NOTE 2-INVESTMENT SECURITIES

The following tables summarize cash, cash equivalents, marketable securities and long term investments (in thousands):

	December 31,
	2011		2010
Cash and cash equivalents:
Cash	$	2,153	$	1,989
Cash equivalents:
Money market funds		7,318		8,330
Commercial paper		4,549		2,200
Total cash and cash equivalents		14,020		12,519

Marketable securities:
U.S. government notes		3,665		2,070
U.S. government agencies		41,565		24,087
Municipal securities		6,134		15,011
Commercial paper		4,747		11,465
Corporate debt securities		18,555		24,851
Total marketable securities		74,666		77,484

Long-term investments in ARS		3,027		6,784
Total cash, cash equivalents, marketable securities and long term investments	$	91,713	$	96,787

The following table summarizes unrealized gains and losses related to our marketable investments and long term investments, both designated as available-for-sale (in thousands):

			Gross		Gross			Fair
	Amortized		Unrealized		Unrealized			Market
December 31, 2011	Cost		Gains		Losses			Value
Cash and cash equivalents	$	14,020	$	-	$	-		$	14,020

Marketable investments
U.S. government notes		3,655		10		-			3,665
U.S. government agencies		41,535		44		(14	)		41,565
Municipal securities		6,091		44		(1	)		6,134
Commercial paper		4,747		1		(1	)		4,747
Corporate debt securities		18,574		15		(34	)		18,555
Total marketable securities		74,602		114		(50	)		74,666

Long-term investments in ARS		3,900		-		(873	)		3,027
Total cash, cash equivalents, marketable securities and long term investments	$	92,522	$	114	$	(923	)	$	91,713

			Gross		Gross			Fair
	Amortized		Unrealized		Unrealized			Market
December 31, 2010	Cost		Gains		Losses			Value
Cash and cash equivalents	$	12,519	$	-	$	-		$	12,519

Marketable investments
U.S. government notes		2,069		1		-			2,070
U.S. government agencies		24,088		17		(18	)		24,087
Municipal securities		15,029		2		(20	)		15,011
Commercial paper		11,459		7		(1	)		11,465
Corporate debt securities		24,825		55		(29	)		24,851
Total marketable securities		77,470		82		(68	)		77,484

Long-term investments in ARS		8,325		-		(1,541	)		6,784
Total cash, cash equivalents, marketable securities and long term investments	$	98,314	$	82	$	(1,609	)	$	96,787

The Company did not have any gains or losses associated with its long-term investments. The realized gains and losses associated with short-term investments were as follows (in thousands):

		Year Ended December 31,
		2011		2010			2009
Realized gains on investments	$	5	$	78		$	103
Realized losses on investments		-		(4	)		-

The following table summarizes the fair value and the gross unrealized losses for investments that were in an unrealized loss position, aggregated by category and by the length in time that the individual securities have been in a continuous loss position (in thousands):

	Less Than 12 Months					12 Months or Greater					Total
	Fair		Gross			Fair		Gross			Fair		Gross
	Market		Unrealized			Market		Unrealized			Market		Unrealized
December 31, 2011	Value		Losses			Value		Losses			Value		Losses
U.S. government agencies	$	12,758	$	(14	)	$	-	$	-		$	12,758	$	(14	)
Municipal securities		929		(1	)		-		-			929		(1	)
Commercial paper		999		(1	)		-		-			999		(1	)
Corporate debt securities		-		-			7,799		(34	)		7,799		(34	)
Long-term investments in ARS		-		-			3,027		(873	)		3,027		(873	)
Total	$	14,686	$	(16	)	$	10,826	$	(907	)	$	25,512	$	(923	)

	Less Than 12 Months					12 Months or Greater					Total
	Fair		Gross			Fair		Gross			Fair		Gross
	Market		Unrealized			Market		Unrealized			Market		Unrealized
December 31, 2010	Value		Losses			Value		Losses			Value		Losses
U.S. government agencies	$	7,830	$	(18	)	$	-	$	-		$	7,830	$	(18	)
Municipal securities		10,083		(19	)		2,050		(1	)		12,133		(20	)
Commercial paper		-		-			-		-			-		-
Corporate debt securities		8,498		(29	)		-		-			8,498		(29	)
Long-term investments in ARS		-		-			6,784		(1,541	)		6,784		(1,541	)
Total	$	26,411	$	(66	)	$	8,834	$	(1,542	)	$	35,245	$	(1,608	)

The following table summarizes the estimated fair value of our marketable investments and long term investments classified by the contractual maturity date of the security as of December 31, 2011 (in thousands):

	Amount
Due in less than one year (fiscal year 2012)	$	40,988
Due in 1 to 3 years (fiscal year 2013- 2014)		33,678
Due in 3 to 5 years (fiscal year 2015-2016)		-
Due in 5 to 10 years (fiscal year 2017-2022)		-
Due in greater than 10 years (fiscal year 2023 and beyond)		3,027
	$	77,693

Fair Value Measurements

The following table summarizes financial assets measured and recognized at fair value on a recurring basis and classified under the appropriate level of the fair value hierarchy as described above (in thousands):

December 31, 2011	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	7,318	$	-	$	-	$	7,318
Commercial paper		-		4,549		-		4,549
Short term marketable investments:
Available-for-sale securities		-		74,666		-		74,666
Long-term investments:
Available-for-sale ARS		-		-		3,027		3,027
Total assets at fair value	$	7,318	$	79,215	$	3,027	$	89,560

December 31, 2010	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	8,331	$	-	$	-	$	8,331
Commercial paper		-		2,200		-		2,200
Short term marketable investments:
Available-for-sale securities		-		77,484		-		77,484
Long-term investments:
Available-for-sale ARS		-		-		6,784		6,784
Total assets at fair value	$	8,331	$	79,684	$	6,784	$	94,799

The Company's Level 1 financial assets are money market funds with stated maturities of three months or less from the date of purchase, whose fair values are based on quoted market prices. The Company's Level 2 financial assets are highly liquid debt instruments of U.S. federal and municipal governments and their agencies, commercial paper and corporate debt securities whose fair values are obtained from readily-available pricing sources for the identical underlying security that may, or may not, be actively traded.

At December 31, 2011, observable market information was not available to determine the fair value of the Company's ARS investments. Therefore, the fair value is based on broker-provided valuation models that relied on Level 3 inputs including those that are based on expected cash flow streams and collateral values, assessments of counterparty credit quality, default risk underlying the security, market discount rates and overall capital market liquidity. The valuation of the Company's ARS investment portfolio is subject to uncertainties that are difficult to predict. Factors that may impact the valuations in the future include changes to credit ratings of the securities, as well as to the underlying assets supporting those securities, rates of default of the underlying assets, underlying collateral value, discount rates, counterparty risk and ongoing strength and quality of market credit and liquidity. These financial instruments are classified within Level 3 of the fair value hierarchy.

The table presented below summarizes the change in carrying value associated with Level 3 financial assets, which represents the Company's investment in long term ARS, for the year ended December 31, 2011 (in thousands):


Balance at December 31, 2009	$	7,275
Total gains or losses (realized or unrealized)
Included in earnings (or changes in net assets)		-
Included in other comprehensive income (loss)		(26	)
Purchases and issuances		-
Settlements		(465	)
Balance at December 31, 2010		6,784
Total gains or losses (realized or unrealized)
Included in earnings (or changes in net assets)		-
Included in other comprehensive income (loss)		668
Purchases and issuances		-
Settlements		(4,425	)
Balance at December 31, 2011	$	3,027