Note 7 - Cash, Cash Equivalents and Investments

3 Months Ended

Mar. 31, 2014

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

7. 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
	March 31, 2014		December 31, 2013
Cash, cash equivalents and investments:
Cash	$	62,857	$	62,625
Money market funds		26,028		35,588
U.S. treasuries and government agency bonds		139,750		128,126
Auction-rate securities backed by student-loan notes		9,843		9,860
Total cash, cash equivalents and investments	$	238,478	$	236,199

Reported as:	March 31, 2014		December 31, 2013
Cash and cash equivalents	$	88,885	$	101,213
Short-term investments		139,750		125,126
Long-term investments		9,843		9,860
Total cash, cash equivalents and investments	$	238,478	$	236,199

For the three months ended March 31, 2014, the Company did not redeem any auction-rate securities. For the three months ended March 31, 2013, the Company redeemed $25,000 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):

	March 31, 2014		December 31, 2013
Due in less than 1 year	$	89,651	$	95,509
Due in 1 - 5 years		50,099		29,617
Due in greater than 5 years		9,843		9,860
	$	149,593	$	134,986

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

	As of March 31, 2014
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Total Fair Value		Fair Value of Investments in Unrealized Loss Position
Money market funds	$	26,028	$	-	$	-		$	26,028	$	-
U.S. treasuries and government agency bonds		139,743		32		(25	)		139,750		34,000
Auction-rate securities backed by student-loan notes		10,220		-		(377	)		9,843		9,843
	$	175,991	$	32	$	(402	)	$	175,621	$	43,843

	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

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

	Fair Value Measurement at March 31, 2014
			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	$	26,028	$	26,028	$	-	$	-
U.S. treasuries and government agency bonds		139,750		-		139,750		-
Auction-rate securities backed by student-loan notes		9,843		-		-		9,843
	$	175,621	$	26,028	$	139,750	$	9,843

	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

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):

Balance at January 1, 2014	$	9,860
Sales and settlement at par		-
Change in unrealized loss included in other comprehensive income		(17	)
Ending balance at March 31, 2014	$	9,843

As of March 31, 2014, the Company’s investment portfolio included $9.8 million in government-backed student loan auction-rate securities, net of impairment charges of $407,000, of which $377,000 was temporary and $30,000 was recorded as other-than-temporary. This compares to an investment balance as of December 31, 2013 of $9.9 million, net of impairment charges of $390,000, of which $360,000 was temporary and $30,000 was recorded as other-than-temporary.

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:

	March 31, 2014			December 31, 2013
Time-to-liquidity (months)		24			24
Expected return		2.7%			2.5%
Discount rate	3.6%	-	8.4%	3.3%	-	8.1%

Deferred Compensation Plan:

The Company has a non-qualified, unfunded deferred compensation plan, which became effective in July 2013 and 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. The Company does not make contributions to the plan or guarantee returns on the investments. The Company is responsible for the plan’s administrative expenses. Participant deferrals and investment gains and losses remain as the Company’s liabilities and the underlying assets are subject to claims of general creditors.

As of March 31, 2014 and December 31, 2013, the plan assets totaled $2.6 million and $0.6 million, and the plan liabilities totaled $2.6 million and $0.6 million, respectively. For the three months ended March 31, 2014, the Company recorded an income of $36,000 in interest and other income (expense), net, related to the changes in the cash surrender value of the plan assets and an operating expense of $13,000 related to the changes in the fair value of the plan liabilities.