Fair Value Measurement

12 Months Ended

Dec. 31, 2015

4.	Fair Value Measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

In determining the fair value of our financial assets, the Company predominately uses the market approach. In determining the fair value of all its money market funds, certificates of deposit, municipal bonds, corporate bonds, and U.S. treasury bills, the Company utilizes non-binding quotes provided by our five investment brokers. We received one non-binding broker quote for each financial asset as of the balance sheet date.

Factors used in determining the fair value of our financial assets and liabilities are summarized into three levels as established in the fair value hierarchy framework. The three levels of the fair value hierarchy are described below.

Level 1—Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets.

Level 2—Inputs to the valuation methodology include:

•

Quoted prices for similar assets or liabilities in active markets;

•

Quoted prices for identical or similar assets or liabilities in inactive markets;

•

Inputs other than quoted prices that are observable for the asset or liability;

•

Inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3—Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

In determining the fair value measurement of our financial assets, the fair value measurement level within the hierarchy is based on the lowest level input and is applied to each financial asset. Valuation techniques are used to maximize the use of observable inputs and minimize the use of unobservable inputs.

The following table summarizes the Company’s marketable securities at December 31, 2015 and 2014 measured at fair value on a recurring basis (in thousands):


	December 31, 2015							December 31, 2014
	Cost		Gross Unrealized Gains (Losses)			Recorded Basis		Cost		Gross Unrealized Gains (Losses)			Recorded Basis
Current:
Cash Equivalents:
Money Market Funds	$	21,312	$	0		$	21,312	$	17,110	$	0		$	17,110
Available for Sale:
Certificates of Deposit		0		0			0		8,330		(43	)		8,287
VRDN		0		0			0		21,670		0			21,670
Available for Sale—Restricted:
Money Market Funds		76,023		0			76,023		3,776		0			3,776
Certificate of Deposit		10,000		0			10,000		0		0			0

Total Current Investments		107,335		0			107,335		50,886		(43	)		50,843

Long term:
Available-for-sale:
Money Market Funds	$	4	$	0		$	4	$	14,944	$	(14	)	$	14,930
Municipal bonds		3,135		(3	)		3,132		3,843		7			3,850
Corporate bonds		2,970		(24	)		2,946		2,153		(3	)		2,150
Available for Sale—Restricted:
Money Market Funds		175,869		0			175,869		46,426		0			46,426
U.S. Treasuries		4,752		1			4,753		3,847		0			3,847
Municipal bonds		3,613		(1	)		3,612		4,352		21			4,373
Corporate bonds		2,996		(24	)		2,972		2,130		(3	)		2,127
Certificate of Deposit		496		(1	)		495		115,745		0			115,745

Total Long Term Investments		193,835		(52	)		193,783		193,440		8			193,448

Total Investments	$	301,170	$	(52	)	$	301,118	$	244,326	$	(35	)	$	244,291

The following table summarizes the Company’s financial assets measured at fair value on a recurring basis by fair value hierarchy level (in thousands):


	December 31, 2015								December 31, 2014
	Total Recorded Basis		Level 1		Level 2		Level 3		Total Recorded Basis		Level 1		Level 2		Level 3
Cash Equivalents:
Money Market	$	21,312	$	0	$	21,312	$	0	$	17,110	$	0	$	17,110	$	0

Available for Sale—Unrestricted:
Money Market Funds	$	4	$	0	$	4	$	0	$	0	$	0	$	0	$	0
Municipal bonds		3,132		241		2,891		0		3,850		355		3,495		0
Corporate bonds		2,946		2,291		655		0		2,150		1,681		469		0
Certificate of Deposit		0		0		0		0		23,217		0		23,217		0
VRDN		0		0		0		0		21,670		0		21,670		0
Available for Sale—Restricted:
Money Market		251,892		17		251,875		0		50,202		0		50,202		0
Certificate of Deposit		10,495		0		10,495		0		115,745		0		115,745		0
U.S. Treasuries		4,753		4,753		0		0		3,847		1,622		2,225		0
Municipal bonds		3,612		389		3,223		0		4,373		236		4,137		0
Corporate bonds		2,972		2,285		687		0		2,127		1,698		429		0

Total Available for Sale Securities		279,806		9,976		269,830		0		227,181		5,592		221,589		0

Total Investments	$	301,118	$	9,976	$	291,142	$	0	$	244,291	$	5,592	$	238,699	$	0

- 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.

+ References + Details