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NOTE 7—MARKETABLE SECURITIES
At December 31, 2011, available-for-sale marketable securities are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortized
Cost |
|
Gross
Unrealized
Gains |
|
Gross
Unrealized
Losses |
|
Estimated
Fair Value |
|
|
|
(In thousands)
|
|
|
Corporate debt securities |
|
$ |
48,621 |
|
$ |
99 |
|
$ |
(15 |
) |
$ |
48,705 |
|
|
States of the U.S. and state political subdivisions |
|
|
111,758 |
|
|
587 |
|
|
(22 |
) |
|
112,323 |
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| |
|
|
|
|
|
|
|
|
|
|
Total debt securities |
|
|
160,379 |
|
|
686 |
|
|
(37 |
) |
|
161,028 |
|
|
Equity security |
|
|
4,656 |
|
|
11 |
|
|
— |
|
|
4,667 |
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| |
|
|
|
|
|
|
|
|
|
|
Total marketable securities |
|
$ |
165,035 |
|
$ |
697 |
|
$ |
(37 |
) |
$ |
165,695 |
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| |
|
|
|
|
|
|
|
|
|
At December 31, 2010, available-for-sale marketable securities are as follows:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortized
Cost |
|
Gross
Unrealized
Gains |
|
Gross
Unrealized
Losses |
|
Estimated
Fair Value |
|
|
|
(In thousands)
|
|
|
Corporate debt securities |
|
$ |
237,406 |
|
$ |
773 |
|
$ |
(16 |
) |
$ |
238,163 |
|
|
States of the U.S. and state political subdivisions |
|
|
110,478 |
|
|
373 |
|
|
(230 |
) |
|
110,621 |
|
|
U.S. Treasury securities |
|
|
199,881 |
|
|
18 |
|
|
— |
|
|
199,899 |
|
| |
|
|
|
|
|
|
|
|
|
|
Total debt securities |
|
|
547,765 |
|
|
1,164 |
|
|
(246 |
) |
|
548,683 |
|
|
Equity security |
|
|
12,896 |
|
|
2,418 |
|
|
— |
|
|
15,314 |
|
| |
|
|
|
|
|
|
|
|
|
|
Total marketable securities |
|
$ |
560,661 |
|
$ |
3,582 |
|
$ |
(246 |
) |
$ |
563,997 |
|
| |
|
|
|
|
|
|
|
|
|
The net unrealized gains in the tables above are included in "Accumulated other comprehensive (loss) income" in the accompanying consolidated balance sheet.
The contractual maturities of debt securities classified as available-for-sale at December 31, 2011 are as follows:
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|
|
|
|
|
|
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Amortized
Cost |
|
Estimated
Fair Value |
|
|
|
(In thousands)
|
|
|
Due in one year or less |
|
$ |
68,375 |
|
$ |
68,545 |
|
|
Due after one year through five years |
|
|
92,004 |
|
|
92,483 |
|
| |
|
|
|
|
|
|
Total |
|
$ |
160,379 |
|
$ |
161,028 |
|
| |
|
|
|
|
|
The following table summarizes investments in marketable debt securities (twelve in total at December 31, 2011) that have been in a continuous unrealized loss position for less than twelve months:
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|
|
|
|
|
|
|
|
December 31, |
|
|
|
2011 |
|
2010 |
|
|
|
(In thousands)
|
|
|
|
Fair
Value |
|
Gross
Unrealized
Losses |
|
Fair
Value |
|
Gross
Unrealized
Losses |
|
|
Corporate debt securities |
|
$ |
12,920 |
|
$ |
(15 |
) |
$ |
34,552 |
|
$ |
(16 |
) |
|
States of the U.S. and state political subdivisions |
|
|
11,711 |
|
|
(22 |
) |
|
39,171 |
|
|
(230 |
) |
| |
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
24,631 |
|
$ |
(37 |
) |
$ |
73,723 |
|
$ |
(246 |
) |
| |
|
|
|
|
|
|
|
|
|
At December 31, 2011 and 2010, there are no investments in marketable securities that have been in a continuous unrealized loss position for twelve months or longer.
Substantially all of the Company's marketable debt securities are rated investment grade. The gross unrealized losses on the marketable debt securities relate to changes in interest rates. Because the Company does not intend to sell any marketable debt securities and it is not more likely than not that the Company will be required to sell any marketable debt securities before recovery of their amortized cost bases, which may be maturity, the Company does not consider any of its marketable debt securities to be other-than-temporarily impaired at December 31, 2011.
The following table presents the proceeds from maturities and sales of available-for-sale marketable securities and the related gross realized gains and losses:
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December 31, |
|
|
|
2011 |
|
2010 |
|
2009 |
|
|
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(In thousands)
|
|
|
Proceeds from maturities and sales of available-for-sale marketable securities |
|
$ |
600,149 |
|
$ |
768,650 |
|
$ |
293,629 |
|
|
Gross realized gains |
|
|
2,482 |
|
|
4,802 |
|
|
42,372 |
|
|
Gross realized losses |
|
|
(41 |
) |
|
(19 |
) |
|
(12,414 |
) |
Gross realized gains and losses from the maturities and sales of available-for-sale marketable securities are included in "Other income (expense), net" in the accompanying consolidated statement of operations.
Unrealized gains, net of tax, reclassified out of accumulated other comprehensive income into other income (expense), net related to the maturities and sales of available-for-sale securities for the years ended December 31, 2011, 2010 and 2009 were $2.8 million, $3.2 million and $0.7 million, respectively.
Investment in ARO
As part of the consideration for the sale of HSE to ARO on June 19, 2007, IAC received approximately 5.5 million shares of ARO stock plus additional consideration in the form of a contingent value right ("CVR") (See Note 9 for additional information on the CVR). During 2009, the Company sold its 5.5 million shares of ARO stock, resulting in a pre-tax loss of $12.3 million, which is included in the gross realized losses for the year ended December 31, 2009 disclosed above. Prior to the sale of its last 1.1 million shares of ARO stock, the Company concluded that the decline in the stock price of these remaining shares was other-than-temporary, due in part, to ARO's insolvency filing on June 9, 2009, and recorded impairment charges totaling $4.6 million. |