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Cash Equivalents and Investments and Fair Value Disclosures
 9 Months Ended
Sep. 30, 2013
Cash Equivalents and Investments and Fair Value Disclosures

Note 4. Cash equivalents and investments and fair value disclosures

Cash equivalents and investments

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 September 30, 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 equivalents

 

 

 

  

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

  

 

 

 

 

 

 

 

Money market funds

$

11

  

  

$

-

  

  

$

-

  

 

$

11

  

 

$

11

  

  

$

-

  

  

$

-

  

 

$

11

  

Short-term investments

 

 

 

  

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

  

 

 

 

 

 

 

 

Money market funds

 

12,217

  

  

 

-

  

  

 

-

  

 

 

12,217

  

 

 

7,259

  

  

 

-

  

  

 

-

  

 

 

7,259

  

Corporate bonds

 

7,645

  

  

 

14

  

  

 

-

 

 

 

7,659

  

 

 

23,151

  

  

 

43

  

  

 

(1

) 

 

 

23,193

  

U.S. federal agencies

 

-

  

  

 

-

  

  

 

-

  

 

 

-

  

 

 

27,241

  

  

 

10

  

  

 

-

  

 

 

27,251

  

Foreign bonds and notes

 

5,230

  

  

 

5

  

  

 

(3

) 

 

 

5,232

  

 

 

4,682

  

  

 

14

  

  

 

-

  

 

 

4,696

  

Municipal obligations

 

1,800

  

  

 

-

  

  

 

-

  

 

 

1,800

  

 

 

1,902

  

  

 

-

  

  

 

-

  

 

 

1,902

  

Total short-term investments

 

26,892

  

  

 

19

  

  

 

(3

) 

 

 

26,908

  

 

 

64,235

  

  

 

67

  

  

 

(1

) 

 

 

64,301

  

Total investments

$

26,903

  

  

$

19

  

  

$

(3

) 

 

$

26,919

(1) 

 

$

64,246

  

  

$

67

  

  

$

(1

) 

 

$

64,312

(1) 

(1)Interest income receivable included in total investment balance was $0.2 million and $0.4 million at September 30, 2013 and December 31, 2012, respectively.

As of September 30, 2013, maturities of investments are as follows (in thousands):

 

 

September 30,
2013

 

Less than 1 year

$

23,114

 

Due in 1 to 2 years

 

-

 

Due in 2 to 5 years

 

2,005

 

Due after 5 years

 

1,800

 

Total

$

26,919

 

The Company may sell its marketable securities in the future to fund future operating needs. As a result, the Company recorded all of its marketable securities as short-term as of September 30, 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 and nine months ended September 30, 2013 and 2012 were immaterial. The Company did not recognize any impairment losses on its marketable securities during the three and nine months ended September 30, 2013 and 2012. As of September 30, 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 date presented (in thousands):

 

 

As of September 30, 2013

 

  

As of December 31, 2012

 

 

Level 1

 

  

Level 2

 

  

Level 3

 

  

Total

 

  

Level 1

 

  

Level 2

 

  

Level 3

 

  

Total

 

Money market funds

$

12,228

  

  

$

-

  

  

$

-

  

  

$

12,228

  

  

$

7,270

  

  

$

-

  

  

$

-

  

  

$

7,270

  

Marketable securities

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

Corporate bonds

 

-

  

  

 

7,659

  

  

 

-

  

  

 

7,659

  

  

 

-

  

  

 

23,193

  

  

 

-

  

  

 

23,193

  

U.S. federal agencies

 

-

  

  

 

-

  

  

 

-

  

  

 

-

  

  

 

-

  

  

 

27,251

  

  

 

-

  

  

 

27,251

  

Foreign bonds and notes

 

-

  

  

 

5,232

  

  

 

-

  

  

 

5,232

  

  

 

-

  

  

 

4,696

  

  

 

-

  

  

 

4,696

  

Municipal obligations

 

-

  

  

 

1,800

  

  

 

-

  

  

 

1,800

  

  

 

-

  

  

 

1,902

  

  

 

-

  

  

 

1,902

  

 

$

12,228

  

  

$

14,691

  

  

$

-

  

  

$

26,919

  

  

$

7,270

  

  

$

57,042

  

  

$

-

  

  

$

64,312

  

Additionally, the Company’s cash and cash equivalents at September 30, 2013 and December 31, 2012 included time deposits of $6.5 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 September 30, 2013

 

  

As of December 31, 2012

 

 

  

Level 1

 

  

Level 2

 

  

Level 3

 

  

Total

 

  

Level 1

 

  

Level 2

 

  

Level 3

 

  

Total

 

Contingent consideration (Note 13)

 

$

—

 

 

$

—

 

 

$

1,985

 

 

$

1,985

 

 

$

—

 

 

$

—

 

 

$

959

 

 

$

959

 

Penalty payment derivative (Note 9)

  

$

—

 

  

$

—

 

  

$

238

 

  

$

238

 

  

$

—

 

  

$

—

 

  

$

138

 

  

$

138