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Investment Securities | 12 Months Ended
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Dec. 31, 2013
Investment Securities |
Investment Securities | Note 5. Investment Securities Our marketable investment securities, restricted cash and cash equivalents, and other investments consisted of the following:
|  | As of December 31, |
--- | --- | --- | ---
|  | 2013 |  | 2012 |
|  | (In thousands) |
Marketable investment securities—current: |  |  |  |  |  |  |
Corporate bonds |  | $ | 833,791 |  | $ | 654,096 |
VRDNs |  |  | 34,705 |  |  | 66,145 |
Strategic equity securities |  |  | 33,613 |  |  | 56,288 |
Other |  |  | 84,424 |  |  | 39,422 |
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Total marketable investment securities—current |  |  | 986,533 |  |  | 815,951 |
Restricted marketable investment securities(1) |  |  | 7,965 |  |  | 7,529 |
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Total |  |  | 994,498 |  |  | 823,480 |
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Restricted cash and cash equivalents(1) |  |  | 8,172 |  |  | 21,516 |
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Other investments—noncurrent: |  |  |  |  |  |  |
Cost method |  |  | 25,977 |  |  | 27,711 |
Equity method |  |  | 143,794 |  |  | 155,500 |
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Total other investments—noncurrent |  |  | 169,771 |  |  | 183,211 |
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Total marketable investment securities, restricted cash and cash equivalents, and other investments |  | $ | 1,172,441 |  | $ | 1,028,207 |
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(1) Restricted marketable investment securities and restricted cash and cash equivalents are included in "Restricted cash and marketable investment securities" in our Consolidated Balance Sheets. Marketable Investment Securities Our marketable investment securities portfolio consists of various debt and equity instruments, all of which are classified as available-for-sale. Corporate bonds Our corporate bond portfolio includes debt instruments issued by individual corporations, primarily in the industrial and financial services industries. Variable rate demand notes ("VRDNs") VRDNs are long-term floating rate bonds with embedded put options that allow the bondholder to sell the security at par plus accrued interest. All of the put options are secured by a pledged liquidity source. Our VRDN portfolio is comprised of investments in municipalities and corporations, which are backed by financial institutions or other highly rated companies that serve as the pledged liquidity source. While they are classified as marketable investment securities, the put option allows VRDNs to be liquidated generally on a same day or on a five business day settlement basis. Strategic Equity Securities Our strategic investment portfolio consists of investments in shares of common stock of public companies, which are highly speculative and have experienced and continue to experience volatility. The value of our investment portfolio depends on the value of such shares of common stock. We did not receive any dividend income for the years ended December 31, 2013 and 2011. For the year ended December 31, 2012, we received $46.0 million in dividend income from one of our strategic investments. Other Our other current marketable investment securities portfolio includes investments in various debt instruments, including government bonds. Restricted Cash and Marketable Investment Securities As of December 31, 2013 and 2012, our restricted marketable investment securities, together with our restricted cash, included amounts required as collateral for our letters of credit or surety bonds. Other Investments—Noncurrent We have several strategic investments in certain equity securities that are accounted for using either the equity or the cost method of accounting. Our ability to realize value from our strategic investments in companies that are not publicly traded depends on the success of those companies' businesses and their ability to obtain sufficient capital to execute their business plans. Because private markets are not as liquid as public markets, there is also increased risk that we will not be able to sell these investments, or that when we desire to sell them we will not be able to obtain fair value for them. As of December 31, 2013 and 2012, our equity method investments included $18.0 and $34.5 million, respectively, for our investment in DISH Digital Holding L.L.C. ("DISH Digital"), a joint venture between us and DISH Network. The carrying amount of our investment reflects the $44.7 million aggregate carrying amount of cash and certain noncash assets that we contributed to DISH Digital upon its formation on July 1, 2012 in exchange for a one-third equity interest in DISH Digital, less our equity in the net loss of DISH Digital of $16.5 million and $10.2 million for the years ended December 31, 2013 and 2012, respectively. See Note 19 for additional information about our investment in DISH Digital. Unrealized Gains (Losses) on Marketable Investment Securities The components of our available-for-sale investments are summarized in the table below.
