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NOTE 9—FAIR VALUE MEASUREMENTS
The following tables present the Company's assets and liabilities that are measured at fair value on a recurring basis:
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December 31, 2011 |
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Quoted Market
Prices in Active
Markets for
Identical Assets
(Level 1) |
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Significant
Other
Observable
Inputs
(Level 2) |
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Significant
Unobservable
Inputs
(Level 3) |
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Total
Fair Value
Measurements |
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(In thousands)
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Assets: |
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Cash equivalents: |
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Treasury and government agency money market funds |
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$ |
321,314 |
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$ |
— |
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$ |
— |
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$ |
321,314 |
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Commercial paper |
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— |
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237,942 |
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— |
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237,942 |
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Time deposits |
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— |
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4,750 |
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— |
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4,750 |
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Marketable securities: |
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Corporate debt securities |
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— |
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48,705 |
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— |
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48,705 |
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States of the U.S. and state political subdivisions |
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— |
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112,323 |
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— |
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112,323 |
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Equity security |
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4,667 |
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— |
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— |
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4,667 |
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Long-term investments: |
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Auction rate security |
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— |
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— |
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5,870 |
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5,870 |
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Marketable equity securities |
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74,691 |
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— |
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— |
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74,691 |
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| |
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Total |
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$ |
400,672 |
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$ |
403,720 |
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$ |
5,870 |
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$ |
810,262 |
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Liabilities: |
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Contingent consideration arrangement |
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$ |
— |
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$ |
— |
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$ |
(10,000 |
) |
$ |
(10,000 |
) |
| |
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December 31, 2010 |
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|
Quoted Market
Prices in Active
Markets for
Identical Assets
(Level 1) |
|
Significant
Other
Observable
Inputs
(Level 2) |
|
Significant
Unobservable
Inputs
(Level 3) |
|
Total
Fair Value
Measurements |
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(In thousands)
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Assets: |
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Cash equivalents: |
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Treasury and government agency money market funds |
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$ |
275,108 |
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$ |
— |
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$ |
— |
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$ |
275,108 |
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Commercial paper |
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— |
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309,183 |
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— |
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309,183 |
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Time deposits |
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— |
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26,050 |
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— |
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26,050 |
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Marketable securities: |
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Corporate debt securities |
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— |
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238,163 |
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— |
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238,163 |
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States of the U.S. and state political subdivisions |
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— |
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110,621 |
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— |
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110,621 |
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U.S. Treasury securities |
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199,899 |
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— |
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— |
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199,899 |
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Equity security |
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15,314 |
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— |
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— |
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15,314 |
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Long-term investments: |
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Auction rate securities |
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— |
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— |
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13,100 |
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13,100 |
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| |
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Total |
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$ |
490,321 |
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$ |
684,017 |
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$ |
13,100 |
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$ |
1,187,438 |
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The following table presents the changes in the Company's assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3):
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For the Year Ended |
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December 31, 2011 |
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December 31, 2010 |
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Auction Rate
Securities |
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Contingent
Consideration
Arrangement |
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Auction Rate
Securities |
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(In thousands)
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Balance at January 1 |
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$ |
13,100 |
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$ |
— |
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$ |
12,635 |
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Total net (losses) gains (realized and unrealized): |
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Included in other comprehensive income |
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(2,230 |
) |
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— |
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|
465 |
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Fair value at date of acquisition |
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— |
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(40,000 |
) |
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— |
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Settlements |
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(5,000 |
) |
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30,000 |
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— |
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| |
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Balance at December 31 |
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$ |
5,870 |
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$ |
(10,000 |
) |
$ |
13,100 |
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There are no gains or losses included in earnings for the years ended December 31, 2011 and 2010, relating to the Company's assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs. For the year ended December 31, 2009, a loss of $57.2 million was included in earnings related to the CVR, which was accounted for as a derivative asset and maintained at fair value relying on significant unobservable inputs. This loss is unrealized and included in "Other income (expense), net" in the accompanying consolidated statement of operations.
Auction rate securities
The Company's auction rate securities are valued by discounting the estimated future cash flow streams of the securities over the lives of the securities. Credit spreads and other risk factors are also considered in establishing fair value. During the first quarter of 2011, one of the auction rate securities was redeemed at its par value of $5.0 million. The cost basis of the auction rate securities is $10.0 million and $15.0 million at December 31, 2011 and December 31, 2010, respectively, with gross unrealized losses of $4.1 million and $1.9 million at December 31, 2011 and December 31, 2010, respectively. The unrealized losses are included in "Accumulated other comprehensive (loss) income" in the accompanying consolidated balance sheet. At December 31, 2011, the remaining auction rate security is rated A/WR and matures in 2035. The Company does not consider the auction rate security to be other-than-temporarily impaired at December 31, 2011, due to its high credit rating and because the Company does not intend to sell this security and it is not more likely than not that the Company will be required to sell this security before the recovery of its amortized cost basis, which may be maturity. Contingent consideration arrangement
See Note 5 for information regarding the contingent consideration arrangement related to the OkCupid acquisition. |