Earthlink 2007 Annual Report Download - page 85

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EARTHLINK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED—(Continued)
6. Investments
Investments in Marketable Securities
The following table summarizes unrealized gains and losses on the Company's investments in marketable securities based on quoted market
prices as of December 31, 2006 and 2007:
The unrealized losses on the Company's investments in marketable securities were caused primarily by changes in interest rates. The
Company's investment portfolio consists of government agency and high-quality corporate securities. Investments in both fixed rate and floating
rate interest earning instruments carry a degree of interest rate risk. Fixed rate securities may have their fair market value adversely impacted due
to a rise in interest rates, while floating rate securities may produce less income than expected if interest rates fall. The longer the term of the
securities, the more susceptible they are to changes in market rates of interest and yields on bonds. The Company believes its gross unrealized
losses are temporary because management has the intent and ability to hold these investments until maturity, at which time the Company would
expect to receive the amortized cost basis of the investment based on the underlying contractual arrangement. The Company has not realized any
significant gains or losses on its investments in marketable securities during the years presented.
79
As of December 31, 2006
As of December 31, 2007
Amortized
Cost
Gross
Unrealized
Losses
Gross
Unrealized
Gains
Estimated
Fair
Value
Amortized
Cost
Gross
Unrealized
Losses
Gross
Unrealized
Gains
Estimated
Fair
Value
(in thousands)
Short
-
term
Government agency notes
$
46,666
$
(154
)
$
—
$
46,512
$
23,677
$
—
$
14
$
23,691
Asset-backed (including
auction rate) securities
85,050
—
—
85,050
38,900
—
—
$
38,900
Commercial paper
74,967
(77
)
—
74,890
29,067
—
64
29,131
Corporate notes
8,498
(6
)
3
8,495
1,500
(18
)
1,482
$
215,181
$
(237
)
$
3
$
214,947
$
93,144
$
(18
)
$
78
$
93,204
Long-term
Government agency notes
$
20,997
$
(39
)
$
1
$
20,959
$
18,542
$
—
$
37
$
18,579
Corporate notes
500
—
1
501
2,974
—
11
2,985
$
21,497
$
(39
)
$
2
$
21,460
$
21,516
$
—
$
48
$
21,564
Total
Government agency notes
$
67,663
$
(193
)
$
1
$
67,471
$
42,219
$
—
$
51
$
42,270
Asset-backed (including
auction rate) securities
85,050
—
—
85,050
38,900
—
—
38,900
Commercial paper
74,967
(77
)
—
74,890
29,067
—
64
29,131
Corporate notes
8,998
(6
)
4
8,996
4,474
(18
)
11
4,467
$
236,678
$
(276
)
$
5
$
236,407
$
114,660
$
(18
)
$
126
$
114,768