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Investments and Fair Value Measurement

12 Months Ended

Dec. 31, 2012

Investments and Fair Value Measurement [Abstract]

NOTE 2 – INVESTMENTS AND FAIR VALUE MEASUREMENT

The table below summarizes the Company’s available-for-sale securities (in thousands):


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Estimated Fair Value
December 31, 2012
Cash equivalents:
U.S. government sponsored entity debt securities	$	2,997	$	—	$	—		$	2,997
Money market funds		15,839		—		—			15,839

Total		18,836		—		—			18,836

Marketable securities:
U.S. government sponsored entity debt securities		54,426		26		—			54,452

Total		54,426		26		—			54,452

Total cash equivalents and marketable securities	$	73,262	$	26	$	—		$	73,288

December 31, 2011
Cash equivalents:
Money market funds	$	15,258		—		—		$	15,258

Total		15,258		—		—			15,258

Marketable securities:
U.S. government sponsored entity debt securities		27,020		—		(7	)		27,013
U.S. treasury debt securities		751		1		—			752
Corporate debt securities		39,583		18		—			39,601

Total		67,354		19		(7	)		67,366

Total cash equivalents and marketable securities	$	82,612	$	19	$	(7	)	$	82,624

As of December 31, 2012, all of investments had maturity dates within two years and there were no material unrealized losses during 2012. Approximately 83% of the Company’s available-for-sale securities mature within the next twelve months of the date of the balance sheet date and approximately 17% of the Company’s available-for-sale securities have maturities between twelve and twenty-four months from the date of the balance sheet date. The Company had no material realized losses or other-than-temporary impairments of available-for-sale securities for the years ended December 31, 2012, 2011 and 2010.

Fair Value Measurement

The Company measures certain financial assets at fair value on a recurring basis, including cash equivalents and available-for-sale securities. The fair value of these assets was determined based on a three-tier hierarchy under the authoritative guidance for fair value measurements and disclosures that prioritizes the inputs used in measuring fair value as follows:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability;

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

When observable market prices for identical securities that are traded in less active markets are used, the Company classifies its available-for-sale debt instruments as Level 2. When observable market prices for identical securities are not available, available-for-sale debt instruments are priced using benchmark curves, benchmarking of like securities, sector groupings, and matrix pricing as well as model processes. These models are proprietary valuation models of pricing providers or brokers. These valuation models incorporate a number of inputs, including, listed in approximate order of priority: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data including market research publications. For certain security types, additional inputs may be used, or some of the Standard Inputs may not be applicable. Evaluators may prioritize inputs differently on any given day for any security based on market conditions, and not all inputs listed are available for use in the evaluation process for each security evaluation on any given day.

The fair value measurements of cash equivalents and available-for-sale marketable securities are identified at the following levels within the fair value hierarchy (in thousands):


	December 31, 2012 Fair Value Measurements
	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents:
U.S. government sponsored entity debt securities	$	2,997	$	—	$	2,997	$	—
Money market funds		15,839		15,839		—		—

Total		18,836		15,839		2,997		—
Marketable securities:
U.S. government sponsored entity debt securities		54,452		—		54,452		—

Total		54,452		—		54,452		—

Total cash equivalents and marketable securities	$	73,288	$	15,839	$	57,449	$	—


	December 31, 2011 Fair Value Measurements
	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents:
Money market funds	$	15,258	$	15,258	$	—	$	—

Total		15,258		15,258		—		—
Marketable securities:
U.S. government sponsored entity debt securities		27,013		—		27,013		—
U.S. treasury debt securities		752		—		752		—
Corporate debt securities		39,601		—		39,601		—

Total		67,366		—		67,366		—

Total cash equivalents and marketable securities	$	82,624	$	15,258	$	67,366	$	—