Note 5. Cash equivalents and investments and fair value disclosures

Cash and cash equivalents

The following table summarizes the Company’s unrealized gains and losses related to the cash equivalents and investments in marketable securities designated as available-for-sale (in thousands):


	As of March 31, 2013									As of December 31, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Cash and cash equivalents
Money market funds	$	11	$	—	$	—		$	11	$	11	$	—	$	—		$	11
Short-term investments
Money market funds		4,858		—		—			4,858		7,259		—		—			7,259
Corporate bonds		27,411		49		(6	)		27,454		23,151		43		(1	)		23,193
U.S. federal agencies		14,138		5		—			14,143		27,241		10		—			27,251
Foreign bonds and notes		—		—		—			—		4,682		14		—			4,696
Municipal obligations		1,901		—		—			1,901		1,902		—		—			1,902
Total investments in short-term investments		48,308		54		(6	)		48,356		64,235		67		(1	)		64,301
Total investments	$	48,319	$	54	$	(6	)	$	48,367	$	64,246	$	67	$	(1	)	$	64,312

As of March 31, 2013 and December 31, 2012, maturities of short-term investments are as follows (in thousands):


	March 31, 2013		December 31, 2012
Less than 1 year	$	39,647	$	51,861
Due in 1 to 2 years		4,811		10,550
Due in 2 to 5 years		2,008		—
Due after 5 years		1,901		1,901
Total	$	48,367	$	64,312

The Company may sell its security investments in the future to fund future operation needs. As a result, the Company recorded all its marketable securities in short-term investment as of March 31, 2013 and December 31, 2012, regardless of the contractual maturity date of the securities.

Realized gains and losses on the sale of marketable securities during the three months ended March 31, 2013 and 2012 were immaterial. The Company did not recognize any impairment losses on its marketable securities during the three months ended March 31, 2013 and 2012. As of March 31, 2013, the Company did not have any investments in marketable securities that were in an unrealized loss position for a period in excess of 12 months.

Fair value disclosures

The following table sets forth the fair value of the Company’s financial assets as of the dates presented (in thousands):


	As of March 31, 2013								As of December 31, 2012
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Money market funds	$	4,869	$	—	$	—	$	4,869	$	7,270	$	—	$	—	$	7,270
Marketable securities
Corporate bonds		—		27,454		—		27,454		—		23,193		—		23,193
U.S. federal agencies		—		14,143		—		14,143		—		27,251		—		27,251
Foreign bonds and notes		—		—		—		—		—		4,696		—		4,696
Municipal obligations		—		1,901		—		1,901		—		1,902		—		1,902
	$	4,869	$	43,498	$	—	$	48,367	$	7,270	$	57,042	$	—	$	64,312

Additionally, the Company’s cash and cash equivalents at March 31, 2013 and December 31, 2012 included time deposits of $11.9 million and $14.7 million, respectively, for which the fair value approximates the carrying amount using inputs classified as level 2 in the fair value hierarchy.

The following table sets forth the fair value of the Company’s financial liabilities as of the dates presented (in thousands):

	As of March 31, 2013								As of December 31, 2012
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Contingent consideration (Note 10)	$	—	$	—	$	959	$	959	$	—	$	—	$	959	$	959
Penalty payment derivative (Note 11)	$	—	$	—	$	138	$	138	$	—	$	—	$	138	$	138