Quarterly report pursuant to Section 13 or 15(d)

Short-Term And Long-Term Investments And Restricted Deposits

v2.4.0.8
Short-Term And Long-Term Investments And Restricted Deposits
6 Months Ended
Jun. 30, 2014
Investments, Debt and Equity Securities [Abstract]  
Short-Term And Long-Term Investments And Restricted Deposits
Short-term and Long-term Investments, Restricted Deposits

Short-term and long-term investments and restricted deposits by investment type consist of the following:
 
June 30, 2014
 
December 31, 2013
 
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
$
325,602

 
$
424

 
$
(3,349
)
 
$
322,677

 
$
246,085

 
$
245

 
$
(7,494
)
 
$
238,836

Corporate securities
395,427

 
4,087

 
(166
)
 
399,348

 
293,912

 
2,782

 
(608
)
 
296,086

Restricted certificates of deposit
5,892

 

 

 
5,892

 
5,891

 

 

 
5,891

Restricted cash equivalents
57,608

 

 

 
57,608

 
26,642

 

 

 
26,642

Municipal securities:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

General obligation
38,950

 
480

 
(22
)
 
39,408

 
54,003

 
555

 
(136
)
 
54,422

Pre-refunded
8,486

 
59

 
(10
)
 
8,535

 
10,835

 
82

 

 
10,917

Revenue
68,871

 
571

 
(42
)
 
69,400

 
68,801

 
545

 
(292
)
 
69,054

Variable rate demand notes
18,000

 

 

 
18,000

 
28,575

 

 

 
28,575

Asset backed securities
179,418

 
636

 
(69
)
 
179,985

 
138,803

 
579

 
(332
)
 
139,050

Mortgage backed securities
47,113

 
1,157

 

 
48,270

 
33,974

 

 
(83
)
 
33,891

Cost and equity method investments
38,087

 

 

 
38,087

 
22,239

 

 

 
22,239

Life insurance contracts
15,545

 

 

 
15,545

 
15,369

 

 

 
15,369

Total
$
1,198,999

 
$
7,414

 
$
(3,658
)
 
$
1,202,755

 
$
945,129

 
$
4,788

 
$
(8,945
)
 
$
940,972



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 June 30, 2014, 53% 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, 65% were rated AA-/Aa3 or higher, and 93% were rated A-/A3 or higher.  At June 30, 2014, 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:
 
June 30, 2014
 
December 31, 2013
 
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
$
(18
)
 
$
11,987

 
$
(3,331
)
 
$
179,105

 
$
(6,188
)
 
$
172,365

 
$
(1,307
)
 
$
26,454

Corporate securities
(149
)
 
56,343

 
(17
)
 
985

 
(400
)
 
52,725

 
(207
)
 
5,020

Municipal securities:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

General obligation

 

 
(22
)
 
3,476

 
(72
)
 
3,480

 
(63
)
 
2,426

Pre-refunded
(10
)
 
1,034

 

 

 

 

 

 

Revenue

 

 
(42
)
 
3,413

 
(292
)
 
27,789

 

 

Asset backed securities

 

 

 

 
(333
)
 
37,689

 

 

Mortgage backed securities
(3
)
 
9,969

 
(66
)
 
15,706

 
(83
)
 
33,891

 

 

Total
$
(180
)
 
$
79,333

 
$
(3,478
)
 
$
202,685

 
$
(7,368
)
 
$
327,939

 
$
(1,577
)
 
$
33,900



As of June 30, 2014, the gross unrealized losses were generated from 51 positions out of a total of 323 positions.  The change 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:
 
June 30, 2014
 
December 31, 2013
 
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
$
126,496

 
$
127,348

 
$
60,665

 
$
60,665

 
$
101,537

 
$
102,126

 
$
40,633

 
$
40,637

One year through five years
855,731

 
859,409

 
17,770

 
17,777

 
609,755

 
610,589

 
6,301

 
6,309

Five years through ten years
118,210

 
116,873

 

 

 
157,003

 
151,221

 

 

Greater than ten years
20,127

 
20,683

 

 

 
29,900

 
30,090

 

 

Total
$
1,120,564

 
$
1,124,313

 
$
78,435

 
$
78,442

 
$
898,195

 
$
894,026

 
$
46,934

 
$
46,946


 
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.