5. INVESTMENTS

Investments from our continuing operations consist of the following as of December 31, 2014 and 2013 (dollars in thousands):


	December 31, 2014
			Gross Unrealized
	Cost		Gain		(Loss)			Fair Value
Short-term investments (available for sale):
Municipal bonds	$	6,880	$	1	$	(56	)	$	6,825
Non-governmental debt securities		98,400		1		(271	)		98,130
Treasury and federal agencies		17,928		6		(31	)		17,903

Total short-term investments		123,208		8		(358	)		122,858

Long-term investments (available for sale):
Municipal bond		7,850		—		(476	)		7,374

Total investments (available for sale)	$	131,058	$	8	$	(834	)	$	130,232


	December 31, 2013
			Gross Unrealized
	Cost		Gain		(Loss)			Fair Value
Short-term investments (available for sale):
U.S. Treasury bills	$	31,591	$	1	$	—		$	31,592
Long-term investments (available for sale):
Municipal bond		7,850		—		(476	)		7,374

Total investments (available for sale)	$	39,441	$	1	$	(476	)	$	38,966

In the table above, unrealized holding losses as of December 31, 2014 relate to short-term investments that have been in a continuous unrealized loss position for less than one year. The table also includes an unrealized holding loss, greater than one year, that relates to our long-term investment in a municipal bond, which is an auction rate security (“ARS”).

Our long-term investment in a municipal bond is comprised of debt obligations issued by states, cities, counties, and other governmental entities, which earn federally tax-exempt interest. Our investment in ARS has a stated term to maturity of greater than one year, and as such, we classify our investment in ARS as non-current on our consolidated balance sheets within other assets. Auctions can “fail” when the number of sellers of the security exceeds the buyers for that particular auction period. In the event that an auction fails, the interest rate resets at a rate based on a formula determined by the individual security. The ARS for which auctions have failed continues to accrue interest and is auctioned on a set interval until the auction succeeds, the issuer calls the security, or it matures. As of December 31, 2014, we have determined this investment is at risk for impairment due to the nature of the liquidity of the market over the past several years. Cumulative unrealized losses as of December 31, 2014 amount to $0.5 million and are reflected within accumulated other comprehensive loss as a component of stockholders’ equity. We believe this impairment is temporary, as we do not intend to sell the investment and it is unlikely we will be required to sell the investment before recovery of its amortized cost basis.

Our non-governmental debt securities primarily consist of corporate bonds and commercial paper. Our treasury and federal agencies primarily consist of U.S. Treasury bills and federal home loan debt securities. We do not intend to sell our investments in these securities and it is not likely that we will be required to sell these investments before recovery of the amortized cost basis.

A schedule of available-for-sale investments segregated by their original stated terms to maturity as of December 31, 2014 and 2013, are as follows (dollars in thousands):


	Less than one year		One to five years		Five to ten years		Greater than ten years		Total
Original stated term to maturity of available-for-sale-investments as of December 31, 2014	$	77,177	$	44,182	$	211	$	8,662	$	130,232
Original stated term to maturity of available-for-sale-investments as of December 31, 2013	$	31,592	$	—	$	—	$	7,374	$	38,966

Realized gains or losses resulting from sales of investments during the years ended December 31, 2014, 2013 and 2012 were not significant.

Fair Value Measurements

FASB ASC Topic 820 – Fair Value Measurements establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

As of December 31, 2014, we held investments that are required to be measured at fair value on a recurring basis. These investments (available-for-sale) consist of non-governmental debt securities, treasury and federal agencies and municipal bonds that are publicly traded and for which market prices are readily available, and our investment in an ARS. Available for sale securities included in Level 2 are estimated based on observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. During the first quarter of 2014, we reclassified our investments in U.S Treasury bills from Level 1 classification to Level 2. The fair value for these investments was not based on identical assets as of March 31, 2014 which resulted in this reclassification. Our investment in an ARS is categorized as Level 3 and fair value is estimated utilizing a discounted cash flow analysis as of December 31, 2014 which considers, among other items, the collateralization underlying the security investment, the credit worthiness of the counterparty, the time of expected future cash flows, and the expectation of the next time the security is expected to have a successful auction. The auction event for our ARS investment has failed for multiple years. The security was also compared, when possible, to other observable market data with similar characteristics.

Investments measured at fair value on a recurring basis subject to the disclosure requirements of FASB ASC Topic 820 – Fair Value Measurements at December 31, 2014 and 2013 were as follows (dollars in thousands):


	As of December 31, 2014
	Level 1		Level 2		Level 3		Total
Municipal bonds	$	—	$	6,825	$	7,374	$	14,199
Non-governmental debt securities		—		98,130		—		98,130
Treasury and federal agencies		—		17,903		—		17,903

Totals	$	—	$	122,858	$	7,374	$	130,232


	As of December 31, 2013
	Level 1		Level 2		Level 3		Total
U.S. Treasury bills	$	31,592	$	—	$	—	$	31,592
Municipal bond		—		—		7,374		7,374

Totals	$	31,592	$	—	$	7,374	$	38,966

The following table presents a rollforward of our assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as defined in FASB ASC Topic 820 for the year to date ended December 31, 2014 (dollars in thousands):


Balance at December 31, 2013	$	7,374
Unrealized loss		—

Balance at December 31, 2014	$	7,374

See Note 7 “Property and Equipment” and Note 9 “Goodwill and Other Intangible Assets” for further information regarding non-recurring fair value measurements.

Equity Method Investment

Our investment in an equity affiliate, which is recorded within other noncurrent assets on our consolidated balance sheet, represents an international investment in a private company. As of December 31, 2014, our investment in an equity affiliate equated to a 30.7%, or $4.8 million, non-controlling interest in CCKF, a Dublin-based educational technology company providing intelligent adaptive systems to power the delivery of individualized and personalized learning. During the fourth quarter of 2014, we increased our investment in CCKF to 30.7% through a $3.2 million additional investment, thus requiring us to record this investment under the equity method. Prior to our additional investment, we accounted for our investment in CCKF as a cost method investment because we had less than a 20% interest and did not have significant influence. As a result of this increase in investment, we recorded a retroactive adjustment to account for the investment and applied the equity method for all prior periods in which the investment was held in accordance with ASC Topic 323 – Investments – Equity Method and Joint Ventures. Accordingly, we did not adjust prior period financial statements or information as the impact of the change in accounting method was not material to any individual year. The retroactive cumulative adjustment increased retained earnings as of January 1, 2014 by $0.1 million. Additionally, we recorded less than $0.1 million of income related to our proportionate investment in CCKF for the year ended December 31, 2014.