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Investments

12 Months Ended

Dec. 31, 2012

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, 2012								As of December 31, 2011
	Cost or Amortized Cost		Fair Value			Carrying Value			Cost or Amortized Cost		Fair Value		Carrying Value
Cash and cash equivalents(1)	$	347,392	$	347,392		$	347,392		$	229,685	$	229,685	$	229,685
Restricted cash and cash equivalents		33,009		33,009			33,009			78,312		78,312		78,312
Trading portfolio:
Debt securities:
U.S. government obligations and agencies		3,192		4,009			4,009			3,179		3,801		3,801
Equity securities:
Common stock:
Metals and mining		26,630		26,130			26,130			50,121		38,816		38,816
Energy		10,914		10,868			10,868			6,077		4,999		4,999
Other		8,152		8,215			8,215			8,044		6,945		6,945
Exchange-traded and mutual funds:
Metals and mining		21,748		21,989			21,989			28,311		25,997		25,997
Agriculture		10,303		10,265			10,265			17,781		16,878		16,878
Energy		4,939		5,068			5,068			—		—		—
Indices		2,588		2,506			2,506			2,006		1,710		1,710
Non-hedging derivative asset (liability), net(2)		69		(21	)		(21	)		357		123		123
Other investments(3)		517		317			317			517		371		371

Total trading portfolio investments		89,052		89,346			89,346			116,393		99,640		99,640

Total investments	$	469,453	$	469,747		$	469,747		$	424,390	$	407,637	$	407,637

(1)	Cash and 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)	Derivatives are included in Other assets and Other liabilities and accrued expenses in the Consolidated Balance Sheets.

(3)	Other investments represent physical metals held by the Company and are included in Other assets in the Consolidated Balance Sheets.

The Company has made an assessment of its invested assets for fair value measurement as further described in Note 16 – FAIR VALUE MEASUREMENTS.

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


	Year Ended December 31,
	2012			2011			2010
Cash and cash equivalents(1)	$	705		$	568		$	99
Debt securities		66			494			969
Equity securities		566			421			558

Total investment income		1,337			1,483			1,626
Less investment expenses		(896	)		(695	)		(634	)

Net investment (expense) income	$	441		$	788		$	992

(1)	Includes interest earned on restricted cash and cash equivalents.

Trading Portfolio

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


	Year Ended December 31,
	2012			2011			2010
Realized gains (losses) on investments:
Debt securities	$	—		$	(3,206	)	$	3,041
Equity securities		(12,286	)		5,816			18,906
Derivatives (non-hedging instruments)(1)		343			(260	)		—

Total realized gains (losses) on trading portfolio		(11,943	)		2,350			21,947
Change in unrealized gains (losses) on investments:
Debt securities		195			8,472			(7,850	)
Equity securities		9,158			(26,762	)		10,519
Derivatives (non-hedging instruments)(1)		145			25			(259	)
Other		(55	)		(145	)		—

Total change in unrealized gains (losses) on trading portfolio		9,443			(18,410	)		2,410

Net gains (losses) recognized on trading securities	$	(2,500	)	$	(16,060	)	$	24,357

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

Securities 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, 2010
Sales proceeds (fair value)	$	195,329
Gross realized gains	$	9,090
Gross realized losses	$	(938	)
Other than temporary losses	$	(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 (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.