Stamps.com 2012 Annual Report Download - page 64

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STAMPS.COM INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Our cash equivalents, restricted cash and investments consist of money market, U.S. government obligations, asset-
backed securities and public
corporate debt securities at December 31, 2012 and 2011. We consider all highly liquid investments with an original or remaining maturity of
three months or less at the date of purchase to be cash equivalents. All of our investments are classified as available for sale and are recorded at
market value using the specific identification method. Realized gains and losses are reflected in other income, net using the specific
identification method. Net realized gain and loss during the years ended December 31, 2012, 2011 and 2010 is not material to our
financial
statements. Unrealized gains and losses are included as a separate component of stockholders' equity. We do not intend to sell investments with
an amortized cost basis exceeding fair value, and it is not likely that we will be required to sell the investments before recovery of their
amortized cost bases. We have four securities with a total fair value of $98,000 that have unrealized losses of approximately $9,000 as of
December 31, 2012.
The following table summarizes realized gains and losses for the period indicated (in thousands):
On at least a quarterly basis, we evaluate our available for sale securities and record an “other-than-temporary impairment” (“OTTI”)
if we
believe their fair value is less than historical cost and it is probable that we will not collect all contractual cash flows. We did not record any
OTTI during 2012 and 2011 after evaluating a number of factors including, but not limited to:
Table of Contents
4.
Cash, Cash Equivalents and Investments
Year Ended December 31,
2012
2011
2010
Realized gain
$
11
$
11
$
62
Realized loss
(2
)
—
(
97
)
Net realized gain (loss)
$
9
$
11
$
(35
)
•
How much fair value has declined below amortized cost
•
The financial condition of the issuers
•
Significant rating agency changes on the issuers
•
Our intent and ability to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value
F
-
16