Marketable Securities, Available-for-sale

6 Months Ended

Jun. 30, 2013

Marketable Securities, Available-for-sale

Marketable Securities, Available-for-sale

Note 7.  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 securities; asset-backed securities of U.S. government agencies and covered bonds; and short-term pooled investments. These investments are primarily held in the custody of a single financial institution. 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 in 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 (loss) 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, 2013 and December 31, 2012, 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, 2013 and 2012, net realized earnings associated with the Company’s investment portfolio, which includes interest, dividends and net realized gains on sales of marketable securities, totaled $561,000 and $519,000, respectively. For the six-month periods ended June 30, 2013 and 2012, net realized earnings totaled $1.3 million and $965,000, respectively. These earnings were included in “Gain from marketable securities, net” within the Consolidated Statements of Earnings. Realized gains or losses on the sales of marketable securities were included as reclassification adjustments within the Consolidated Statements of Other Comprehensive Income. (See Note 3, “Accumulated Other Comprehensive (Loss) Income.”)

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

								JUNE 30, 2013
			GROSS		GROSS
	AMORTIZED		UNREALIZED		UNREALIZED			ESTIMATED
(in thousands)	COST		GAINS		LOSSES			FAIR VALUE
Type of security:
U.S. Treasury securities	$	42,689	$	1	$	(26	)	$	42,664
Obligations of U.S. and local government agencies	65,265		492		(752		)	65,005
Corporate debt securities	158,846		29		(235		)	158,640
Asset-backed securities	28,251		81		(292		)	28,040
Total debt securities	295,051		603		(1,305		)	294,349
Short-term pooled investments	67,864		-		(19		)	67,845
Total marketable securities, available-for-sale	$	362,915	$	603	$	(1,324	)	$	362,194
					DECEMBER 31, 2012
Type of security:
U.S. Treasury securities	$	3,098	$	1	$	-		$	3,099
Obligations of U.S. and local government agencies	154,774		1,008		(489		)	155,293
Corporate debt securities	165,153		116		(75		)	165,194
Asset-backed securities	27,325		153		(164		)	27,314
Total debt securities	350,350		1,278		(728		)	350,900
Short-term pooled investments	37,127		-		(7		)	37,120
Total marketable securities, available-for-sale	$	387,477	$	1,278	$	(735	)	$	388,020

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 displays the fair values of marketable securities, available-for-sale, by contractual maturity:

(in thousands)	JUNE 30, 2013		DECEMBER 31, 2012
Contractual maturity:
Maturing in one year or less	$	113,328	$	68,347
Maturing after one year through three years	153,707		257,595
Maturing after three years	27,314		24,958
Total debt securities	294,349		350,900
Short-term pooled investments	67,845		37,120
Total marketable securities, available-for-sale	$	362,194	$	388,020