Marketable Securities

12 Months Ended

Dec. 31, 2012

Marketable Securities

Marketable Securities

Note 2. Marketable Securities

        The following is a summary of our marketable security portfolio as of December 31, 2012 and 2011, respectively.

	Amortized Cost		Net Unrealized Gains		Net Unrealized Losses		Estimated Fair Value
	(in thousands)
December 31, 2012
Mortgage backed securities	$	2,483	$	1,878	$	—	$	4,361
	$	2,483	$	1,878	$	—	$	4,361
December 31, 2011
Mortgage backed securities	$	3,343	$	1,087	$	—	$	4,430
	$	3,343	$	1,087	$	—	$	4,430

        Because of the potential for prepayment on mortgage-backed securities, they are not categorized by contractual maturity.

Fair Value Measurements

        FASB accounting guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability ("the exit price") in an orderly transaction between market participants at the measurement date. The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. In determining fair value we use quoted prices and observable inputs. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of us. The fair value hierarchy is broken down into three levels based on the source of inputs as follows:

• Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities.

  Level 2—Valuations based on observable inputs and quoted prices in active markets for similar assets and liabilities.

  Level 3—Valuations based on inputs that are unobservable and models that are significant to the overall fair value measurement.

        Our marketable securities consist of investments in U.S. Treasury notes, and other U.S. government agency and non-agency mortgage-backed securities that are classified as available-for-sale.

        At December 31, 2012 and 2011, our Level 2 mortgage-backed securities are valued using readily available pricing sources which utilize market observable inputs, including the current interest rate and other characteristics for similar types of instruments.

        Restricted cash and investments primarily consisted of amounts held in escrow for interest payments on our 4.75% Convertible Senior Notes due 2015 (the "4.75% Senior Notes") through October 2012. The restricted investments consisted of U.S. Treasury notes.

        The following fair value hierarchy table presents information about each major category of our financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2012 (in thousands):

	Fair Value Measurement at Reporting Date Using:
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance as of December 31, 2012
Cash and cash equivalents	$	224,057	$	—	$	—	$	224,057
Mortgage-backed securities		—		4,361		—		4,361
Total assets	$	224,057	$	4,361	$	—	$	228,418

        The following fair value hierarchy table presents information about each major category of our financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2011 (in thousands):

	Fair Value Measurement at Reporting Date Using:
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance as of December 31, 2011
Cash and cash equivalents	$	273,164	$	—	$	—	$	273,164
Mortgage-backed securities		—		4,430		—		4,430
Restricted cash and investments		19,294		—		—		19,294
Total assets	$	292,458	$	4,430	$	—	$	296,888

        Net realized gains of $0.6 million, $0.2 million and $0.2 million from the sale of restricted cash and investment and marketable securities were included in "Interest and other income, net" in 2012, 2011 and 2010, respectively.