LeapFrog 2005 Annual Report Download - page 91

LEAPFROG ENTERPRISES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(In thousands)
recognized as current-period charges regardless of whether they meet the criterion of “so abnormal.” In addition,
the statement requires that allocation of fixed production overhead to the costs of 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 its results of operations.
3. Fair Value of Financial Instruments
At December 31, 2005 and 2004, the 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, 2005 1YR 2YR 5YR
5to10
YR
Over 10
YR Total
Auction rate preferred securities ................ $ — $ — $ — $ — $ 1,300 $ 1,300
Auction rate certificates ...................... 1,000 — 1,000 — 20,350 22,350
Total short-term investments ............... $ 1,000 $ — $1,000 $ — $21,650 $23,650
Certificate of Deposit ........................ $ 150 $ — $ — $ — $ — $ 150
Total restricted cash ..................... $ 150 $ — $ — $ — $ — $ 150
At December 31, 2004
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, 2005 and 2004, short-term investments included certificates issued by various states of the
United States totaling $19,350 and $22,688, respectively.
5. Restricted Cash
At December 31, 2005, the Company had $150 of restricted cash which was used to collateralize a single
standby letter of credit to an insurance provider. The standby letter of credit guarantees expected claims under the
Company’s commercial and general liability protection policy.
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