INVESTMENTS

The cost and carrying value of available-for-sale investments were as follows (in thousands):



December 31, 2014	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Carrying Value
Debt securities: corporate bonds	$	8,909	$	198	$	(65	)	$	9,042
Marketable equity securities	14,780		7,335		(125		)	21,990
Total	$	23,689	$	7,533	$	(190	)	$	31,032



December 31, 2013	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Carrying Value
Debt securities: corporate bonds	$	8,988	$	213	$	(29	)	$	9,172
Marketable equity securities	31,023		10,835		(450		)	41,408
Total	$	40,011	$	11,048	$	(479	)	$	50,580

The Company purchases marketable debt and equity securities in the U.S. and abroad. Approximately $5.6 million and $23.3 million of the Company’s available-for-sale investments at December 31, 2014, and 2013, respectively, were invested internationally, primarily in Switzerland and New Zealand.

The amortized cost and carrying value of investments in debt securities, by contractual maturity, are shown below. Actual maturity dates may differ from contractual maturity dates because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties (in thousands):



	December 31, 2014				December 31, 2013
	Amortized Cost		Carrying Value		Amortized Cost		Carrying Value
Due in one year or less	$	3,786	$	3,958	$	68	$	68
Due after one year through five years	3,310		3,255		5,981		6,178
Due after five years	1,813		1,829		2,939		2,926
	$	8,909	$	9,042	$	8,988	$	9,172

Included in other income in the accompanying consolidated financial statements is the pre-tax net realized gain or loss on investments (in thousands):



	Year Ended December 31,
	2014			2013			2012
Gross realized gains:
Debt securities	$	7		$	3		$	845
Equity securities and other investments	5,545			24,110			1,173
Total gain	5,552			24,113			2,018
Gross realized losses:
Debt securities	(116		)	(152		)	(2		)
Equity securities and other investments	(1,781		)	(319		)	(2,136		)
Total loss	(1,897		)	(471		)	(2,138		)
Net realized gain (loss)	$	3,655		$	23,642		$	(120	)

Significant Realized Gains:

The realized gains reported in 2013 were primarily due to the $21.2 million gain on the merger transaction between Spigit and Mindjet.

The following table summarizes the market value of those investments in an unrealized loss position for periods less than and greater than 12 months (in thousands):



	December 31, 2014				December 31, 2013
Less than 12 months	Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss
Debt securities: corporate bonds	$	3,228	$	65
Marketable equity securities	1,807		122		$	4,453	$	254
Total	$	5,035	$	187	$	4,453	$	254



	December 31, 2014				December 31, 2013
Greater than 12 months	Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss
Debt securities: corporate bonds					$	5,744	$	29
Marketable equity securities	$	9	$	3	2,368		196
Total	$	9	$	3	$	8,112	$	225

Debt Securities

At December 31, 2014, there were unrealized losses on certain bonds held by the Company. The Company does not consider those bonds to be other-than-temporarily impaired because the Company expects to hold, and will not be required to sell, these particular bonds, and expects to recover the entire amortized cost basis at maturity. There were no impairment losses recorded on debt securities during the three years ended December 31, 2014.

Marketable Equity Securities

At December 31, 2014, the Company reviewed all of its equity securities in an unrealized loss position and concluded certain securities were not other-than-temporarily impaired as the declines were not of sufficient duration and severity, and publicly-available financial information did not indicate impairment. The primary cause of the losses on those securities was normal market volatility. An impairment loss was recorded for those securities that were deemed other-than-temporarily impaired in the period. The Company recorded impairment losses of $275,000, $299,000 and $1.8 million, respectively, for the years ended December 31, 2014, 2013 and 2012.

Other Investments:

The Company owned the following investments that are not classified as available-for-sale (in thousands):



	December 31, 2014				December 31, 2013
	Carrying Value		Voting Interest		Carrying Value		Voting Interest
Investment in Synthonics, cost method	$	2,170	19.6	%	$	2,170	19.9	%

Investment in Mindjet:
Investment in common stock, equity method	$	6,611	15.0	%	$	8,697	15.2	%
Investment in preferred stock, cost method	15,858		13.4	%	17,210		13.6	%
	$	22,469	28.4	%	$	25,907	28.8	%
Total	$	24,639			$	28,077

Investment in Synthonics:

Synthonics, Inc. (“Synthonics”) is a private company co-founded by a member of the Company’s board of directors. The Company’s investment consists of preferred shares as discussed in Note 13 “Related-Party Transactions.”

Investment in Mindjet:

The collective attributes of the Company’s common and preferred stock investment in Mindjet enable the Company to exert significant influence over the operating and financial decisions of Mindjet. The preferred shares are entitled to 1.5 votes per share, are noncumulative, nonparticipating (with certain exceptions), entitled to dividends at a rate of 6% when declared, convertible into 1.5 shares of common stock of Mindjet at the Company’s discretion (and automatically upon certain events), and provided a $7 million liquidation preference. The Company is also contractually entitled to one of the six board seats on Mindjet’s board of directors, of which only five are currently filled. Consequently, the Company accounts for the investment in common stock using the equity method of accounting which resulted in recording a loss in the consolidated statement of operations and comprehensive income or loss within equity in loss of affiliate for the years ended December 31, 2014 and 2013 of $2.1 million and $565,000, respectively. The losses recorded represented approximately 15% of Mindjet’s net loss for the respective period in which the Company owned the investment. At December 31, 2014 and 2013, the Company owned 39.4% and 40.4%, respectively, of the outstanding common stock of Mindjet.

During the year ended December 31, 2014, the Company purchased $2.7 million of convertible debt of Mindjet. The debt security is reported in investments on the consolidated balance sheets. The debt is due in March 2015, bears interest at 10% per year, and may convert to additional common or preferred equity, or potentially cash equal to three times the face value of the debt depending on the nature and valuation of certain future transactions including an offering of Mindjet’s securities in a private or initial public offering, or sale of the company.

During the year ended December 31, 2014, the Company was notified by Mindjet that they were asserting a breach in the representations and warranty made by Spigit in the September 10, 2013 merger agreement. As part of the notification, Mindjet made a claim against the Mindjet shares held by the former Spigit shareholders, including the Company. A partial settlement was reached by the parties in November 2014 and the Company expects final resolution in 2015. The partial settlement was not material to the Company and was paid in shares of Mindjet common and preferred stock. The maximum damages to the Company for the remaining claim is estimated between zero and $1.2 million and any settlement would be paid by the Company in shares of Mindjet. The Company is unable to provide a more meaningful estimate due to the ongoing development of information important to resolving the matter. Consequently, the Company has not accrued any liability related to the claim.

At December 31, 2014, the total carrying value of the Company’s debt and equity investment in Mindjet was $25.1 million and is subject to impairment testing at each reporting period, or more frequently if facts and circumstances indicate the investment may be impaired. During 2014, the Company recorded a $1.1 million impairment loss on the preferred shares as the estimated fair value of such shares was less than the carrying value. The fair value was determined using a 50/50 weighting of the guideline public company method (market approach) and a discounted cash flow method (income approach). Furthermore, it is reasonably possible that given the volatile nature of software businesses that circumstances may change in the future which could require the Company to record additional impairment losses.

The difference between the Company’s equity method carrying value of Mindjet common shares and the amount of underlying equity in net assets is $7.9 million, which is primarily attributable to goodwill and acquired technology.