| General
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September 30, 2011 | December 31, 2010 | |||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
Equity Method:
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Partner companies
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$ | 105,359 | $ | 50,561 | ||||
Private equity funds
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5,860 | 2,265 | ||||||
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111,219 | 52,826 | ||||||
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Cost Method:
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Private equity funds
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2,984 | 2,908 | ||||||
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Advances to partner companies
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3,214 | 4,522 | ||||||
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$ | 117,417 | $ | 60,256 | ||||
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Available-for-sale securities
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$ | 5,694 | $ | 25,447 | ||||
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Carrying | Fair Value Measurement at September 30, 2011 | |||||||||||||||
Value | Level 1 | Level 2 | Level 3 | |||||||||||||
(in thousands) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Cash and cash equivalents
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$ | 144,241 | $ | 144,241 | $ | — | $ | — | ||||||||
Cash held in escrow
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$ | 6,433 | $ | 6,433 | $ | — | $ | — | ||||||||
Restricted cash equivalents
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$ | 12,265 | $ | 12,265 | $ | — | $ | — | ||||||||
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Available-for-sale securities
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$ | 5,694 | $ | 5,694 | $ | — | $ | — | ||||||||
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Marketable securities -
held-to-maturity:
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Commercial paper
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$ | 41,740 | $ | 41,740 | $ | — | $ | — | ||||||||
U.S. Treasury Bills
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27,593 | 27,593 | — | — | ||||||||||||
Government agency bonds
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55,178 | 55,178 | — | — | ||||||||||||
Certificates of deposit
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11,626 | 11,626 | — | — | ||||||||||||
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$ | 136,137 | $ | 136,137 | $ | — | $ | — | ||||||||
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Carrying | Fair Value Measurement at December 31, 2010 | |||||||||||||||
Value | Level 1 | Level 2 | Level 3 | |||||||||||||
(in thousands) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Cash and cash equivalents
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$ | 183,419 | $ | 183,419 | $ | — | $ | — | ||||||||
Cash held in escrow
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$ | 6,434 | $ | 6,434 | $ | — | $ | — | ||||||||
Restricted cash equivalents
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$ | 16,774 | $ | 16,774 | $ | — | $ | — | ||||||||
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Available-for-sale securities
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$ | 25,447 | $ | 25,447 | $ | — | $ | — | ||||||||
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Marketable securities -
held-to-maturity:
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Commercial paper
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$ | 27,362 | $ | 27,362 | $ | — | $ | — | ||||||||
U.S. Treasury Bills
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12,053 | 12,053 | — | — | ||||||||||||
Certificates of deposit
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2,996 | 2,996 | — | — | ||||||||||||
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$ | 42,411 | $ | 42,411 | $ | — | $ | — | ||||||||
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Three Months ended September 30, | Nine Months ended September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(In thousands) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Net income (loss)
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$ | 22,331 | $ | 596 | $ | 135,136 | $ | (18,532 | ) | |||||||
Other comprehensive income (loss), before taxes:
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Unrealized
net income (loss) on available-for-sale securities
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(14,552 | ) | 7,885 | (19,787 | ) | 7,131 | ||||||||||
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Reclassification adjustment for other than temporary
impairment of available-for-sale securities
included in
net income (loss)
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389 | 1,108 | 1,520 | 1,108 | ||||||||||||
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Total comprehensive income (loss)
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$ | 8,168 | $ | 9,589 | $ | 116,869 | $ | (10,293 | ) | |||||||
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September 30, 2011 | December 31, 2010 | |||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
Convertible senior debentures due 2014
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$ | 45,090 | $ | 44,630 | ||||
Convertible senior debentures due 2024
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441 | 31,289 | ||||||
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45,531 | 75,919 | ||||||
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Less: current portion
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— | (31,289 | ) | |||||
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Convertible senior debentures — non-current
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$ | 45,531 | $ | 44,630 | ||||
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• | during any fiscal quarter commencing after June 30, 2010 if the closing sale price per share of Company common stock is greater than or equal to 120% of the conversion price for at least 20 trading days during the period of 30 trading days ending on the last day of the preceding fiscal quarter; | ||
• | during the five day period immediately following any 10 consecutive trading day period in which the trading price per $1,000 principal amount of 2014 Debentures for each trading day of such period was less than 100% of the product of the closing sale price per share of Company common stock multiplied by the conversion rate on each such trading day; | ||
• | If a fundamental change (as defined) occurs, including sale of all or substantially all of the Company’s common stock or assets, liquidation, dissolution or a change in control. |
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Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(In thousands) | (In thousands) | |||||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
General and
administrative
expense
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$ | 844 | $ | 775 | $ | 2,845 | $ | 2,592 | ||||||||
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$ | 844 | $ | 775 | $ | 2,845 | $ | 2,592 | ||||||||
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1) | Market-based; | ||
2) | performance-based; and | ||
3) | service-based. |
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Safeguard Primary Ownership | ||||
Partner Company | as of September 30, 2011 | Accounting Method | ||
Alverix, Inc.
