Investments

12 Months Ended

Dec. 31, 2011

Investments [Abstract]

Investments

4. INVESTMENTS

Available-for-sale Investments

Investments in available-for-sale securities at fair value were as follows for the periods ended (in thousands):

	December 31, 2011									December 31, 2010
Description of the Securities	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Agency securities	$	641,997	$	4,506	$	(279	)	$	646,224	$	728,177	$	2,134	$	(780	)	$	729,531
Corporate securities	392,365		618		(1,190		)	391,793		453,279		933		(1,107		)	453,105
Municipal securities	80,004		57		(35		)	80,026		28,681		8		(30		)	28,659
Government securities	26,056		206		—			26,262		77,976		245		(19		)	78,202
Total	$	1,140,422	$	5,387	$	(1,504	)	$	1,144,305	$	1,288,113	$	3,320	$	(1,936	)	$	1,289,497

The change in net unrealized gains (losses) on available-for-sale securities recorded in other comprehensive income includes unrealized gains (losses) that arose from changes in market value of specifically identified securities that were held during the period, gains (losses) that were previously unrealized, but have been recognized in current period net income due to sales, as well as prepayments of available-for-sale investments purchased at a premium. This reclassification has no effect on total comprehensive income or equity and was immaterial for all periods presented.

The average remaining maturities of the Company’s short-term and long-term available-for-sale investments at December 31, 2011 were approximately five months and eight years, respectively.

Realized Gains and Losses on Available-for-sale Investments

For the years ended December 31, 2011 and 2010, the Company had realized gains on the sales of available-for-sale investments of $0.4 million and $0.2 million, respectively. For the years ended December 31, 2011 and 2010, the Company had realized losses on available-for-sale investments of $1.8 million and $2.4 million, respectively, primarily related to prepayments at par of securities purchased at a premium. All realized gains and losses related to the sales of available-for-sale investments are included in other (expense) income, net, in the accompanying consolidated statements of income.

The Company continues to monitor its overall investment portfolio and if the credit ratings of the issuers of its investments deteriorate or if the issuers experience financial difficulty, including bankruptcy, the Company may be required to make adjustments to the carrying value of the securities in its investment portfolio and recognize impairment charges for declines in fair value that are determined to be other-than-temporary.

Unrealized Losses on Available-for-Sale Investments

The gross unrealized losses on the Company’s available-for-sale investments that are not deemed to be other-than-temporarily impaired were $1.5 million and $1.9 million as of December 31, 2011 and 2010, respectively. The decrease in gross unrealized losses when comparing December 31, 2011 to December 31, 2010 was primarily due to changes in interest rates. Also contributing to the decrease in gross unrealized losses was the maturity in September 2011 of the Company’s investment issued by AIG Matched Funding Corporation (the “AIG Capped Floater”). The Company received the $50.0 million face value of the AIG Capped Floater upon maturity. Because the Company does not intend to sell any of its investments in an unrealized loss position and it is more likely than not that it will not be required to sell the securities before the recovery of its amortized cost basis, which may not occur until maturity, it does not consider the securities to be other-than-temporarily impaired.

Cost Method Investments

The Company held direct investments in privately-held companies of approximately $32.2 million and $21.3 million as of December 31, 2011 and 2010, respectively, which are accounted for based on the cost method and are included in other assets in the accompanying consolidated balance sheets. The Company monitors these investments for indicators of impairment. If the Company determines that an other-than-temporary impairment has occurred, it will write-down the investment to its fair value. The Company determined one of its cost method investments was impaired and recorded a charge of $3.5 million during the third quarter of 2011 which was included in other (expense) income, net in the accompanying consolidated statements of income. See Note 5 for more information.