NOTE 3 — INVESTMENTS

Marketable Securities

The Company determines the appropriate classification of its investments in debt and equity securities at the time of purchase and reevaluates such determinations at each balance sheet date. Marketable securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and are reported at fair value, with unrealized gains and losses recognized in earnings. Debt securities are classified as held-to-maturity when the Company has the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are stated at amortized cost, which approximates the fair value of these investments. Debt securities for which the Company does not have the intent or ability to hold to maturity are classified as available-for-sale. Debt and marketable equity securities not classified as held-to-maturity or as trading are classified as available-for-sale, and are carried at fair market value, with the unrealized gains and losses included in the determination of comprehensive income and reported in stockholders’ equity. As of June 30, 2013 and December 31, 2012, all of the Company’s marketable securities were classified as available for sale. Marketable securities are recorded as either short-term or long-term on the balance sheet based on the contractual maturity date. The fair value of all securities is determined by quoted market prices, market interest rates inputs, or other than quoted prices that are observable either directly or indirectly (as of the end of the reporting period). Declines in fair value below the Company’s carrying value deemed to be other than temporary are charged against net earnings.

Available-for-sale securities consisted of the following as of June 30, 2013 (in thousands):



	Amortized Cost		Gains in Accumulated Other Comprehensive Income		Losses in Accumulated Other Comprehensive Income			Estimated Fair Value
Current:
Money Market funds	$	19,125	$	—	$	—		$	19,125
Non-government sponsored debt securities	5,498		—		(2		)	5,496
Total current securities	24,623		—		(2		)	24,621
Noncurrent:
Non-government sponsored debt securities	—		—		—			—
Total noncurrent securities	—		—		—			—

Total available-for-sale securities	$	24,623	$	—	$	(2	)	$	24,621

Available-for-sale securities consisted of the following as of December 31, 2012 (in thousands):



	Amortized Cost		Gains in Accumulated Other Comprehensive Income		Losses in Accumulated Other Comprehensive Income		Estimated Fair Value
Current:
Money Market funds	$	16,987	$	—	$	—	$	16,987
Non-government sponsored debt securities	13,602		5		—		13,607
Total current securities	30,589		5		—		30,594
Noncurrent:
Non-government sponsored debt securities	3,000		—		—		3,000
Total noncurrent securities	3,000		—		—		3,000

Total available-for-sale securities	$	33,589	$	5	$	—	$	33,594

There were no proceeds from the sales of available-for-sale securities during the three months ended June 30, 2013 or 2012. Realized gains and losses on sales of investments are determined using the specific identification method. Realized gains and losses are included in other income (expense) in the Consolidated Statements of Comprehensive Income. Net unrealized holding losses on available-for-sale securities of $(2,000), net of $1,000 of tax benefit, have been included in accumulated other comprehensive income as of June 30, 2013. All of the Company’s available-for-sale securities with gross unrealized losses as of June 30, 2013 have been in a loss position for less than 12 months.

The estimated fair value of available-for-sale debt securities at June 30, 2013 and December 31, 2012, by contractual maturity, was as follows (in thousands):



	Estimated Fair Value
	June 30, 2013		December 31, 2012
Due in one year or less	$	5,496	$	13,607
Due after one year through two years	—		3,000
	$	5,496	$	16,607

Expected maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties.

Non-Marketable Securities and Other-Than-Temporary Impairment

As of June 30, 2013 the Company owned a minority interest in two private companies based in the U.S. through its investments (i) of $4.1 million in one private company and (ii) $1.0 million in a second private company. These minority interests are included at cost in other long-term assets on the Company's Condensed Consolidated Balance Sheets as the Company does not have significant influence over the investees as the Company owns less than 20% of the voting equity in each investee and the investees are not publicly traded. The first private company was acquired by a third party in July 2013 and, as a result, our minority interest in that private company was liquidated. We will realize the gain from the liquidation of our minority interest in the first private company in the third quarter of 2013. The Company regularly evaluates the carrying value of these cost-method investments for impairment and whether any events or circumstances are identified that would significantly harm the fair value of the investments. The primary indicators the Company utilizes to identify these events and circumstances are the investees’ ability to remain in business, such as the investees’ liquidity and rate of cash use, and the investees’ ability to secure additional funding and the value of that additional funding. In the event a decline in fair value is judged to be other-than-temporary, the Company will record an other-than-temporary impairment charge in other income, net in the Consolidated Statements of Comprehensive Income. As the inputs utilized for the Company's periodic impairment assessment are not based on observable market data, these cost method investments are classified within Level 3 of the fair value hierarchy. To determine the fair value of these investments, the Company uses all available financial information related to the entities, including information based on recent or pending third-party equity investments in these entities. In certain instances, a cost method investment's fair value is not estimated as there are no identified events or changes in the circumstances that may have a significant adverse effect on the fair value of the investment and to do so would be impractical.