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Table of Contents
SUPPORTSOFT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the Year Ended December 31, 2007
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses Fair Value
Cash $ 3,298 $ — $ — $ 3,298
Money market fund 5,651 — — 5,651
Commercial paper 28,300 18 (1) 28,317
Federal agencies 6,999 3 — 7,002
Corporate bonds 29,821 16 (15) 29,822
Auction rate securities 38,850 — — 38,850
$ 112,919 $ 37 $ (16) $ 112,940
Classified as:
Cash and cash equivalents $ 12,926 $ — $ — $ 12,926
Short-term investments 61,143 37 (16) 61,164
Long-term investments 38,850 — — 38,850
$ 112,919 $ 37 $ (16) $ 112,940
The following table summarizes the estimated fair value of our available-for-sale and trading debt securities classified by the stated maturity date of the
security (in thousands):
December 31,
2008 2007
Due within one year $ 7,784 $ 58,165
Due within two years — 2,999
Due after three years 15,766 38,850
$ 23,550 $ 100,014
The Company has determined that the gross unrealized losses on its available-for-sale investments as of December 31, 2008 are temporary in nature. The
Company has reviewed its investment portfolio to identify and evaluate investments that have indications of possible impairment. Factors considered in
determining whether a loss is temporary include the magnitude of the decline in market value, the length of time the market value has been below cost (or
adjusted cost), credit quality, and the Company’s ability and intent to hold the securities for a period of time sufficient to allow for any anticipated recovery in
market value.
At December 31, 2008 and 2007 we had investments in AAA-rated auction-rate debt securities with various state student loan authorities with estimated
fair values aggregating $15.8 million and $38.9 million, respectively. The student loans made by these authorities are substantially guaranteed by the federal
government through the Federal Family Education Loan Program (FFELP). Auction-rate securities are long-term floating rate bonds tied to short-term interest
rates. After the initial issuance of the securities, the interest rate on the securities is reset periodically, at intervals established at the time of issuance (e.g., every
seven days, twenty-eight days, thirty-five days, or every six months), based on market demand, if the auctions are successful. Auction-rate securities are bought
and sold in the marketplace through a competitive bidding process often referred to as a “Dutch auction.” If there is insufficient interest in the securities at the
time of an auction, the auction may not be completed and the auction-rate security then pays a default interest rate. Following such a failed auction, we cannot
access our funds that are invested in the corresponding auction-rate securities until a future auction of these investments is successful, new buyers express interest
in purchasing these securities in between reset dates, issuers establish a different form of financing to replace these securities, or final payments become due
according to contractual
55
Source: SUPPORTSOFT INC, 10-K, March 11, 2009