Note 5 - Marketable Securities

6 Months Ended

Jun. 30, 2012

Marketable Securities [Table Text Block]

5.     Marketable Securities

The Company’s investment policy has historically focused on three objectives:  to preserve capital, to meet liquidity requirements, and to maximize total return. The Company’s investment policy established minimum ratings for each classification of investments when purchased and investment concentration is limited to minimize risk. The policy also limited the final maturity on any investment and the overall duration of the portfolio. During February 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 the Company’s investment policy.

In June 2012, the Board established an Investment Committee, which was formed to develop investment strategies and set the Company’s investment policies with respect to the Company’s cash. The Investment Committee is authorized, among other things, to invest the Company’s excess cash directly or allocate investments to outside managers for investment in equity or debt securities, provided that the Investment Committee may not invest more than $25 million in any single investment or with any single asset manager without the Board’s approval. 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 June 30, 2012 was as follows:

	Cost			Gross Unrealized Gains			Gross Unrealized Losses			Estimated Fair Value
	(in thousands)
Available-for-sale securities:
Short-term deposits	$	44,592		$	-		$	-		$	44,592
Mutual funds		10,000			135			-			10,135
United States government securities		117,794			253			(7	)		118,040
Government agencies		2,501			3			-			2,504
Corporate securities		4,720			43			(208	)		4,555
Commercial paper		35,805			21			-			35,826
Corporate obligations		33,842			9			(12	)		33,839
Total available-for-sale securities		249,254			464			(227	)		249,491
Amounts classified as cash equivalents		(61,284	)		(1	)		1			(61,284	)
Amounts classified as marketable securities	$	187,970		$	463		$	(226	)	$	188,207

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 during the six-month period ended June 30, 2012 and $1.5 million and $2.0 million during the three-month and six-month periods ended July 1, 2011, respectively. The gross realized gains for the three-month period ended June 30, 2012 were immaterial. Sales of marketable securities resulted in gross realized losses of $0.2 million and $0.3 million during the three-month and six-month periods ended July 1, 2011, respectively. The gross realized losses for the three-month and six-month periods ended June 30, 2012 were 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 June 30, 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	$	64,129	$	(7	)	$	-	$	-	$	64,129	$	(7	)
Corporate securities		3,631		(208	)		-		-		3,631		(208	)
Corporate obligations		18,461		(13	)		-		-		18,461		(13	)
Total	$	86,221	$	(228	)	$	-	$	-	$	86,221	$	(228	)

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 and six-month periods ended June 30, 2012 and July 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 of June 30, 2012 and December 31, 2011, by contractual maturity, were as follows:

	June 30, 2012				December 31, 2011
	Cost		Estimated Fair Value		Cost		Estimated Fair Value
	(in thousands)
Mature in one year or less	$	229,591	$	229,664	$	256,764	$	257,050
Mature after one year through three years		19,645		19,809		60,473		60,805
Total	$	249,236	$	249,473	$	317,237	$	317,855