Marketable Securities, Available-for-sale

6 Months Ended

Jun. 30, 2012

Marketable Securities, Available-for-sale

Marketable Securities, Available-for-sale

Note 6.  Marketable Securities, Available-for-sale

The Company’s investment portfolio includes U.S. Treasury securities; obligations of U.S. government and local government agencies; corporate debt backed by U.S. government/agency programs; corporate debt securities; asset-backed securities of U.S. government agencies and covered bonds; time deposits; and short-term pooled investments. These investments are primarily held in the custody of a single financial institution. Time deposits and short-term pooled investments, which are not considered cash equivalents, have original maturities in excess of 90 days. The Company considers its investment portfolio to be available-for-sale as defined by the Financial Accounting Standards Board (“FASB”) in its Accounting Standards Codification (“ASC”) No. 320 (“ASC 320”), “Investments—Debt and Equity Securities.” Accordingly, these investments are recorded at their fair values. The cost of securities sold is based on an average-cost basis. Unrealized gains and losses on these investments were included in “Accumulated other comprehensive income” within the Consolidated Balance Sheets.

The Company periodically reviews its available-for-sale securities for other-than-temporary declines in fair values that are below their cost bases, as well as whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. At June 30, 2012 and December 31, 2011, the Company believed that the cost bases for its available-for-sale securities were recoverable in all material respects.

For the three-month periods ended June 30, 2012 and 2011, net realized earnings associated with the Company’s investment portfolio, which includes interest, dividends and net realized gains and losses on sales of marketable securities, totaled $519,000 and $1.3 million, respectively. For the six-month periods ended June 30, 2012 and 2011, net realized earnings totaled $965,000 and $2.6 million, respectively. These earnings were included in “Gain from marketable securities, net” within the Consolidated Statements of Earnings.

The following table sets forth the fair values of marketable securities, available-for-sale, by type of security:

								JUNE 30, 2012
(in thousands)	AMORTIZED COST		GROSS UNREALIZED GAINS		GROSS UNREALIZED LOSSES			ESTIMATED FAIR VALUE
Type of security:
U.S. Treasury securities	$	7,182	$	-	$	(7	)	$	7,175
Obligations of U.S. and local government agencies	140,646		700		(19		)	141,327
Corporate debt securities issued under
U.S. government/agency-backed programs	1,502		1		-			1,503
Corporate debt securities	76,568		102		(48		)	76,622
Asset-backed securities	37,570		72		(130		)	37,512
Total debt securities	263,468		875		(204		)	264,139
Time deposits	45,471		-		-			45,471
Short-term pooled investments	1,028		-		-			1,028
Total marketable securities, available-for-sale	$	309,967	$	875	$	(204	)	$	310,638
							DECEMBER 31, 2011
Type of security:
U.S. Treasury securities	$	1,557	$	-	$	(2	)	$	1,555
Obligations of U.S. and local government agencies	147,557		123		(860		)	146,820
Corporate debt securities issued under
U.S. government/agency-backed programs	1,453		3		-			1,456
Corporate debt securities	126,088		101		(523		)	125,666
Asset-backed securities	46,198		42		(496		)	45,744
Total debt securities	322,853		269		(1,881		)	321,241
Time deposits	25,500		-		-			25,500
Short-term pooled investments	275		-		-			275
Total marketable securities, available-for-sale	$	348,628	$	269	$	(1,881	)	$	347,016

The primary objectives of the Company’s investment portfolio are safety of principal and liquidity. Investments are made with the purpose of achieving the highest rate of return consistent with these two objectives. The Company’s investment policy limits investments to debt rated investment grade or better, as well as to bank and money market instruments and to issues by the U.S. government, U.S. government agencies and municipal or other institutions primarily with investment-grade credit ratings. Policy restrictions are placed on maturities, as well as on concentration by type and issuer.

The following table sets forth the fair values of marketable securities, available-for-sale, by contractual maturity:

(in thousands)	JUNE 30, 2012		DECEMBER 31, 2011
Contractual maturity:
Maturing in one year or less	$	72,766	$	167,413
Maturing after one year through three years	167,880		120,952
Maturing after three years	23,493		32,876
Total debt securities	264,139		321,241
Time deposits and short-term pooled investments	46,499		25,775
Total marketable securities, available-for-sale	$	310,638	$	347,016