|  |  |  | Unrealized |  |  |
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|  | Amortized Cost |  | Estimated Fair Value |
|  | Gains |  | Losses |
|  | (In thousands) |
As of December 31, 2013 |  |  |  |  |  |  |  |  |  |  |  |  |
Debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate bonds |  | $ | 833,888 |  | $ | 227 |  | $ | (324 | ) | $ | 833,791 |
VRDNs |  |  | 34,705 |  |  | — |  |  | — |  |  | 34,705 |
Other (including restricted) |  |  | 92,876 |  |  | 14 |  |  | (501 | ) |  | 92,389 |
Equity securities—strategic |  |  | 15,272 |  |  | 18,341 |  |  | — |  |  | 33,613 |
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Total marketable investment securities |  | $ | 976,741 |  | $ | 18,582 |  | $ | (825 | ) | $ | 994,498 |
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As of December 31, 2012 |  |  |  |  |  |  |  |  |  |  |  |  |
Debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate bonds |  | $ | 653,812 |  | $ | 591 |  | $ | (307 | ) | $ | 654,096 |
VRDNs |  |  | 66,145 |  |  | — |  |  | — |  |  | 66,145 |
Other (including restricted) |  |  | 46,946 |  |  | 5 |  |  | — |  |  | 46,951 |
Equity securities—strategic |  |  | 21,214 |  |  | 35,074 |  |  | — |  |  | 56,288 |
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Total marketable investment securities |  | $ | 788,117 |  | $ | 35,670 |  | $ | (307 | ) | $ | 823,480 |
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As of December 31, 2013, restricted and non-restricted marketable investment securities included debt securities of $885.1 million with contractual maturities of one year or less and $75.8 million with contractual maturities greater than one year. We may realize proceeds from certain investments prior to their contractual maturity as a result of our ability to sell these securities prior to their contractual maturity. Marketable Investment Securities in a Loss Position The following table reflects the length of time that our available-for-sale securities have been in an unrealized loss position. We do not intend to sell these securities before they recover or mature, and it is more likely than not that we will hold these securities until they recover or mature. In addition, we are not aware of any specific factors indicating that the underlying issuers of these securities would not be able to pay interest as it becomes due or repay the principal at maturity. Therefore, we believe that these changes in the estimated fair values of these securities are primarily related to temporary market fluctuations.
|  | As of December 31, |
--- | --- | --- | ---
|  | 2013 |  | 2012 |
|  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |
|  | (In thousands) |
Less than 12 months |  | $ | 571,592 |  | $ | (825 | ) | $ | 275,587 |  | $ | (288 | )
12 months or more |  |  | — |  |  | — |  |  | 12,963 |  |  | (19 | )
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Total |  | $ | 571,592 |  | $ | (825 | ) | $ | 288,550 |  | $ | (307 | )
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Realized Gains (Losses) on Marketable Investment Securities We recognized gains from the sales of our available-for-sale marketable investment securities of $36.3 million, $175.2 million and $6.7 million for the years ended December 31, 2013, 2012 and 2011, respectively. We recognized minimal losses from the sales of our available-for-sale marketable investment securities for the years ended December 31, 2013, 2012 and 2011. Proceeds from sales of our available-for-sale marketable investment securities totaled $177.5 million, $601.3 million and $1.54 billion for the years ended December 31, 2013, 2012 and 2011, respectively. Fair Value Measurements Our current marketable investment securities are measured at fair value on a recurring basis as summarized in the table below. As of December 31, 2013 and 2012, we did not have investments that were categorized within Level 3 of the fair value hierarchy.
|  | As of December 31, |
--- | --- | --- | ---
|  | 2013 |  | 2012 |
|  | Total |  | Level 1 |  | Level 2 |  | Total |  | Level 1 |  | Level 2 |
|  | (In thousands) |
Cash equivalents (including restricted) |  | $ | 548,714 |  | $ | 49,338 |  | $ | 499,376 |  | $ | 533,943 |  | $ | 23,621 |  | $ | 510,322 |
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Debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate bonds |  | $ | 833,791 |  | $ | — |  | $ | 833,791 |  | $ | 654,096 |  | $ | — |  | $ | 654,096 |
VRDNs |  |  | 34,705 |  |  | — |  |  | 34,705 |  |  | 66,145 |  |  | — |  |  | 66,145 |
Other (including restricted) |  |  | 92,389 |  |  | — |  |  | 92,389 |  |  | 46,951 |  |  | — |  |  | 46,951 |
Equity securities—strategic |  |  | 33,613 |  |  | 33,613 |  |  | — |  |  | 56,288 |  |  | 56,288 |  |  | — |
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Total marketable investment securities |  | $ | 994,498 |  | $ | 33,613 |  | $ | 960,885 |  | $ | 823,480 |  | $ | 56,288 |  | $ | 767,192 |
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During 2011, we disposed of investments that were accounted for using the fair-value method and we reported net gains of $15.9 million in "Gains on investments accounted for at fair value, net" in our Consolidated Statements of Operations and Comprehensive Income (Loss) for the year ended December 31, 2011. In 2013 and 2012, we did not have any investments that were accounted for using the fair value method.

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- Definition The entire disclosure for cash, cash equivalents, investments in debt and equity instruments (including cost and equity investees and related income statement amounts), equity and cost method investments, investments in joint ventures and any other investment. + References No definition available. + Details
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