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FAIR VALUE MEASUREMENTS
 12 Months Ended
Dec. 31, 2018
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS

NOTE 4. FAIR VALUE MEASUREMENTS

Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, a three-tier fair value hierarchy has been established, which prioritizes the inputs used in measuring fair value as follows:

Level 1:

Observable inputs such as quoted prices in active markets;

Level 2:

Inputs include quoted prices for similar instruments in active markets and/or quoted prices for identical or similar instruments in markets that are not active near the measurement date; and

Level 3:

Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The Company classifies cash equivalents and available-for-sale investments within Level 1 or Level 2. The fair value of the Company’s high-quality investment grade corporate debt securities is determined using proprietary valuation models and analytical tools. These valuation models and analytical tools use market pricing or prices for similar instruments that are both objective and publicly available, including matrix pricing or reported trades, benchmark yields, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids and/or offers. The Company did not reclassify any investments between levels in the fair value hierarchy during the years ended December 31, 2018 and 2017.

The Company’s assets, which are measured at fair value on a recurring basis as of December 31, 2018 and 2017, were determined using the inputs described above:

 

 

 

 

 

Fair Value Measurements Using

 

(in millions)

Carrying

Value

 

 

Quoted Prices in

Active Markets for

Identical Assets

(Level 1)

 

 

Significant

Other

Observable

Inputs

(Level 2)

 

 

Significant

Unobservable

Inputs

(Level 3)

 

December 31, 2018:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Classified as current assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and money market funds

$

141.7

 

 

$

141.7

 

 

$

—

 

 

$

—

 

Commercial paper

 

94.6

 

 

 

—

 

 

 

94.6

 

 

 

—

 

Securities of government-sponsored entities

 

20.8

 

 

 

—

 

 

 

20.8

 

 

 

—

 

Corporate debt securities

 

393.8

 

 

 

—

 

 

 

393.8

 

 

 

—

 

Subtotal

 

650.9

 

 

 

141.7

 

 

 

509.2

 

 

 

—

 

Classified as long-term assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and money market funds

 

1.5

 

 

 

1.5

 

 

 

—

 

 

 

—

 

Certificates of deposit

 

4.0

 

 

 

4.0

 

 

 

—

 

 

 

—

 

Securities of government-sponsored entities

 

64.8

 

 

 

—

 

 

 

64.8

 

 

 

—

 

Corporate debt securities

 

151.2

 

 

 

—

 

 

 

151.2

 

 

 

—

 

Total

 

872.4

 

 

 

147.2

 

 

 

725.2

 

 

 

—

 

Less cash, cash equivalents and restricted cash

 

(147.2

)

 

 

(147.2

)

 

 

—

 

 

 

—

 

Total investments

$

725.2

 

 

$

—

 

 

$

725.2

 

 

$

—

 

December 31, 2017:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Classified as current assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and money market funds

$

170.2

 

 

$

170.2

 

 

$

—

 

 

$

—

 

Commercial paper

 

159.9

 

 

 

—

 

 

 

159.9

 

 

 

—

 

Securities of government-sponsored entities

 

7.5

 

 

 

—

 

 

 

7.5

 

 

 

—

 

Corporate debt securities

 

178.4

 

 

 

—

 

 

 

178.4

 

 

 

—

 

Subtotal

 

516.0

 

 

 

170.2

 

 

 

345.8

 

 

 

—

 

Classified as long-term assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and money market funds

 

1.5

 

 

 

1.5

 

 

 

—

 

 

 

—

 

Certificates of deposit

 

3.0

 

 

 

3.0

 

 

 

—

 

 

 

—

 

Securities of government-sponsored entities

 

10.9

 

 

 

—

 

 

 

10.9

 

 

 

—

 

Corporate debt securities

 

236.4

 

 

 

—

 

 

 

236.4

 

 

 

—

 

Total

 

767.8

 

 

 

174.7

 

 

 

593.1

 

 

 

—

 

Less cash, cash equivalents and restricted cash

 

(259.2

)

 

 

(174.6

)

 

 

(84.6

)

 

 

—

 

Total investments

$

508.6

 

 

$

0.1

 

 

$

508.5

 

 

$

—

 

 

The fair value of the 2024 Notes, calculated utilizing market quotations from an over-the-counter trading market for these notes (Level 2), was approximately $616.1 million as of December 31, 2018 and $662.1 million as of December 31, 2017. Refer to Note 5 to the consolidated financial statements for more information on the 2024 Notes.