Note 7 - Cash, Cash Equivalents and Investments

6 Months Ended

Jun. 30, 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
	June 30, 2014		December 31, 2013
Cash, cash equivalents and investments:
Cash	$	76,899	$	62,625
Money market funds		30,964		35,588
U.S. treasuries and government agency bonds		133,012		128,126
Auction-rate securities backed by student-loan notes		9,848		9,860
Total cash, cash equivalents and investments	$	250,723	$	236,199

Reported as:	June 30, 2014		December 31, 2013
Cash and cash equivalents	$	107,863	$	101,213
Short-term investments		133,012		125,126
Long-term investments		9,848		9,860
Total cash, cash equivalents and investments	$	250,723	$	236,199

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

	June 30, 2014		December 31, 2013
Due in less than 1 year	$	86,825	$	95,509
Due in 1 - 5 years		46,187		29,617
Due in greater than 5 years		9,848		9,860
	$	142,860	$	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 June 30, 2014
	Adjusted Cost		Unrealized Gains		Unrealized Losses			Total Fair Value		Fair Value of Investments in Unrealized Loss Position
Money market funds	$	30,964	$	-	$	-		$	30,964	$	-
U.S. treasuries and government agency bonds		132,996		31		(15	)		133,012		39,607
Auction-rate securities backed by student-loan notes		10,220		-		(372	)		9,848		9,848
	$	174,180	$	31	$	(387	)	$	173,824	$	49,455

	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 June 30, 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	$	30,964	$	30,964	$	-	$	-
U.S. treasuries and government agency bonds		133,012		-		133,012		-
Auction-rate securities backed by student-loan notes		9,848		-		-		9,848
	$	173,824	$	30,964	$	133,012	$	9,848

	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
Change in unrealized loss included in other comprehensive income		(17	)
Ending balance at March 31, 2014		9,843
Change in unrealized loss included in other comprehensive income		5
Ending balance at June 30, 2014	$	9,848

As of June 30, 2014, the Company’s investment portfolio included $9.8 million in government-backed student loan auction-rate securities, net of impairment charges of $402,000, of which $372,000 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. To determine the fair value of the auction-rate securities, the Company used a discounted cash flow model with the following assumptions:

	June 30, 2014			December 31, 2013
Time-to-liquidity (months)		24			24
Expected return		2.7%			2.5%
Discount rate	3.5%	-	8.3%	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 June 30, 2014 and December 31, 2013, the plan assets totaled $3.1 million and $0.6 million, and the plan liabilities totaled $3.1 million and $0.6 million, respectively.