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Investments

9 Months Ended

Sep. 30, 2011

3.	Investments

The following table provides the Company’s investment holdings by type of instrument as of the periods presented (in thousands):


	As of September 30, 2011						As of December 31, 2010
	Cost or Amortized Cost		Fair Value		Carrying Value		Cost or Amortized Cost		Fair Value		Carrying Value
Cash equivalents (1) (2)	$	326,276	$	326,276	$	326,276	$	145,121	$	145,121	$	145,121
Trading portfolio:
Debt securities:
U.S. government securities obligations and agencies (2)		3,182		3,711		3,711		138,086		130,116		130,116
Foreign government bonds		54,353		54,352		54,352		—		—		—
Equity securities:
Common stock:
Metals and mining		42,344		30,829		30,829		22,638		25,752		25,752
Other		20,749		16,173		16,173		344		362		362
Exchange-traded and mutual funds:
Metals and mining		26,534		23,295		23,295		32,736		42,209		42,209
Agriculture		17,699		15,411		15,411		10,961		14,877		14,877
Energy		9,206		8,333		8,333		5,798		5,559		5,559
Indices		1,483		1,372		1,372		11,047		4,613		4,613
Other		—		—		—		1,029		1,044		1,044
Derivatives: (3)
Non-hedging instruments		768		1,545		1,545		419		182		182
Other investments (3) (4)		413		366		366		—		—		—

Total trading portfolio investments		176,731		155,387		155,387		223,058		224,714		224,714

Total investments	$	503,007	$	481,663	$	481,663	$	368,179	$	369,835	$	369,835

(1)	Cash equivalents include short-term debt securities consisting of direct obligations of the U.S. Treasury or money-market accounts that invest in direct obligations of the U.S. Treasury.

(2)

The Company is required by various state laws and regulations to maintain certain securities on deposit in depositary accounts with the states in which we do business. As of September 30, 2011 and December 31, 2010, securities having fair values of $3.7 million and $3.4 million, respectively were on deposit. These laws and regulations govern not only the amount, but also the type of security that is eligible for deposit.

(3)	Derivatives and other investments are in included in other assets in the consolidated balance sheets.

(4)	Other investments represent physical metals held by the Company.

The Company has made an assessment of its invested assets for fair value measurement as further described in Note 13 – Fair Value Measurements.

The following table provides investment income comprised primarily of interest and dividends (in thousands):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Cash and equivalents	$	203		$	58		$	253		$	109
Debt securities		13			164			481			710
Equity securities		76			17			136			37

Total investment income		292			239			870			856
Less: Investment expenses		(170	)		(173	)		(512	)		(479	)

Net investment income	$	122		$	66		$	358		$	377

Trading Portfolio

The following table provides the effect of trading activities on the Company’s results of operations by type of instrument and by line item in the condensed consolidated statements of income (in thousands):


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2011			2010			2011			2010
Realized gains(losses) on investments
Debt securities	$	—		$	2,521		$	(3,616	)	$	2,521
Equity securities		5,669			3,726			16,535			3,726
Derivatives (non-hedging instruments)		215			(98	)		(423	)		(98	)

Total realized gains on trading portfolio		5,884			6,149			12,496			6,149
Unrealized gains (losses) on investments
Debt securities		112			423			8,372			423
Equity securities		(17,504	)		6,497			(32,398	)		6,497
Derivatives (non-hedging instruments)		1,454			17			1,036			17
Other		(47	)		—			(47	)		—

Total unrealized gains (losses) on trading portfolio		(15,985	)		6,937			(23,037	)		6,937

Net (losses) gains recognized on trading securities	$	(10,101	)	$	13,086		$	(10,541	)	$	13,086

The preceding table represents alternative quantitative disclosures permitted for derivatives that are not used as hedging instruments and are included in a trading portfolio.

Securities Available-for-sale

The following table provides information related available-for-sale securities (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2011		2010		2011		2010
Sales proceeds (fair value)		n/a		n/a		n/a	$	195,329
Gross realized gains		n/a		n/a		n/a	$	9,090
Gross realized losses		n/a		n/a		n/a	$	(938	)
Other than temporary losses		n/a		n/a		n/a	$	(2,408	)

During the three-month period ended September 30, 2010, the Company evaluated the trading activity in its investment portfolio, its investing strategy, and its overall investment program. As a result of this evaluation, the Company reclassified its available-for-sale portfolio as a trading portfolio effective July 1, 2010. Net unrealized losses of $656 thousand were reflected as a transfer as of July 1, 2010, and recognized in earnings and included under the caption “Unrealized Gains on Investments” in the Consolidated Statement of Income. The net unrealized loss of $656 thousand was comprised of $1.2 million in unrealized losses, offset by $573 thousand of unrealized gains.