XO Communications 2009 Annual Report Download - page 62

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5. MARKETABLE SECURITIES
A summary of available-for-sale investments is as follows (in thousands):
Cost Gains Losses Fair Value
Gross Unrealized
December 31, 2009
Equity securities ............................. $ 195 $1,125 $ — $ 1,320
Total .................................... $ 195 $1,125 $ — $ 1,320
December 31, 2008
Equity securities ............................. $ 10,632 $ — $ — $ 10,632
Corporate debt securities ....................... 111,360 1,835 (6,679) 106,516
Total .................................... $121,992 $1,835 $(6,679) $117,148
The Company’s marketable securities at December 31, 2009 consist of equity securities. Marketable securities
at December 31, 2008 consisted of both debt and equity securities. All marketable securities are classified as
available-for-sale and are stated at estimated fair value. Unrealized gains and losses are computed on the basis
of average cost and are reported as a separate component of accumulated other comprehensive income (loss)
in stockholders’ equity until realized. Proceeds from the sales of marketable securities totaled $175.1 million
and $0.1 million for the years ended December 31, 2009 and 2008, respectively. There were no proceeds from
the sale of marketable securities for the year ended December 31, 2007. The gross realized gains related to
sales of marketable securities were $53.3 million for the year ended December 31, 2009. No gains were
realized related to the sale of marketable securities for the years ended December 31, 2008 and 2007. There
were no material gross realized losses related to the sales of marketable securities for the years ended
December 31, 2009, 2008 and 2007.
The Company did not identify any impairment to marketable securities during 2009, however, impairment of
marketable securities for other-than-temporary declines in fair market value for 2008 and 2007 was $20.9 mil-
lion and $0.7 million, respectively. The impairment loss during 2008 was due to an $18.9 million loss on
equity securities and a $2.0 million loss on corporate debt securities. There were no marketable securities with
unrealized losses as of December 31, 2009. At December 31, 2009 there were $1.1 million in unrealized
holding gains related to equity securities. All debt securities were sold during 2009. At December 31, 2008
there were $1.8 million in unrealized holding gains and $6.7 million in unrealized losses related to corporate
debt securities. These unrealized gains and losses were recorded on the Consolidated Balance Sheets as a
separate component of stockholders’ equity.
The Company recognized net investment gains of $60.0 million, $19.2 million and $20.9 million for the years
ended December 31, 2009, 2008 and 2007, respectively. The 2009 investment gain is comprised of a
$41.2 million gain from the sale of debt securities, a $12.1 million gain from the sale of equity securities, a
$5.8 million gain related to the settlement agreement associated with the Company’s holding of Global
Crossing debt securities and a $0.9 million gain from the settlement with ATLT of claims related to the
Company’s holdings of Allegiance debt securities. The 2008 net investment gains primarily related to a
$35.9 million gain from the settlement with ATLT and a $4.4 million gain from the conversion of a non-
publicly traded investment to a publicly traded available-for-sale investment, partially offset by $20.9 million
of impairments from other-than-temporary declines in market value of marketable securities. The 2007 net
investment gain included $21.5 million related to the settlement agreement associated with the Company’s
holding of Global Crossing debt securities, partially offset by a $0.6 million impairment from an
other-than-temporary decline in market value.
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