4. Fair Value

The Company utilizes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques (market approach, income approach and cost approach that relate to its financial assets and financial liabilities). The levels of the hierarchy are described as follows:

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Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities.

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Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

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Level 3: Unobservable inputs that reflect the Company’s own assumptions.

Management’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of financial assets and liabilities and their placement within the fair value hierarchy. The Company’s financial assets that are accounted for at fair value on a recurring basis are presented in the table below:


	Marketable Securities Fair Value as of April 30, 2014
	Level 1		Level 2		Level 3		Total
Assets:
Corporate bonds	$	140,411	$	—	$	—	$	140,411
Municipal and pre-refunded municipal bonds		—		113,238		—		113,238
Certificates of deposit		—		24,857		—		24,857
Commercial paper		—		24,684		—		24,684
Treasury bills		17,914		—		—		17,914
Mutual funds, held in rabbi trust		2,600		—		—		2,600
Federal government agencies		1,786		—		—		1,786

	$	162,711	$	162,779	$	—	$	325,490


	Marketable Securities Fair Value as of January 31, 2014
	Level 1		Level 2		Level 3		Total
Assets:
Corporate bonds	$	309,423	$	—	$	—	$	309,423
Municipal and pre-refunded municipal bonds		—		211,437		—		211,437
Certificates of deposit		—		39,854		—		39,854
Commercial paper		—		35,107		—		35,107
Treasury bills		46,455		—		—		46,455
Mutual funds, held in rabbi trust		1,666		—		—		1,666
Federal government agencies		4,293		—		—		4,293

	$	361,837	$	286,398	$	—	$	648,235


	Marketable Securities Fair Value as of April 30, 2013
	Level 1		Level 2		Level 3		Total
Assets:
Corporate bonds	$	153,376	$	—	$	—	$	153,376
Municipal and pre-refunded municipal bonds		—		126,594		—		126,594
Certificates of deposit		—		42,345		—		42,345
Commercial paper		—		8,482		—		8,482
Treasury bills		21,731		—		—		21,731
Mutual funds, held in rabbi trust		337		—		—		337
Federal government agencies		11,844		—		—		11,844

	$	187,288	$	177,421	$	—	$	364,709

Level 1 assets consist of financial instruments whose value has been based on inputs that use, as their basis, readily observable market data that are actively quoted and are validated through external sources, including third-party pricing services and brokers.

Level 2 assets consist of financial instruments whose value has been based on quoted prices for similar assets and liabilities in active markets as well as quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3 assets consist of financial instruments where there has been no active market. During April 2013, the Company sold all of its remaining auction rate securities (“ARS”) for approximately $4,580 in cash. The Company’s ARS had a par value and recorded fair value of $4,925 and $4,330, respectively, prior to the sale in April 2013.

The fair value of cash and cash equivalents (Level 1) approximate carrying value since cash and cash equivalents consist of short-term highly liquid investments with maturities of three months or less. As of April 30, 2014, cash and cash equivalents included cash on hand, cash in banks, money market accounts and marketable securities with maturities of less than three months at the time of purchase.