Investments and Marketable Securities

12 Months Ended

Dec. 31, 2012

Investments and Marketable Securities

Note 4 Investments and Marketable Securities

Investments in marketable debt securities are classified based on intent and ability to sell investment securities. Zebra’s available-for-sale securities are used to fund further acquisitions and other operating needs and therefore can be sold prior to maturity. Investments in marketable debt securities for which Zebra intends to sell within the next year are classified as current and those that we intend to hold in excess of one-year are classified as non-current.

Changes in the market value of available-for-sale securities are reflected in the accumulated other comprehensive income caption of stockholders’ equity in the balance sheet, until we dispose of the securities. Once these securities are disposed of, either by sale or maturity, the accumulated changes in market value are transferred to investment income. On the statement of cash flows, changes in the balances of available-for-sale securities are shown as purchases, sales and maturities of investments and marketable securities under investing activities.

Changes in market value of trading securities would be recorded in investment income as they occur, and the related cash flow statement includes changes in the balances of trading securities as operating cash flows.

Changes in unrealized gains and losses on available-for-sale securities are included in these financial statements as follows (in thousands):

	Year Ended December 31,
	2012		2011		2010
Changes in unrealized gains and losses on available-for- sale securities, net of tax, recorded in accumulated other comprehensive income (loss)	$	887	$	(385)	$	(406)

The following table shows the number, aggregate market value and unrealized losses (in thousands) of investments with market values that were less than amortized cost as of December 31, 2012. These lower market values are primarily caused by fluctuations in credit spreads. Market values are expected to recover to the amortized cost prior to maturity.

	Unrealized Loss < 12 months					Unrealized Loss > 12 months
	Number of investments	Aggregate Market Value		Unrealized     Losses		Number of investments	Aggregate Market Value		Unrealized     Losses
Government securities	4	$	5,179	$	(3)	1	$	1,790	$	(0)
State and municipal bonds	19		24,969		(27)	1		1,092		(1)
Corporate Securities	33		15,429		(23)	14		7,262		(445)
Total	56	$	45,577	$	(53)	16	$	10,144	$	(446)

As of December 31, 2011, the number, aggregate market value and unrealized losses (in thousands) of investments with market values that were less than amortized cost were:

	Unrealized Loss < 12 months					Unrealized Loss > 12 months
	Number of investments	Aggregate Market Value		Unrealized Losses		Number of investments	Aggregate Market Value		Unrealized Losses
Government securities	5	$	4,599	$	(3)	6	$	6,708	$	(4)
State and municipal bonds	16		24,556		(7)	11		18,612		(36)
Corporate Securities	35		31,461		(855)	53		17,057		(532)
Total	56	$	60,616	$	(865)	70	$	42,377	$	(572)

Using the specific identification method, the proceeds and realized gains on the sales of available-for-sale securities were as follows (in thousands):

	Year Ended December 31,
	2012			2011			2010
Proceeds	$	164,410		$	303,801		$	102,485
Realized gains		423			388			458
Realized losses		(78	)		(306	)		(198)
Net realized gains (losses) included in other comprehensive income (loss) as of the end of the prior year		285			159			(264)

Included in Zebra’s cash, restricted cash, investments and marketable securities are amounts held by foreign subsidiaries which are generally invested in U.S. dollar-denominated holdings. Zebra had $173,483,000 as of December 31, 2012, and $96,829,000 as of December 31, 2011 of foreign cash and investments. Amounts held by foreign subsidiaries are generally subject to U.S. income taxation upon repatriation, however, Zebra does not see a need to repatriate these funds.