Annual report pursuant to Section 13 and 15(d)

Short-Term And Long-Term Investments And Restricted Deposits

v2.4.0.8
Short-Term And Long-Term Investments And Restricted Deposits
12 Months Ended
Dec. 31, 2013
Investments, Debt and Equity Securities [Abstract]  
Short-Term And Long-Term Investments And Restricted Deposits
Short term and Long term Investments and Restricted Deposits

Short term and long term investments and restricted deposits by investment type consist of the following:
 
December 31, 2013
 
December 31, 2012
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized Losses
 
Fair
Value
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized Losses
 
Fair
Value
U.S. Treasury securities and obligations of U.S. government corporations and agencies
$
246,085

 
$
245

 
$
(7,494
)
 
$
238,836

 
$
110,941

 
$
581

 
$
(221
)
 
$
111,301

Corporate securities
293,912

 
2,782

 
(608
)
 
296,086

 
290,691

 
4,615

 
(195
)
 
295,111

Restricted certificates of deposit
5,891

 

 

 
5,891

 
5,890

 

 

 
5,890

Restricted cash equivalents
26,642

 

 

 
26,642

 
14,455

 

 

 
14,455

Municipal securities:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

General obligation
54,003

 
555

 
(136
)
 
54,422

 
85,440

 
1,157

 
(26
)
 
86,571

Pre-refunded
10,835

 
82

 

 
10,917

 
5,337

 
85

 

 
5,422

Revenue
68,801

 
545

 
(292
)
 
69,054

 
82,781

 
1,313

 
(30
)
 
84,064

Variable rate demand notes
28,575

 

 

 
28,575

 
23,385

 

 

 
23,385

Asset backed securities
138,803

 
579

 
(332
)
 
139,050

 
73,570

 
1,082

 
(15
)
 
74,637

Mortgage backed securities
33,974

 

 
(83
)
 
33,891

 

 

 

 

Cost and equity method investments
22,239

 

 

 
22,239

 
11,298

 

 

 
11,298

Life insurance contracts
15,369

 

 

 
15,369

 
15,023

 

 

 
15,023

Total
$
945,129

 
$
4,788

 
$
(8,945
)
 
$
940,972

 
$
718,811

 
$
8,833

 
$
(487
)
 
$
727,157



The Company’s investments are classified as available-for-sale with the exception of life insurance contracts and certain cost and equity method investments.  The Company’s investment policies are designed to provide liquidity, preserve capital and maximize total return on invested assets with the focus on high credit quality securities.  The Company limits the size of investment in any single issuer other than U.S. treasury securities and obligations of U.S. government corporations and agencies.  The Company's mortgage backed securities are issued by the Federal National Mortgage Association and carry guarantees by the U.S. government. As of December 31, 2013, 52% of the Company’s investments in securities recorded at fair value that carry a rating by S&P or Moody’s were rated AAA/Aaa, 68% were rated AA-/Aa3 or higher, and 94% were rated A-/A3 or higher.  At December 31, 2013, the Company held certificates of deposit, life insurance contracts and cost and equity method investments which did not carry a credit rating.

The fair value of available-for-sale investments with gross unrealized losses by investment type and length of time that individual securities have been in a continuous unrealized loss position were as follows:
 
December 31, 2013
 
December 31, 2012
 
Less Than 12 Months
 
12 Months or More
 
Less Than 12 Months
 
12 Months or More
 
Unrealized Losses
 
Fair
Value
 
Unrealized Losses
 
Fair
Value
 
Unrealized Losses
 
Fair
Value
 
Unrealized Losses
 
Fair
Value
U.S. Treasury securities and obligations of U.S. government corporations and agencies
$
(6,188
)
 
$
172,365

 
$
(1,307
)
 
$
26,454

 
$
(219
)
 
$
56,033

 
$
(2
)
 
$
201

Corporate securities
(400
)
 
52,725

 
(207
)
 
5,020

 
(195
)
 
44,208

 

 

Municipal securities:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

General obligation
(72
)
 
3,480

 
(63
)
 
2,426

 
(26
)
 
7,930

 

 

Revenue
(292
)
 
27,789

 

 

 
(30
)
 
3,090

 

 

Asset backed securities
(333
)
 
37,689

 

 

 
(15
)
 
8,192

 

 

Mortgage backed securities
(83
)
 
33,891

 

 

 

 

 

 

Total
$
(7,368
)
 
$
327,939

 
$
(1,577
)
 
$
33,900

 
$
(485
)
 
$
119,453

 
$
(2
)
 
$
201



As of December 31, 2013, the gross unrealized losses were generated from 83 positions out of a total of 343 positions.  The decline in fair value of fixed income securities is a result of movement in interest rates subsequent to the purchase of the security.

For each security in an unrealized loss position, the Company assesses whether it intends to sell the security or if it is more likely than not the Company will be required to sell the security before recovery of the amortized cost basis for reasons such as liquidity, contractual or regulatory purposes.  If the security meets this criterion, the decline in fair value is other-than-temporary and is recorded in earnings.  The Company does not intend to sell these securities prior to maturity and it is not likely that the Company will be required to sell these securities prior to maturity; therefore, there is no indication of other than temporary impairment for these securities.

The contractual maturities of short term and long term investments and restricted deposits are as follows:
 
December 31, 2013
 
December 31, 2012
 
Investments
 
Restricted Deposits
 
Investments
 
Restricted Deposits
 
Amortized
Cost
 
Fair
Value
 
Amortized
Cost
 
Fair
Value
 
Amortized
Cost
 
Fair
Value
 
Amortized
Cost
 
Fair
Value
One year or less
$
101,537

 
$
102,126

 
$
40,633

 
$
40,637

 
$
136,997

 
$
138,101

 
$
33,897

 
$
33,928

One year through five years
609,755

 
610,589

 
6,301

 
6,309

 
429,053

 
435,728

 
358

 
358

Five years through ten years
157,003

 
151,221

 

 

 
93,907

 
93,778

 

 

Greater than ten years
29,900

 
30,090

 

 

 
24,599

 
25,264

 

 

Total
$
898,195

 
$
894,026

 
$
46,934

 
$
46,946

 
$
684,556

 
$
692,871

 
$
34,255

 
$
34,286


 
Actual maturities may differ from contractual maturities due to call or prepayment options.  Asset backed and mortgage backed securities are included in the one year through five years category, while cost and equity method investments and life insurance contracts are included in the five years through ten years category.  The Company has an option to redeem at amortized cost substantially all of the securities included in the greater than ten years category listed above.

The Company continuously monitors investments for other-than-temporary impairment.  Certain investments have experienced a decline in fair value due to changes in credit quality, market interest rates and/or general economic conditions.  The Company recognizes an impairment loss for cost and equity method investments when evidence demonstrates that it is other-than-temporarily impaired.  Evidence of a loss in value that is other than temporary may include the absence of an ability to recover the carrying amount of the investment or the inability of the investee to sustain a level of earnings that would justify the carrying amount of the investment.