|
Note 4. Cash and Cash Equivalents, Short-term Investments and Fair Value of Financial Instruments
Cash and cash equivalents and short-term investments consist of the following significant investment asset classes, with disclosure of amortized cost, gross unrealized gains and losses, and fair value as of September 30, 2011 and December 31, 2010 (in thousands):
|
|
|
September 30, 2011 |
|
|
|
|
|
|
Amortized
Cost |
|
Unrealized
Gains |
|
Unrealized
Losses |
|
Fair Value |
|
Cash / Cash
Equivalents |
|
Short-term
Investments |
|
Security
Classification (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash |
|
$ |
13,039 |
|
$ |
— |
|
$ |
— |
|
$ |
13,039 |
|
$ |
13,039 |
|
$ |
— |
|
N/A |
|
|
Money market funds |
|
166,264 |
|
— |
|
— |
|
166,264 |
|
166,264 |
|
— |
|
Available for sale |
|
|
Non-U.S. Government securities |
|
8,098 |
|
3 |
|
— |
|
8,101 |
|
— |
|
8,101 |
|
Available for sale |
|
|
Total cash, cash equivalents and short-term investments |
|
$ |
187,401 |
|
$ |
3 |
|
$ |
— |
|
$ |
187,404 |
|
$ |
179,303 |
|
$ |
8,101 |
|
|
|
|
|
|
December 31, 2010 |
|
|
|
|
|
|
Amortized
Cost |
|
Unrealized
Gains |
|
Unrealized
Losses |
|
Fair Value |
|
Cash / Cash
Equivalents |
|
Short-term
Investments |
|
Security
Classification (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash |
|
$ |
25,593 |
|
$ |
— |
|
$ |
— |
|
$ |
25,593 |
|
$ |
25,593 |
|
$ |
— |
|
N/A |
|
|
Money market funds |
|
150,042 |
|
— |
|
— |
|
150,042 |
|
150,042 |
|
— |
|
Available for sale |
|
|
Non-U.S. government securities |
|
8,074 |
|
|
12 |
|
— |
|
8,086 |
|
— |
|
|
8,074 |
|
Held-to-maturity |
|
|
Total cash, cash equivalents and short-term investments |
|
$ |
183,709 |
|
$ |
12 |
|
$ |
— |
|
$ |
183,721 |
|
$ |
175,635 |
|
$ |
8,074 |
|
|
|
(1) For Available-for-sale securities, fair value is the asset’s carrying value, equal to the amortized cost plus any unrealized gains/losses. For Held-to-maturity securities, the amortized cost is the asset’s carrying value (since there are no other-than-temporary impairments) and the fair value gains/losses are not only unrealized, but also unrecorded.
The money market fund is a daily-traded cash equivalent with price of $1.00, making it a Level 1 asset class, and its carrying cost closely approximates fair value. As the demand deposit (cash) balances vary with the timing of collections and payments, the money market fund can cover any surplus or deficit, and thus is considered Available-for-sale.
The short term investments purchased in November 2010 were comprised of California revenue anticipation notes, which matured in June 2011. In previous periods, these were recorded at their carrying cost as Held-to-maturity as we had both the ability and intent to keep these investments until they mature. The notes were considered a Level 2 asset class, because their pricing is drawn from multiple market-related inputs, but in general not from same-day, same-security trades.
The short term investments purchased in September 2011 are comprised of California revenue anticipation notes, which mature in June 2012. As this is the initial investment in a broader portfolio strategy for yield management, these are considered Available-for-sale. The notes are considered a Level 2 asset class, because their pricing is drawn from multiple market-related inputs, but in general not from same-day, same-security trades.
The following table displays the financial assets measured at fair value, on a recurring basis, with money market funds recorded within cash and cash equivalents and non-U.S Government securities in short-term investments (in thousands):
|
|
|
Quoted Prices in Active
Markets for Identical
Instruments
(Level 1) |
|
Significant Other
Observable Inputs
(Level 2) |
|
Significant
Unobservable
Inputs
(Level 3) |
|
Total Fair
Value |
|
|
At September 30, 2011 |
|
|
|
|
|
|
|
|
|
|
Money market funds |
|
$ |
166,264 |
|
$ |
— |
|
— |
|
$ |
166,264 |
|
|
Non U.S. Government securities |
|
— |
|
8,101 |
|
— |
|
8,101 |
|
|
Total |
|
$ |
166,264 |
|
$ |
8,101 |
|
— |
|
$ |
174,365 |
|
|
At December 31, 2010 |
|
|
|
|
|
|
|
|
|
|
Money market funds |
|
$ |
150,042 |
|
— |
|
— |
|
$ |
150,042 |
|
|
Total |
|
$ |
150,042 |
|
— |
|
— |
|
$ |
150,042 |
|
Current assets and current liabilities are recorded at amortized cost, which approximates fair value due to the short maturities implied.
The following table displays the financial assets measured at carrying cost, recorded in Short-term investments, for which disclosure of fair value is required on a recurring basis (in thousands):
|
|
|
Quoted Prices in Active
Markets for Identical
Instruments
(Level 1) |
|
Significant Other
Observable Inputs
(Level 2) |
|
Significant
Unobservable
Inputs
(Level 3) |
|
Total Fair
Value |
|
|
At December 31, 2010 |
|
|
|
|
|
|
|
|
|
|
Non-U.S. Government securities |
|
— |
|
$ |
8,086 |
|
— |
|
$ |
8,086 |
|
|
Total |
|
— |
|
$ |
8,086 |
|
— |
|
$ |
8,086 |
| |