Note 2 - Cash, Cash Equivalents and Investments

12 Months Ended

Dec. 31, 2013

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

2.  Cash, Cash Equivalents and Investments

The following is a summary of the Company’s cash and cash equivalents, short-term and long-term investments (in thousands):

	Estimated Fair Market Value as of
	December 31, 2013		December 31, 2012
Cash, cash equivalents and investments:
Cash	$	62,625	$	59,145
Money market funds		35,588		15,959
U.S. treasuries and government agency bonds		128,126		85,521
Auction-rate securities backed by student-loan notes		9,860		11,755
Total cash, cash equivalents and investments	$	236,199	$	172,380

Reported as:	December 31, 2013		December 31, 2012
Cash and cash equivalents	$	101,213	$	75,104
Short-term investments		125,126		85,521
Long-term investments		9,860		11,755
Total cash, cash equivalents and investments	$	236,199	$	172,380

For the years ended December 31, 2013 and 2012, the Company redeemed $2.0 million and $2.1 million, respectively, of auction-rate securities at par.

The contractual maturities of the Company’s short-term and long-term available-for-sale investments are as follows (in thousands):

	December 31, 2013		December 31, 2012
Due in less than 1 year	$	95,509	$	52,880
Due in 1 - 5 years		29,617		32,641
Due in greater than 5 years		9,860		11,755
	$	134,986	$	97,276

 The following tables summarize unrealized gains and losses related to our investments in marketable securities designated as available-for sale (in thousands):

	As of December 31, 2013
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Total Fair Value		Fair Value of Investments in Unrealized Loss Position
Money market funds	$	35,588	$	-	$	-		$	35,588	$	-
U.S. treasuries and government agency bonds		128,123		26		(23	)		128,126		42,880
Auction-rate securities backed by student-loan notes		10,220		-		(360	)		9,860		9,860
	$	173,931	$	26	$	(383	)	$	173,574	$	52,740

	As of December 31, 2012
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Total Fair Value		Fair Value of Investments in Unrealized Loss Position
Money market funds	$	15,959	$	-	$	-		$	15,959	$	-
U.S. treasuries and government agency bonds		85,483		45		(7	)		85,521		14,121
Auction-rate securities backed by student-loan notes		12,245		-		(490	)		11,755		11,755
	$	113,687	$	45	$	(497	)	$	113,235	$	25,876

The following table details the fair value measurement of the financial assets (in thousands):

	Fair Value Measurement at December 31, 2013
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Total		Level 1		Level 2		Level 3
Money market funds	$	35,588	$	35,588	$	-	$	-
U.S. treasuries and government agency bonds		128,126		-		128,126		-
Auction-rate securities backed by student-loan notes		9,860		-		-		9,860
	$	173,574	$	35,588	$	128,126	$	9,860

	Fair Value Measurement at December 31, 2012
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Total		Level 1		Level 2		Level 3
Money market funds	$	15,959	$	15,959	$	-	$	-
U.S. treasuries and government agency bonds		85,521		-		85,521		-
Auction-rate securities backed by student-loan notes		11,755		-		-		11,755
	$	113,235	$	15,959	$	85,521	$	11,755

The Company's level 2 assets consist of U.S. treasuries and government agency bonds. These securities generally have market prices available from multiple sources, which are used as inputs into a distribution-curve based algorithm to determine fair value.

The Company’s level 3 assets consist of government-backed student loan auction-rate securities, with interest rates that reset through a Dutch auction every 7 to 35 days and which became illiquid in 2008. The following table provides a reconciliation of the Company’s level 3 assets (in thousands):

Beginning balance at January 1, 2012	$	13,675
Sales and settlement at par		(2,100	)
Realized gain included in interest and other income, net		40
Change in unrealized loss included in other comprehensive income		140
Balance at December 31, 2012		11,755
Sales and settlement at par		(2,025	)
Change in unrealized loss included in other comprehensive income		130
Ending balance at December 31, 2013	$	9,860

The Company’s investment portfolio as of December 31, 2013 included $9.9 million in government-backed student loan auction-rate securities, net of impairment charges of $390,000, of which $360,000 was temporary and $30,000 was recorded as other-than-temporary. This compares to an investment balance as of December 31, 2012 of $11.8 million in government-backed student loan auction-rate securities, net of impairment charges of $520,000, of which $490,000 was temporary and $30,000 was recorded as other-than-temporary.

The underlying maturities of these auction-rate securities are up to 34 years. As of December 31, 2013 and 2012, the portion of the impairment classified as temporary was based on the following analysis:

1.	The decline in the fair value of these securities is not largely attributable to adverse conditions specifically related to these securities or to specific conditions in an industry or in a geographic area;
2.	Management possesses both the intent and ability to hold these securities for a period of time sufficient to allow for any anticipated recovery in fair value;
3.	Management believes that it is more likely than not that the Company will not have to sell these securities before recovery of its cost basis;
4.	Except for the credit loss of $70,000 recognized in the year ended December 31, 2009, the Company does not believe that there is any additional credit loss associated with these securities because the Company expects to recover the entire amortized cost basis;
5.	There have been no further downgrades on these securities since 2009;
6.	All scheduled interest payments have been made pursuant to the reset terms and conditions; and
7.	All redemptions of these securities, representing 76% of the original portfolio, have been at par.

Unless a rights offering or other similar offer is made to redeem at par and accepted by the Company, the Company intends to hold the balance of these investments through successful auctions at par.

Determining the fair value of the auction-rate securities requires significant management judgment regarding projected future cash flows which will depend on many factors, including the quality of the underlying collateral, estimated time for liquidity including potential to be called or restructured, underlying final maturity, insurance guaranty and market conditions, among others. To determine the fair value of the auction-rate securities, the Company used a discounted cash flow model with the following assumptions:

	At December 31, 2013			At December 31, 2012
Time-to-liquidity (months)		24			24
Expected return		2.5%			1.8%
Discount rate	3.3%	-	8.1%	2.5%	-	7.3%

For the year ended December 31, 2012, the Company redeemed a security at face value for which an other-than-temporary impairment of $40,000 had previously been recorded and therefore, recognized a gain of $40,000 in interest and other income, net, in the Consolidated Statement of Operations.

Deferred Compensation Plan:

In the second quarter of 2013, the Company adopted a deferred compensation plan, which provides certain key employees, including our executive management, with the ability to defer the receipt of compensation in order to accumulate funds for retirement on a tax-deferred basis. As of December 31, 2013, the plan assets totaled $607,000 and the plan liabilities totaled $628,000. For the year ended December 31, 2013, the Company recorded an expense of $10,000 in interest and other income, net, related to the changes in the cash surrender value of the plan assets and an operating expense of $11,000 related to the changes in the fair value of the plan liabilities.