of time and extent to which fair value has been less than the cost basis, the financial condition and near-term prospects of the entity, and the Company's intent and ability to hold the corporate securities for a period of time sufficient to allow for any anticipated recovery in market value.

The amortized cost and estimated fair value of available-for-sale debt securities and marketable securities with no contractual maturities at December 31, 2014, by contractual maturity, were as follows:



	Cost		Estimated Fair Value
	(in thousands)
Debt securities:
Mature in one year or less	$	212	$	186
Mature after one year through three years	—		—
Mature in more than three years	32,274		29,451
Total debt securities	32,486		29,637
Securities with no contractual maturities	163,472		151,501
Total	$	195,958	$	181,138

Financial Instrument Obligations

In 2014, the Company entered into short sale transactions on certain financial instruments in which the Company received proceeds from the sale of such financial instruments and incurred obligations to deliver or purchase securities at a later date. Upon initially entering into such short sale transactions the Company recognizes a liability equal to the fair value of the obligation, with a comparable amount of the Company's cash and cash equivalents reclassified as restricted cash. Subsequent changes in the fair value of such obligations, determined based on the closing market price of the financial instruments, are recognized currently as gains or losses, with a comparable reclassification made between the amounts of the Company's unrestricted and restricted cash. The Company's obligations for such transactions are reported as "Financial instrument obligations" with a comparable amount reported as "Restricted cash" in the Company's consolidated balance sheet. As of December 31, 2014, the Company's financial instrument obligations consisted of the following:



	Initial Obligation		Estimated Fair Value
	(in thousands)
Corporate securities	$	666	$	621
Market indices	18,685		20,451
Covered call options	7		4
Naked put options	109		235
Total	$	19,467	$	21,311

For the year ended December 31, 2014, the Company incurred losses on outstanding financial instrument obligations and settled transactions totaling $1.8 million, which are included as a component of "Other income (expense), net" in the Company's consolidated statements of operations.

Equity-Method Investments

In January 2013, the Company acquired a 40% membership interest in Again Faster LLC, a fitness equipment company, for total cash consideration of $4.0 million. The Company accounts for its investment in Again Faster under the equity method as the Company owns more than 20%, providing the Company with significant influence, but does not have a controlling financial interest or other control over the operations of Again Faster. The Company accounts for its investment in Again Faster using the traditional method of accounting for equity-method investments, with the Company recognizing its equity in the losses of Again Faster on a one-quarter lag basis.

On August 23, 2013, the Company acquired 1,316,866 shares of the common stock of iGo, Inc. (“iGo”), in a cash tender offer for total consideration of $5.2 million. The shares of common stock of iGo acquired by the Company represented approximately 44.7% of the issued and outstanding shares of iGo. In 2014, the Company's ownership interest in iGo increased to 46.9% as a result of iGo repurchasing shares of its common stock in connection with a reverse/forward split. Pursuant to the Stock Purchase and Sale Agreement between the Company and iGo entered into on July 11, 2013, two members of iGo’s four-member board of directors were replaced by two designees of the Company. The Company accounts for its investment in iGo under the equity method as the Company’s voting interest and board representation provide it with significant influence, but do not provide the Company with control over iGo’s operations. The Company accounts for its investment in iGo using the traditional method of accounting for equity-method investments, with the Company recognizing its equity in the losses of iGo on a one-quarter lag basis.

In May 2014, the Company increased its holdings of the common stock of API Technologies Corp. (“API”), a designer and manufacturer of high performance systems, subsystems, modules, and components, to 11,377,192 shares through the acquisition of 1,666,666 shares on the open market. Upon acquiring such shares, the Company held approximately 20.6% of the total outstanding common stock of API. Effective as of that date, the investment in API has been accounted for as an equity-method investment using the fair value option, with changes in fair value based on the market price of API's common stock recognized currently as income or loss from equity method investees. The Company elected the fair value option to account for its investment in API in order to more appropriately reflect the value of API in its financial statements. Prior to such time, the investment in API was accounted for as an available-for-sale security, and upon the change in classification the Company recognized a loss of approximately $0.6 million that had previously been included as a component of "accumulated other comprehensive income".

The following table summarizes the Company's equity-method investments.



	Ownership				Carrying Value				Income (Loss) Recognized
	December 31,				December 31,				Fiscal Year Ended December 31,
	2014		2013		2014		2013		2014			2013
					(in thousands)
Traditional equity method
Again Faster	40.0	%	40.0	%	3,105		3,671		(566		)	(329		)
iGo	46.9	%	44.7	%	2,600		4,668		(2,068		)	(533		)

Fair value option
API	20.6	%			24,355		—		(3,436		)	—
Total					$	30,060	$	8,339	$	(6,070	)	$	(862	)

Based on the closing market price of iGo's publicly-traded shares, the value of the Company's investment in iGo was approximately $3.4 million at December 31, 2014.

The following table presents summarized financial statement information for the Company's equity-method investees as of and for the year ended December 31, 2014. The summarized balance sheet information is as of the most recent practicable date for equity-method investments accounted for using the fair value option and as of the date through which Company has recognized its equity in the income of the investee for equity-method investments accounted for using the traditional method. The summarized balance sheet and income statement information is included for the periods during which such investments were accounted for as equity-method investments.



	Amount
	(in thousands)
Current assets	$	115,532
Non-current assets	$	179,161
Current liabilities	$	42,200
Non-current liabilities	$	132,681
Revenues	$	131,290
Gross profit	$	29,841
Net loss	$	(8,046	)

In January 2015, two members of the Company's board of directors were appointed to the board of directors of Aviat Networks, Inc. ("Aviat"), a global provider of microwave networking solutions. At the time of the appointment, the Company held 8,041,892 shares of Aviat, or approximately 12.9% of the total outstanding common stock of Aviat. Effective as of the date of the appointment, the Company will account for its investment in Aviat under the equity method as the Company’s voting interest and board representation will provide it with significant influence over Aviat's operations. As of December 31, 2014, the Company's investment in Aviat was accounted for as an available-for-sale security. Upon the change in classification of its investment in Aviat in January 2015 the Company expects to recognize a loss of approximately $2.8 million.

Other Investments

The Company's other investments at December 31, 2014, include a $25.0 million cost-method investment in a limited partnership that co-invested with other private investment funds in a public company. The investment in the limited partnership had an approximate fair value of $28.6 million at December 31, 2014, based on the net asset value indicated in the monthly statement received from the partnership. The Company's other investments at December 31, 2014, also include investments in a venture capital fund totaling $0.5 million and a promissory note with an amortized cost of $3.0 million, which approximates fair value at December 31, 2014.