Fair Value of Financial Instruments



NOTE 2.	Fair Value of Financial Instruments

The Company's cash and cash equivalents, short-term investments, and long-term investments consist of the following:



	December 31, 2014
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(in thousands)
Cash and cash equivalents:
Cash	$	36,024	$	—	$	—		$	36,024
Money market funds	39,180		—		—			39,180
U.S. government agencies	300		—		—			300
Commercial paper	1,000		—		—			1,000
Total	76,504		—		—			76,504
Short-term investments:
Commercial paper	4,998		1		—			4,999
Corporate bonds	12,438		6		(6		)	12,438
U.S. government agencies	33,280		3		(6		)	33,277
Total	50,716		10		(12		)	50,714
Long-term investments:
Asset-backed securities	16,092		5		(3		)	16,094
U.S. government agencies	20,243		22		(10		)	20,255
Corporate bonds	3,101		—		(2		)	3,099
Total	39,436		27		(15		)	39,448
Total	$	166,656	$	37	$	(27	)	$	166,666



	December 31, 2013
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(in thousands)
Cash and cash equivalents:
Cash	$	27,488	$	—	$	—		$	27,488
Money market funds	183		—		—			183
Commercial paper	14,697		1		—			14,698
Total	42,368		1		—			42,369
Short-term investments:
Commercial paper	32,784		6		—			32,790
Corporate bonds	16,894		11		—			16,905
Municipal bonds	1,128		—		—			1,128
U.S. government agencies	4,004		—		—			4,004
Total	54,810		17		—			54,827
Long-term investments:
Asset-backed securities	5,497		4		—			5,501
U.S. government agencies	14,835		1		(3		)	14,833
Corporate bonds	15,256		22		(4		)	15,274
Total	35,588		27		(7		)	35,608
Total	$	132,766	$	45	$	(7	)	$	132,804

The following table sets forth by level within the fair value hierarchy the fair value of the Company's available-for-sale securities measured on a recurring basis, excluding cash and money market funds:



	December 31, 2014
	Level 1		Level 2		Level 3		Fair Value
	(in thousands)
Commercial paper	$	—	$	5,999	$	—	$	5,999
U.S. government agencies	—		53,832		—		53,832
Corporate bonds	—		15,537		—		15,537
Asset-backed securities	—		16,094		—		16,094
Total	$	—	$	91,462	$	—	$	91,462



	December 31, 2013
	Level 1		Level 2		Level 3		Fair Value
	(in thousands)
Commercial paper	$	—	$	47,488	$	—	$	47,488
U.S. government agencies	—		18,837		—		18,837
Municipal bonds	—		1,128		—		1,128
Corporate bonds	—		32,179		—		32,179
Asset-backed securities	—		5,501		—		5,501
Total	$	—	$	105,133	$	—	$	105,133

The following summarizes the fair value of securities classified as available-for-sale by contractual maturity:



	December 31, 2014
	Mature within One Year		After One Year through Two Years		Over Two Years		Fair Value
	(in thousands)
Commercial paper	$	5,999	$	—	$	—	$	5,999
U.S. government agencies	33,577		20,255		—		53,832
Corporate bonds	12,438		3,099		—		15,537
Asset-backed securities	—		7,327		8,767		16,094
Total	$	52,014	$	30,681	$	8,767	$	91,462



	December 31, 2013
	Mature within One Year		After One Year through Two Years		Over Two Years		Fair Value
	(in thousands)
Commercial paper	$	47,488	$	—	$	—	$	47,488
U.S. government agencies	4,004		14,833		—		18,837
Municipal bonds	1,128		—		—		1,128
Corporate bonds	16,905		15,274		—		32,179
Asset-backed securities	—		—		5,501		5,501
Total	$	69,525	$	30,107	$	5,501	$	105,133

At December 31, 2014 and 2013, derivative financial instruments, consisting of foreign currency forward contracts, were valued at $0 as the contracts were entered into on the last day of the respective reporting periods. These instruments were valued using Level 2 inputs.

There were no transfers between Level 1, Level 2 or Level 3 of the fair value hierarchy, as determined at the end of each reporting period.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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