Support.com 2008 Annual Report Download - page 57

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Table of Contents
SUPPORTSOFT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
commercial paper, corporate and municipal bonds and notes and securities issued by the United States government. Long-term investments consist of
auction-rate debt securities. Our cash equivalents and short-term investments are classified as available-for-sale, and are reported at fair value with unrealized
gains and losses, when deemed to be temporary, included in accumulated other comprehensive income within stockholders’ equity on the Consolidated Balance
Sheets. We designated all long-term investments, except for auction-rate securities held by UBS, as available-for-sale which are therefore reported at fair value,
with unrealized gains and losses recorded in accumulated other comprehensive income. During the fourth quarter of fiscal 2008, we reclassified auction-rate
securities held by UBS from available-for-sale to trading securities. Investments that we designate as trading assets are reported at fair value, with gains or losses
resulting from changes in fair value recognized in earnings. Realized gains and losses and declines in value judged to be other-than-temporary on
available-for-sale securities are included in interest income and other, net in the Consolidated Statements of Operations. We recorded net unrealized losses on
available-for-sale securities of $1.6 million as of December 31, 2008 and net unrealized gains of $21,000 as of December 31, 2007, in accumulated other
comprehensive income. Realized gains and losses are recorded using the specific identification method. The net realized loss, excluding auction-rate securities as
discussed below, was $73,000 in 2008 and immaterial in 2007 and 2006.
We monitor our investments for impairment on a quarterly basis and determine whether a decline in fair value is other-than-temporary by considering
factors such as current economic and market conditions, the credit rating of the security’s issuer, the length of time an investment’s fair value has been below our
carrying value, and our ability and intent to hold investments to maturity. If an investment’s decline in fair value is deemed to be other-than-temporary, we
reduce its carrying value to its estimated fair value, as determined based on quoted market prices or liquidation values. Declines in value judged to be
other-than-temporary, if any, are recorded in operations as incurred.
The following is a summary of cash, cash equivalents and investments (in thousands):
For the Year Ended December 31, 2008
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses Fair Value
Cash $ 6,252 $ — $ — $ 6,252
Money market fund 55,058 — — 55,058
Commercial paper 7,774 7 — 7,781
Corporate bonds 3,000 — (1) 2,999
Auction rate securities (1) 17,352 — (1,586) 15,766(1)
$ 89,436 $ 7 $ (1,587) $ 87,856(1)
Classified as:
Cash and cash equivalents $ 64,306 $ — $ — $ 64,306
Short-term investments 7,778 7 (1) 7,784
Long-term investments 17,352 — (1,586) 15,766(1)
$ 89,436 $ 7 $ (1,587) $ 87,856(1)
(1) In addition to the fair value of our auction-rate securities holdings, we hold the auction-rate security put option, which is classified as a long-term
asset valued at $7.1 million as of December 31, 2008. At December 31, 2008, the fair value of cash, cash equivalents, investments and the
auction-rate security put option was $95.0 million.
54
Source: SUPPORTSOFT INC, 10-K, March 11, 2009