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Investments

12 Months Ended

Dec. 31, 2011

NOTE 3 – INVESTMENTS

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


	As of December 31, 2011						As of December 31, 2010
	Cost or Amortized Cost		Fair Value		Carrying Value		Cost or Amortized Cost		Fair Value		Carrying Value
Cash and cash equivalents (1)	$	229,685	$	229,685	$	229,685	$	133,645	$	133,645	$	133,645
Restricted cash and cash equivalents (1)		78,312		78,312		78,312		13,940		13,940		13,940
Trading portfolio:
Debt securities:
U.S. government securities obligations and agencies (2)		3,179		3,801		3,801		138,086		130,116		130,116
Equity securities:
Common stock:
Metals and mining		50,121		38,816		38,816		22,638		25,752		25,752
Other		14,121		11,944		11,944		344		362		362
Exchange-traded and mutual funds:
Metals and mining		28,311		25,997		25,997		32,736		42,209		42,209
Agriculture		17,781		16,878		16,878		10,961		14,877		14,877
Energy		—		—		—		5,798		5,559		5,559
Indices		2,006		1,710		1,710		11,047		4,613		4,613
Other		—		—		—		1,029		1,044		1,044
Derivatives: (3)
Non-hedging instruments		357		123		123		419		182		182
Other investments (3) (4)		517		371		371		—		—		—

Total trading portfolio investments		116,393		99,640		99,640		223,058		224,714		224,714

Total investments	$	424,390	$	407,637	$	407,637	$	370,643	$	372,299	$	372,299

(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 December 31, 2011 and 2010, securities having fair values of $3.8 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 included in other assets in the consolidated balance sheets.

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

See NOTE 16 – FAIR VALUE MEASUREMENTS, for additional disclosures related to investments held at fair value.

The following table provides net investment income, comprised primarily of interest and dividends, for the periods presented (in thousands):


	Year Ended December 31,
	2011			2010			2009
Cash and cash equivalents and restricted cash and cash equivalents	$	568		$	99		$	312
Debt securities		494			969			1,269
Equity securities		421			558			651

Total investment income		1,483			1,626			2,232
Less investment expenses		(695	)		(634	)		(778	)

Net investment income	$	788		$	992		$	1,454

Trading

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


	Year Ended December 31,
	2011			2010			2009 (2)
Realized gains(losses) on investments:
Debt securities	$	(3,206	)	$	3,041			n/a
Equity securities		5,816			18,906			n/a
Derivatives (non-hedging instruments) (1)		(260	)		—			n/a

Total realized gains on trading portfolio		2,350			21,947			n/a
Unrealized gains (losses) on investments:
Debt securities		8,472			(7,850	)		n/a
Equity securities		(26,762	)		10,519			n/a
Derivatives (non-hedging instruments) (1)		25			(259	)		n/a
Other		(145	)		—			n/a

Total unrealized gains (losses) on trading portfolio		(18,410	)		2,410			n/a

Net (losses) gains recognized on trading securities	$	(16,060	)	$	24,357			n/a

(1)	This table represents the alternative quantitative disclosures permitted for derivatives that are not used as hedging instruments and are included in the trading portfolio.

(2)	The company did not have any investments classified as trading during 2009.

Available- for- sale

The following table provides certain information related to securities available for sale during the periods presented (in thousands):


	Year Ended December 31,
	2011 (1)		2010			2009
Sales proceeds (fair value)		n/a	$	195,329		$	446,668
Gross realized gains		n/a	$	9,090		$	33,966
Gross realized losses		n/a	$	(938	)	$	(9,791	)
Other than temporary losses		n/a	$	(2,408	)	$	—

(1)	The Company did not have any investments classified as available for sale during 2011.

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 (Losses) 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.

Held-to-Maturity

During the year ended December 31, 2009, the Company sold US Treasury Notes, originally intended to be held to maturity, and purchased US Treasury Inflation Index Bonds in order to reduce the effects of inflation on the Company’s overall investment portfolio. These US Treasury Notes were sold for $4.2 million and a gain of $74 thousand was recognized. The Company reclassified its held to maturity securities being carried at an amortized cost of $57.8 million to available for sale securities and recorded net unrealized losses of $86 thousand concurrently with the sale of the US Treasury Notes.