LeapFrog 2004 Annual Report Download - page 92

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LEAPFROG ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share and percent data)
conversion be based on the normal capacity of the production facilities. This statement is effective for inventory
costs incurred during fiscal years beginning after June 15, 2005. The Company does not expect the adoption of
this standard to have any material impact on our results of operations.
3. Fair Value of Financial Instruments
At December 31, 2004 and 2003, the respective carrying values of the Company’s financial instruments,
including cash and cash equivalents, short-term and long-term investments, foreign exchange transactions,
receivables, accounts payable and accrued liabilities, approximated their fair values.
4. Investments
Available-for-sale securities consisted of the following classified by original maturity date:
Maturing within
At December 31, 2004 1YR 2YR 5YR
Over 5
YR Total
Auction rate municipal securities ........................ $ — $ — $1,000 $10,120 $11,120
Municipal preferred securities .......................... 6,675 — — — 6,675
Municipal bonds ..................................... — 2,000 — 2,893 4,893
Certificates of deposit ................................ 5,500 — — — 5,500
Total short-term investments ....................... $12,175 $2,000 $1,000 $13,013 $28,188
Municipal bonds ..................................... $ — $3,737 $ — $ — $ 3,737
Total long-term investments ....................... $ — $3,737 $ — $ — $ 3,737
Certificates of Deposit ................................ $ 8,418 $ — $ — $ — $ 8,418
Total restricted cash .............................. $ 8,418 $ — $ — $ — $ 8,418
At December 31, 2003
Municipal preferred securities .......................... $ 6,650 $ — $ — $ — $ 6,650
Corporate auction preferred ............................ 22,600 — — — $22,600
Auction rate municipal securities ........................ — 1,000 $ 350 $24,175 $25,525
Municipal bonds ..................................... 10,509 1,000 — $ 1,000 $12,509
Total short-term investments ....................... $39,759 $2,000 $ 350 $25,175 $67,284
5. Restricted Cash
Restricted cash at December 31, 2004 consisted of cash used to collateralize irrevocable standby letters of
credit to several of our contract manufacturers. The standby letters of credit guarantee performance of the
obligations of certain of our foreign subsidiaries to pay for trade payables up to $8,418 and are fully secured by
cash deposits with the issuer. The letters of credit expired in January 2005 and the cash collateral was released.
F-13