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49.6% | Equity | ||
Good Start
Genetics, Inc.
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26.3% | Equity | ||
NovaSom, Inc.
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31.7% | Equity | ||
NuPathe, Inc.
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17.9% | Available-for-sale (1) | ||
PixelOptics, Inc.
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24.7% | Equity | ||
Putney, Inc.
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30.1% | Equity | ||
Tengion, Inc.
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2.5% | Available-for-sale (2) |
(1) | The Company’s ownership interest in NuPathe is accounted for as available-for-sale securities following NuPathe’s completion of an initial public offering in August 2010. | |
(2) | The Company’s ownership interest in Tengion is accounted for as available-for-sale securities following Tengion’s completion of an initial public offering in April 2010. |
Safeguard Primary Ownership | ||||
Partner Company | as of September 30, 2011 | Accounting Method | ||
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Advantedge
Healthcare
Solutions, Inc.
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40.2% | Equity | ||
Beyond.com, Inc.
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38.3% | Equity | ||
Bridgevine, Inc.
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22.8% | Equity | ||
MediaMath, Inc.
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22.5% | Equity (3) | ||
Swap.com
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45.6% | Equity | ||
ThingWorx, Inc.
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30.2% | Equity |
(3) | In the first quarter of 2011, the Company’s ownership interest in MediaMath increased from 17.3% to 22.4%, a threshold at which the Company believes it exercises significant influence. Accordingly, the Company changed its accounting for MediaMath from the cost method to the equity method. |
Three Months Ended September 30, 2011 | ||||||||||||||||||||
Total | ||||||||||||||||||||
Life | Total | Other | Continuing | |||||||||||||||||
Sciences | Technology | Segments | Items | Operations | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
Operating loss
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$ | — | $ | — | $ | — | $ | (5,100 | ) | $ | (5,100 | ) | ||||||||
Net income (loss)
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(4,188 | ) | 32,896 | 28,708 | (6,377 | ) | 22,331 | |||||||||||||
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Segment Assets:
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September 30, 2011
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63,278 | 50,989 | 114,267 | 310,018 | 424,285 | |||||||||||||||
December 31, 2010
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37,710 | 42,820 | 80,530 | 256,015 | 336,545 |
Three Months Ended September 30, 2010 | ||||||||||||||||||||
Total | ||||||||||||||||||||
Life | Total | Other | Continuing | |||||||||||||||||
Sciences | Technology | Segments | Items | Operations | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
Operating loss
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$ | — | $ | — | $ | — | $ | (4,256 | ) | $ | (4,256 | ) | ||||||||
Net income (loss)
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7,311 | (957 | ) | 6,354 | (5,758 | ) | 596 |
Nine Months Ended September 30, 2011 | ||||||||||||||||||||
Total | ||||||||||||||||||||
Life | Total | Other | Continuing | |||||||||||||||||
Sciences | Technology | Segments | Items | Operations | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
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Operating loss
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$ | — | $ | — | $ | — | $ | (15,554 | ) | $ | (15,554 | ) | ||||||||
Net income (loss)
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126,238 | 28,149 | 154,387 | (19,251 | ) | 135,136 |
Nine Months Ended September 30, 2010 | ||||||||||||||||||||
Total | ||||||||||||||||||||
Life | Total | Other | Continuing | |||||||||||||||||
Sciences | Technology | Segments | Items | Operations | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
Operating loss
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$ | — | $ | — | $ | — | $ | (13,999 | ) | $ | (13,999 | ) | ||||||||
Net income (loss)
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12,208 | (5,259 | ) | 6,949 | (25,481 | ) | (18,532 | ) |
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December 31, 2010 | ||||||||
(in thousands) | ||||||||
Previously | As | |||||||
Reported | Revised | |||||||
Balance Sheet:
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Ownership interests in and advances to
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$ | 60,761 | $ | 60,256 | ||||
partner companies
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Total Assets
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337,050 | 336,545 | ||||||
Accumulated deficit
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(574,802 | ) | (575,307 | ) | ||||
Equity
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246,936 | 246,431 |
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, 2010 | September 30, 2010 | |||||||||||||||
(In thousands except | (In thousands except | |||||||||||||||
per share data) | per share data) | |||||||||||||||
Previously | As | Previously | As | |||||||||||||
Reported | Revised | Reported | Revised | |||||||||||||
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Statement of Operations:
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Equity loss
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$ | (1,801 | ) | $ | (1,798 | ) | $ | (11,965 | ) | $ | (12,243 | ) | ||||
Net income (loss)
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593 | 596 | (18,254 | ) | (18,532 | ) | ||||||||||
before income taxes
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Basic loss per share
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0.03 | 0.03 | (0.89 | ) | (0.90 | ) | ||||||||||
Diluted loss per share
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0.03 | 0.03 | (0.89 | ) | (0.90 | ) |