Note 5 - Marketable Securities

3 Months Ended

Mar. 31, 2012

Marketable Securities [Table Text Block]

5.      Marketable Securities

The Company’s investment policy focuses on three objectives:  to preserve capital, to meet liquidity requirements, and to maximize total return. The Company’s investment policy establishes minimum ratings for each classification of investments when purchased and investment concentration is limited to minimize risk. The policy also limits the final maturity on any investment and the overall duration of the portfolio. During the three-month period ended March 31, 2012, the Company’s Board of Directors executed a written consent permitting the Company to invest up to $10 million in publicly traded companies engaged in certain oilfield servicing, energy services, and related businesses, which is an exception to our investment policy. Additional exceptions to the investment policy may be approved in the future. Given the overall market conditions, the Company regularly reviews its investment portfolio to ensure adherence to its investment policy and to monitor individual investments for risk analysis and proper valuation.

The Company’s portfolio of marketable securities at March 31, 2012 was as follows:

	Cost			Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(in thousands)
Available-for-sale securities:
Short-term deposits	$	29,148		$	-	$	-		$	29,148
United States government securities		220,580			327		(29	)		220,878
Government agencies		3,503			11		-			3,514
Corporate obligations		1,506			3		-			1,509
Total available-for-sale securities		254,737			341		(29	)		255,049
Amounts classified as cash equivalents		(31,036	)		-		-			(31,036	)
Amounts classified as marketable securities	$	223,701		$	341	$	(29	)	$	224,013

The Company’s portfolio of marketable securities at December 31, 2011 was as follows:

	Cost			Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(in thousands)
Available-for-sale securities:
Short-term deposits	$	3,029		$	-	$	-		$	3,029
United States government securities		309,189			593		(3	)		309,779
Government agencies		3,505			21		-			3,526
Corporate obligations		1,513			8		-			1,521
Total available-for-sale securities		317,236			622		(3	)		317,855
Amounts classified as cash equivalents		(2,914	)		-		-			(2,914	)
Amounts classified as marketable securities	$	314,322		$	622	$	(3	)	$	314,941

Sales of marketable securities resulted in gross realized gains of $0.1 million and $0.5 million during the three-month periods ended March 31, 2012 and April 1, 2011, respectively. Sales of marketable securities resulted in gross realized losses of $0.1 million during the three-month period ended April 1, 2011. The gross realized losses for the three-month period ended March 31, 2012 was immaterial.

The following table summarizes the fair value and gross unrealized losses of the Company’s available-for-sale marketable securities, aggregated by type of investment instrument and length of time that individual securities have been in a continuous unrealized loss position, at March 31, 2012:

	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)
U.S. government securities	$	87,152	$	(30	)	$	-	$	-	$	87,152	$	(30	)

The following table summarizes the fair value and gross unrealized losses of the Company’s available-for-sale marketable securities, aggregated by type of investment instrument and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2011:

	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)
U.S. government securities	$	15,186	$	(3	)	$	-	$	-	$	15,186	$	(3	)

The Company’s investment portfolio consists of both corporate and government securities that generally mature within three years. The longer the duration of these securities, the more susceptible they are to changes in market interest rates and bond yields. As yields increase, those securities purchased with a lower yield-at-cost show a mark-to-market unrealized loss. All unrealized losses are due to changes in interest rates and bond yields. The Company has considered all available evidence and determined that the marketable securities in which unrealized losses were recorded in the three-month periods ended March 31, 2012 and April 1, 2011 were not deemed to be other-than-temporary. The Company holds its marketable securities as available-for-sale and marks them to market.

The amortized cost and estimated fair value of investments in available-for-sale securities as March 31, 2012 and December 31, 2011, by contractual maturity, were as follows:

	Cost		Estimated Fair Value
	(in thousands)
Mature in one year or less	$	215,969	$	216,051
Mature after one year through three years		38,767		38,997
Total	$	254,736	$	255,048