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Cash and Investments in Marketable Securities
 6 Months Ended
Jun. 30, 2015
Fair Value Disclosures [Abstract]  
Cash and Investments in Marketable Securities

Note 2 — Cash and Investments in Marketable Securities

Cash and investments in marketable securities, including cash equivalents and restricted cash, are as follows (in thousands).

 

     Estimated Fair Value at  
     June 30,
2015		      December 31,
2014		  

Cash and cash equivalents

    $ 20,875       $ 12,365   

Restricted cash

      25,000         25,000   

Short-term investments

      233,785         225,459   
  

 

 

     

 

 

  

Total cash and investments in marketable securities

    $ 279,660       $ 262,824   
  

 

 

     

 

 

  

We invest in liquid, high quality debt securities. Our investments in debt securities are subject to interest rate risk. To minimize the exposure due to an adverse shift in interest rates, we invest in securities with maturities of two years or less and maintain a weighted average maturity of one year or less. As of June 30, 2015 and December 31, 2014, all of our investments had maturities of one year or less.

Gross unrealized gains and losses were not significant at either June 30, 2015 or December 31, 2014. During the three months ended June 30, 2015 and the three and six months ended June 30, 2014, we did not sell any of our available-for-sale securities. During the six months ended June 30, 2015, we sold available-for-sale securities totaling $5.2 million, and gross realized gains and losses on those sales were not significant. The cost of securities sold is based on the specific identification method.

Restricted cash of $25.0 million was required to be maintained in a separate account until July 1, 2015 under the terms of our 12% senior secured notes due July 2017. This restriction expired on July 1, 2015 and the restricted funds were returned to us. We are currently required by a covenant under the senior secured notes to maintain the aggregate balance of our unrestricted cash and cash equivalents of not less than $25.0 million at the end of any two consecutive fiscal quarters, subject to certain conditions.

 

Our portfolio of cash and investments in marketable securities includes (in thousands):

 

     Fair Value
Hierarchy
Level		    Estimated Fair Value at  
        June 30,
2015		      December 31,
2014		  

Corporate notes and bonds

    2    $ 185,917       $ 182,544   

Corporate commercial paper

    2      44,939         42,915   
     

 

 

     

 

 

  

Available-for-sale investments

         230,856         225,459   

Money market funds

    1      16,512         11,229   

Certificate of deposit

    N/A      2,929         —     

Cash, including restricted cash

    N/A      29,363         26,136   
     

 

 

     

 

 

  

Total cash and investments in marketable securities

       $ 279,660       $ 262,824   
     

 

 

     

 

 

  

 

 

Level 1 —

   Quoted prices in active markets for identical assets or liabilities.

Level 2 —

   Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 —

   Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

All of our investments are categorized as Level 1 or Level 2, as explained in the table above. We use a market approach to value our Level 2 investments. The disclosed fair value related to our investments is based primarily on the reported fair values in our period-end brokerage statements, which are based on market prices from a variety of industry standard data providers and generally represent quoted prices for similar assets in active markets or have been derived from observable market data. We independently validate these fair values using available market quotes and other information. During the three and six months ended June 30, 2015 and 2014, there were no transfers between Level 1 and Level 2 of the fair value hierarchy.

Additionally, as of June 30, 2015, based on a discounted cash flow analysis using Level 3 inputs including financial discount rates, we believe the $125.0 million carrying amount of our 12% Senior Secured Notes due July 2017 is consistent with its fair value.