Fair Value Measurements

6 Months Ended

Jun. 30, 2015

Note 4 — Fair Value Measurements

The Company records and discloses certain financial assets at their estimated fair value. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels as follows:


Level 1	-	Unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2	-	Other inputs that are observable for the asset and liability, either directly or indirectly.
Level 3	-	Inputs that are unobservable.

Assets Measured at Estimated Fair Value on a Recurring Basis

The following table presents information about the Company’s financial assets measured at estimated fair value on a recurring basis. The table indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value as of June 30, 2015 and December 31, 2014:


	Fair Value Measurements Using
	(Level 1)		(Level 2)		(Level 3)		Total
*As of June 30, 2015*
Financial Assets:
Cash and cash equivalents	$	274,729	$	—	$	—	$	274,729

Fixed-maturity securities:
U.S. Treasury and U.S. government agencies		4,056		6,871		—		10,927
Corporate bonds		41,423		982		—		42,405
Asset-backed securities		—		4,163		—		4,163
Mortgage-backed securities		—		14,438		—		14,438
State, municipalities, and political subdivisions		—		82,537		—		82,537
Redeemable preferred stock		10,467		—		—		10,467
Other		—		498		—		498

Total fixed-maturity securities		55,946		109,489		—		165,435
Equity securities		60,331		—		—		60,331

Total available-for-sale securities		116,277		109,489		—		225,766

Total	$	391,006	$	109,489	$	—	$	500,495


	Fair Value Measurements Using
	(Level 1)		(Level 2)		(Level 3)		Total
*As of December 31, 2014*
Financial Assets:
Cash and cash equivalents	$	314,416	$	—	$	—	$	314,416

Fixed-maturity securities:
U.S. Treasury and U.S. government agencies		1,069		1,809		—		2,878
Corporate bonds		22,274		998		—		23,272
Asset-backed securities		—		697		—		697
Mortgage-backed securities		—		3,009		—		3,009
State, municipalities, and political subdivisions		—		57,503		—		57,503
Redeemable preferred stock		9,557		—		—		9,557
Other		—		168		—		168

Total fixed-maturity securities		32,900		64,184		—		97,084
Equity securities		45,550		—		—		45,550

Total available-for-sale securities		78,450		64,184		—		142,634

Total	$	392,866	$	64,184	$	—	$	457,050

Assets and Liabilities Carried at Other Than Fair Value

The following tables present fair value information for assets and liabilities that are carried on the balance sheet at amounts other than fair value as of June 30, 2015 and December 31, 2014:


	Fair Value Measurements Using
	(Level 1)		(Level 2)		(Level 3)		Total
*As of June 30, 2015*
Financial Assets:
Limited partnership investments	$	—	$	—	$	19,987	$	19,987
ADC Arrangement classified as real estate investment	$	—	$	—	$	6,204	$	6,204

Financial Liabilities:
Long-term debt:
8% Senior notes	$	—	$	41,828	$	—	$	41,828
3.875% Convertible senior notes		—		—		92,613		92,613

Total long-term debt	$	—	$	41,828	$	92,613	$	134,441


	Fair Value Measurements Using
	(Level 1)		(Level 2)		(Level 3)		Total
*As of December 31, 2014*
Financial Assets:
ADC Arrangement classified as real estate investment	$	—	$	—	$	2,835	$	2,835

Financial Liabilities:
Long-term debt:
8% Senior notes	$	—	$	42,955	$	—	$	42,955
3.875% Convertible senior notes		—		—		93,367		93,367

Total long-term debt	$	—	$	42,955	$	93,367	$	136,322

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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