Cash, Cash Equivalents, and Available-For-Sale Investments

9 Months Ended

Sep. 30, 2012

Cash, Cash Equivalents, and Available-For-Sale Investments

Note 2 — Cash, Cash Equivalents, and Available-For-Sale Investments

Cash, cash equivalents, and available-for-sale investments are as follows (in thousands). Included in our restricted cash and long-term investments balance on our Condensed Consolidated Balance Sheet at September 30, 2012 is $25.0 million of restricted cash required to be maintained in a separate reserve account until July 1, 2015 under the terms of our senior secured notes issued in July 2012.

	Estimated Fair Value at
	September 30, 2012		December 31, 2011
Cash and cash equivalents	$	10,338	$	15,312
Short-term investments		308,939		225,856
Restricted cash and long-term investments		35,022		173,768
Total cash, cash equivalents, and available-for-sale investments	$	354,299	$	414,936

Our portfolio of cash, cash equivalents, and available-for-sale investments includes (in thousands):

	Estimated Fair Value at
	September 30, 2012		December 31, 2011
Corporate notes and bonds	$	299,457	$	344,427
U.S. corporate commercial paper		12,998		9,464
Obligations of U.S. government agencies		5,001		44,230
Obligations of U.S. states and municipalities		1,505		1,503
Available-for-sale investments		318,961		399,624
Cash and money market funds		35,338		15,312
Total cash, cash equivalents, and available-for-sale investments	$	354,299	$	414,936

The following table summarizes our portfolio of available-for-sale investments reported as short-term and long-term investments by contractual maturity (in thousands):

	Estimated Fair Value at
	September 30, 2012		December 31, 2011
Less than one year	$	308,939	$	213,386
Greater than one year but less than two years		10,022		186,238
Total available-for-sale investments	$	318,961	$	399,624

We invest in liquid, high quality debt securities. Our investments in debt securities are subject to interest rate risk. To minimize the exposure due to an adverse shift in interest rates, we invest in securities with maturities of two years or less and maintain a weighted average maturity of one year or less. Investments in securities with remaining maturities of less than one year, or where our intent is to use the investments to fund current operations or to make them available for current operations, are classified as short-term investments.

Gross unrealized gains and losses were not significant at either September 30, 2012 or December 31, 2011. During the nine month periods ended September 30, 2012 and 2011, we sold available-for-sale securities totaling $5.4 million and $218.7 million, respectively, and realized gains and losses were not significant in any of the three and nine month periods ended September 30, 2012 and 2011. The cost of securities sold is based on the specific identification method.

All of our investments are categorized as Level 1 or Level 2, as explained in the table below. We use a market approach to value our Level 2 investments. The disclosed fair value related to our investments is based primarily on the reported fair values in our period-end brokerage statements, which are based on market prices from a variety of industry standard data providers and generally represent quoted prices for similar assets in active markets or have been derived from observable market data. We independently validate these fair values using available market quotes and other information. During the three and nine month periods ended September 30, 2012 and 2011, there were no transfers between Level 1 and Level 2 of the fair value hierarchy.

The following table represents the fair value hierarchy for our financial assets measured at fair value on a recurring basis as of September 30, 2012 and December 31, 2011 (in thousands):

As of September 30, 2012:	Level 1		Level 2		Level 3		Total
Money market funds	$	8,992	$	—	$	—	$	8,992
U.S. corporate commercial paper		—		12,998		—		12,998
Corporate notes and bonds		—		299,457		—		299,457
Obligations of U.S. government agencies		—		5,001		—		5,001
Obligations of U.S. states and municipalities		—		1,505		—		1,505
Cash equivalents and available-for-sale investments	$	8,992	$	318,961	$	—	$	327,953
Cash, including restricted cash								26,346
Cash, cash equivalents, and available-for-sale investments							$	354,299
As of December 31, 2011:	Level 1		Level 2		Level 3		Total
Money market funds	$	13,950	$	—	$	—	$	13,950
U.S. corporate commercial paper		—		9,464		—		9,464
Corporate notes and bonds		—		344,427		—		344,427
Obligations of U.S. government agencies		—		44,230		—		44,230
Obligations of U.S. states and municipalities		—		1,503		—		1,503
Cash equivalents and available-for-sale investments	$	13,950	$	399,624	$	—	$	413,574
Cash								1,362
Cash, cash equivalents, and available-for-sale investments							$	414,936

Level 1 —	Quoted prices in active markets for identical assets or liabilities.
Level 2 —	Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 —	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.