Note 2. Cash, Money Market Funds and Marketable Securities

As of March 31, 2013, the Company held $26.7 million in cash and cash equivalents and $58.0 million of available-for-sale investment securities which are reported at fair value on the Company’s balance sheet. Unrealized holding gains and losses are reported within comprehensive income/(loss) in the statements of comprehensive loss. If a decline in the fair value of a marketable security below the Company’s cost basis is determined to be other than temporary, such marketable security is written down to its estimated fair value as a new cost basis and the amount of the write-down is included in earnings as an impairment charge. To date, only temporary impairment adjustments have been recorded.

Consistent with the Company’s investment policy, the Company does not use derivative financial instruments in its investment portfolio. The Company regularly invests excess operating cash in deposits with major financial institutions, money market funds, notes issued by the U.S. government, as well as fixed income investments and U.S. bond funds both of which can be readily purchased and sold using established markets. The Company believes that the market risk arising from its holdings of these financial instruments is mitigated as many of these securities are either government backed or of the highest credit rating.

Cash and available-for-sale securities consisted of the following as of December 31, 2012 and March 31, 2013 (in thousands):

	As of December 31, 2012
	Cost		Unrealized Gain		Unrealized Loss			Fair Value
Cash balances	$	33,971	$	—	$	—		$	33,971
Corporate debt securities	42,503		5		(11		)	42,497
Commercial paper	19,725		19		—			19,744
Certificate of deposit	2,909		1		—			2,910
	$	99,108	$	25	$	(11	)	$	99,122

Included in cash and cash equivalents	$	33,971	$	—	$	—		$	33,971
Included in marketable securities	65,137		25		(11		)	65,151
Total cash and available for sale securities	$	99,108	$	25	$	(11	)	$	99,122

	As of March 31, 2013
	Cost		Unrealized Gain		Unrealized Loss			Fair Value
Cash balances	$	26,736	$	—	$	—		$	26,736
Corporate debt securities	35,934		3		(13		)	35,924
Commercial paper	21,716		25		—			21,741
Certificate of deposit	350		—		—			350
	$	84,736	$	28	$	(13	)	$	84,751

Included in cash and cash equivalents	$	26,736	$	—	$	—		$	26,736
Included in marketable securities	58,000		28		(13		)	58,015
Total cash and available for sale securities	$	84,736	$	28	$	(13	)	$	84,751

Unrealized gains and losses are reported as a component of other comprehensive income/(loss) in the statements of comprehensive loss. For the year ended December 31, 2012, and the three months ended March 31, 2013, unrealized holding gains of $10 thousand and $1 thousand were included in the statements of comprehensive loss, respectively.

For the year ended December 31, 2012 and the three months ended March 31, 2013, there were no realized gains or losses. The cost of securities sold is based on the specific identification method.

Unrealized loss positions in the available for sale securities as of December 31, 2012 and March 31, 2013 reflect temporary impairments that have not been recognized and have been in a loss position for less than twelve months. The fair value of these available for sale securities in unrealized loss positions was $33.1 million and $26.1 million as of December 31, 2012 and March 31, 2013, respectively.

The Company holds available-for-sale investment securities which are reported at fair value on the Company’s balance sheet. Unrealized holding gains and losses are reported within accumulated other comprehensive income (“AOCI”) in the statements of comprehensive loss. The changes in AOCI associated with the unrealized holding gain on available-for-sale investments during the three months ended March 31, 2012 and 2013, were as follows (in thousands):

	Three Months Ended March 31,
	2012		2013
Balance, beginning	$	4	$	14
Current period changes in fair value, (a)	33		1
Reclassification of earnings, (a)	—		—
Balance, ending	$	37	$	15

(a) — Taxes have not been accrued on the unrealized gain on securities as the Company is in a loss position for all periods presented.