Note 6 - Marketable Securities

12 Months Ended

Dec. 31, 2012

Marketable Securities [Table Text Block]

Note 6.    Marketable Securities

During February 2012, the Company’s Board of Directors executed a written consent permitting it to invest up to $10 million in publicly traded companies engaged in certain oilfield servicing, energy services, and related businesses, which was an exception to its investment policy at that time. In June 2012, the Board established an Investment Committee, which was formed to develop investment strategies for the Company and to set and implement investment policies with respect to its cash. The Investment Committee was directed by the Board to establish and implement an investment policy for the Company’s portfolio that meets the following general objectives: preserve principal; maximize total return given overall market conditions; meet internal liquidity requirements; and comply with applicable accounting, internal control and reporting requirements and standards. The Investment Committee is authorized, among other things, to invest its 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 the investment policy and to monitor individual investments for risk analysis and proper valuation.

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

	Cost			Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(in thousands)
Available-for-sale securities:
Short-term deposits	$	48,596		$	-	$	-		$	48,596
Mutual funds		10,368			1,452		-			11,820
United States government securities		99,299			178		-			99,477
Corporate securities		20,842			1,255		(1,980	)		20,117
Corporate obligations		48,708			283		(277	)		48,714
Commerical paper		22,275			16		-			22,291
Total available-for-sale securities		250,088			3,184		(2,257	)		251,015
Amounts classified as cash equivalents		(51,887	)		-		-			(51,887	)
Amounts classified as marketable securities	$	198,201		$	3,184	$	(2,257	)	$	199,128

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 $0.6 million, $2.0 million, and $1.1 million for fiscal 2012 and 2011, and the Transition Period, respectively. Sales of marketable securities resulted in gross realized losses of $0.3 million, $0.3 million, $0.5 million for fiscal 2012 and 2011, and the Transition Period, respectively.

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 maturity for individual securities that were in an unrealized loss position at December 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	$	88,420	$	-		$	11,056	$	-		$	99,476	$	-
Corporate oligations		24,346		(2	)		24,370		(272	)		48,716		(274	)
Total	$	112,766	$	(2	)	$	35,426	$	(272	)	$	148,192	$	(274	)

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 maturity for individual securities that were in an 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 Transition Period and fiscal years 2012 and 2011 were deemed to be temporary. The Company holds its marketable securities as available-for-sale and marks them to market through a corresponding adjustment to other comprehensive income (loss) in stockholders’ equity. Classification of marketable securities as a current asset is based on the intended holding period and realizability of the asset.

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

	Cost		Estimated Fair Value
	(in thousands)
Mature in one year or less	$	214,784	$	215,589
Mature after one year through three years		19,550		19,854
Mature in more than three years		15,753		15,572
Total	$	250,087	$	251,015