INVESTMENTS

At December 31, the cost and carrying value of its available-for-sale investments were as follows (in thousands):



2012:	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Carrying Value
Debt securities:
Corporate bonds	$	7,758	$	324	$	(56	)	$	8,026
Marketable equity securities	33,847		7,212		(621		)	40,438
Total	$	41,605	$	7,536	$	(677	)	$	48,464



2011:	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Carrying Value
Debt securities:
U.S. Treasury securities	$	831						$	831
Corporate bonds	13,871		$	559	$	(56	)	14,374
	14,702		559		(56		)	15,205
Marketable equity securities	26,575		2,440		(1,114		)	27,901
Total	$	41,277	$	2,999	$	(1,170	)	$	43,106

The amortized cost and carrying value of investments in debt securities at December 31, 2012, by contractual maturity, are shown below. Expected maturity dates may differ from contractual maturity dates because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties (in thousands):



	Amortized Cost		Carrying Value
Due in one year or less	$	3,963	$	4,077
Due after one year through five years	3,316		3,476
Due after five years	479		473
	$	7,758	$	8,026

Included in other income in the accompanying consolidated financial statements is the pre-tax net realized gain or loss on investments for each of the years ended December 31 (in thousands):



	2012			2011			2010
Gross realized gains:
Debt securities	$	845		$	213		$	3,632
Equity securities and other investments	1,173			4,656			6,501
Total gain	2,018			4,869			10,133
Gross realized losses:
Debt securities	(2		)	(6		)	(23		)
Equity securities and other investments	(2,136		)	(819		)	(387		)
Total loss	(2,138		)	(825		)	(410		)
Net realized gain (loss)	$	(120	)	$	4,044		$	9,723

Realized Gains

The realized gains reported in 2012 is comprised of $530,000 and $643,000 on foreign and domestic equity securities, respectively. In 2011 and 2010, the Company reported realized gains of $3.6 million and $1.2 million and $6.3 million and $336,000 on foreign and domestic equity securities, respectively.

Realized Losses

In addition to losses that result from sale transactions, realized losses also include impairment charges on securities. During the three years ended December 31, 2012, the Company recorded other-than-temporary impairments of $1.8 million, $611,000, and $365,000, respectively, on securities to recognize other-than-temporary declines in value.

The following table summarizes the market value of those investments in an unrealized loss position for periods less than and greater than 12 months (in thousands):



	2012				2011
Less than 12 months	Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss
Debt securities:
Corporate bonds	$	768	$	12	$	66	$	1
Marketable equity securities	5,193		615		6,510		354
Total	$	5,961	$	627	$	6,576	$	355



	2012				2011
Greater than 12 months	Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss
Debt securities:
Corporate bonds	$	2,204	$	44	$	2,818	$	55
Marketable equity securities	45		6		2,757		760
Total	$	2,249	$	50	$	5,575	$	815

Marketable equity securities: The Company’s investments in marketable equity securities totaled $40.4 million at December 31, 2012, and principally consist of common stock of publicly traded small-capitalization companies in the U.S. and selected foreign markets. At December 31, 2012, the Company reviewed all of its equity securities in an unrealized loss position and concluded certain securities were not other-than-temporarily impaired as the declines were not of sufficient duration and severity, and publicly-available financial information did not indicate impairment. The primary cause of the losses on those securities was normal market volatility. The securities that were deemed other-than-temporarily impaired were recorded as an impairment loss in the period. The Company recorded impairment losses of $1.8 million, $611,000 and $365,000, respectively, for the years ended December 31, 2012, 2011 and 2010.

Debt Securities: The Company owns primarily corporate bonds in its fixed maturity portfolio which are purchased based on the maturity and yield-to-maturity of the bond, and an analysis of the fundamental characteristics of the issuer. At December 31, 2012, there were unrealized losses on certain bonds in the portfolio. The Company does not consider those bonds to be other-than-temporarily impaired because the Company expects to hold, and will not be required to sell, these particular bonds, and it expects to recover the entire amortized cost basis at maturity. There were no impairment charges recorded on debt securities during the three years ended December 31, 2012.

Discontinued Operations: At December 31, 2012, the assets and liabilities of discontinued operations were sold and removed from the Company’s consolidated financial statements. At December 31, 2011, discontinued operations held $21.4 million of debt securities, primarily corporate bonds, with a cost of $20.8 million, gross unrealized gains of $629,000, and gross unrealized losses of $68,000. At December 31, 2011, discontinued operations held $13.8 million of marketable equity securities with a cost of $9 million, gross unrealized gains of $4.9 million, and gross unrealized losses of $96,000.

Investment in Unconsolidated Affiliate:

The Company owns 27% of the voting stock in Spigit, Inc. (“Spigit”), a privately held company that develops social productivity software.

During 2012, Spigit raised additional capital and as a result, the Company’s ownership dropped from 30% to 27%. Similarly, during 2011, the Company’s ownership dropped from 37% to 30% as of December 31, 2011. The Company maintained its 37% voting interest during 2010.

The losses reported by Spigit reduced the carrying value of the Company’s investment to zero at December 31, 2011 and December 31, 2012, and therefore no additional losses were recorded in 2012. The Company’s share of the loss reported by Spigit during 2011 was $5.3 million.

During the first quarter of 2013, the Company invested $5 million to acquire an additional 17% of the voting interest in Spigit increasing the total voting ownership to approximately 44%. If certain events transpire at Spigit, including obtaining additional financing from other investors, the Company’s ownership could increase to as much as 67% by March 31, 2013. The future accounting treatment for the investment in Spigit will depend on a variety of factors, including the ultimate ownership percentage and board seats the Company maintains.

The following is summarized financial information of Spigit as of and for the years ended December 31 (in thousands):



Balance Sheet:	2012		2011		2010
Current assets	$	5,971	$	9,061	$	6,602
Noncurrent assets	$	1,704	$	1,019	$	656
Current liabilities	$	22,351	$	18,163	$	8,598
Statement of Operations:
Revenues	$	17,420	$	9,351	$	4,815
Gross margin	$	12,957	$	5,785	$	3,843
Loss from continuing operations and net loss	$	13,811	$	25,173	$	10,140