Digital River 2006 Annual Report Download - page 89

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In accordance with the Emerging Issues Task Force (EITF), Issue No. 04-8, the unissued shares
underlying contingent convertible notes are treated as if such shares were issued and outstanding for the
purposes of calculating GAAP diluted earnings per share beginning with the issuance of our 1.25% convertible
senior notes on June 1, 2004.
4. Short-Term Investments:
As of December 31, 2006 and 2005, our available-for-sale securities consisted of the following (in
thousands):
Cost
Less Than 12
Months
Greater Than 12
Months Fair Value
Less Than 12
Months 1 to 3 Years
Unrealized Gain/(Loss) Maturities/Reset Dates
2006
U.S. government sponsored
entities . . . . . . . . . . . . . . . . . . $142,473 $ (441) $(208) $141,824 $ 79,961 $61,863
Student loan bonds . . . . . . . . . . . 35,000 — — 35,000 35,000 —
Other . . . . . . . . . . . . . . . . . . . . . 58,875 — — 58,875 58,875 —
Total available-for-sale securities . . $236,348 $ (441) $(208) $235,699 $173,836 $61,863
2005
U.S. government sponsored
entities . . . . . . . . . . . . . . . . . . $147,982 $(1,277) $(189) $146,516 $ 64,003 $82,513
Student loan bonds . . . . . . . . . . . 60,000 — — 60,000 60,000 —
Other . . . . . . . . . . . . . . . . . . . . . 14,053 — — 14,053 14,053 —
Total available-for-sale securities . . $222,035 $(1,277) $(189) $220,569 $138,056 $82,513
Realized gains or losses on investments are recorded in our statement of operations within other income,
net. Realized losses on sales of investments were immaterial in 2006, 2005 and 2004. Interest income of
$22.8 million, $9.7 million and $3.2 million was recorded in 2006, 2005 and 2004, respectively.
85
DIGITAL RIVER, INC.
Notes to Consolidated Financial Statements — (Continued)