4. INVESTMENTS

Investments of our continuing operations consist of the following as of December 31, 2016 and 2015 (dollars in thousands):

	December 31, 2016
			Gross Unrealized
	Cost		Gain		(Loss)			Fair Value
Short-term investments (available for sale):
Municipal bonds	$	4,050	$	-	$	-		$	4,050
Non-governmental debt securities		107,305		22		(113	)		107,214
Treasury and federal agencies		36,480		10		(73	)		36,417
Total short-term investments		147,835		32		(186	)		147,681
Restricted short-term investments (available for sale):
Non-governmental debt securities		8,597		-		-			8,597
Total investments (available for sale)	$	156,432	$	32	$	(186	)	$	156,278

	December 31, 2015
			Gross Unrealized
	Cost		Gain		(Loss)			Fair Value
Short-term investments (available for sale):
Municipal bonds	$	1,500	$	-	$	(11	)	$	1,489
Non-governmental debt securities		76,999		-		(242	)		76,757
Treasury and federal agencies		36,779		3		(127	)		36,655
Total short-term investments		115,278		3		(380	)		114,901
Long-term investments (available for sale):
Municipal bond		7,850		-		(476	)		7,374
Total investments (available for sale)	$	123,128	$	3	$	(856	)	$	122,275

In the table above, unrealized holding gains (losses) as of December 31, 2016 relate to short-term investments that have been in a continuous unrealized gain (loss) position for less than one year.

Our unrestricted 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.

Our restricted short-term investments are comprised entirely of certificates of deposit, which secure our letters of credit. Prior to the second quarter of 2016, these funds were held as cash by the letter of credit issuer and reported by the Company as restricted cash on our consolidated balance sheets.

During 2016, our long-term municipal bond investment was called by the issuer at face value. The cumulative unrealized loss of $0.5 million was subsequently reversed out of accumulated other comprehensive loss, a component of stockholders’ equity.

A schedule of available-for-sale investments segregated by their original stated terms to maturity as of December 31, 2016 and 2015 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, 2016

113,040

39,459

800

2,979

156,278

Original stated term to maturity of available-for-sale-

investments as of December 31, 2015

71,000

43,552

7,723

122,275

Realized gains or losses resulting from sales of investments during the years ended December 31, 2016, 2015 and 2014 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, 2016, we held investments that are required to be measured at fair value on a recurring basis. These investments (available-for-sale) consist of municipal bonds, non-governmental debt securities, and treasury and federal agencies securities. Available for sale securities included in Level 1 are valued at quoted prices in active markets for identical assets and liabilities. 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.

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, 2016 and 2015 were as follows (dollars in thousands):

	As of December 31, 2016
	Level 1		Level 2		Level 3		Total
Municipal bonds	$	-	$	4,050	$	-	$	4,050
Non-governmental debt securities		33,597		82,214		-		115,811
Treasury and federal agencies		-		36,417		-		36,417
Totals	$	33,597	$	122,681	$	-	$	156,278

	As of December 31, 2015
	Level 1		Level 2		Level 3		Total
Municipal bonds	$	-	$	1,489	$	7,374	$	8,863
Non-governmental debt securities		-		76,757		-		76,757
Treasury and federal agencies		-		36,655		-		36,655
Totals	$	-	$	114,901	$	7,374	$	122,275

Equity Method Investment

Our investment in an equity affiliate, which is recorded within other noncurrent assets on our consolidated balance sheets, represents an international investment in a private company. As of December 31, 2016, our investment in an equity affiliate equated to a 30.7%, or $3.1 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. For the years ended December 31, 2016, 2015 and 2014, we recorded approximately $0.9 million of loss, $0.3 million of loss and less than $0.1 million of income, respectively, related to our proportionate investment in CCKF within miscellaneous income (expense) on our consolidated statements of (loss) income and comprehensive (loss) income.

We make periodic operating maintenance payments related to proprietary rights that we use in our intellipath^TM adaptive learning technology. The total fees paid to CCKF for the years ended December 31, 2016, 2015 and 2014 were as follows (dollars in thousands):

	Maintenance Fee Payments
For the year ended December 31, 2016	$	1,375
For the year ended December 31, 2015	$	1,390
For the year ended December 31, 2014 ⁽¹⁾	$	1,972

_______________________

(1)

Maintenance fee payments through October 2014 were incurred prior to an increase in ownership for CCKF. Through October 2014, CCKF was accounted for as a cost method investment.