FAIR VALUE MEASUREMENTS

12 Months Ended

Dec. 31, 2011

FAIR VALUE MEASUREMENTS

6.           FAIR VALUE MEASUREMENTS

We account for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

● Level 1: Quoted prices in active markets for identical assets or liabilities;

● Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

● Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The following table represents the fair value hierarchy for our financial assets (cash equivalents and investments in marketable securities) measured at fair value on a recurring basis (in thousands):

	Level 1		Level 2		Level 3		Total
December 31, 2011:
Available for sale securities:
Money market funds(1)	$	9,237	$	—	$	—	$	9,237
December 31, 2010:
Available for sale securities:
Money market funds(1)	$	39,283	$	—	$	—	$	39,283

(1) Included in “Cash and cash equivalents” in the consolidated balance sheets as of December 31, 2011 and 2010 in addition to $20.6 million and $20.3 million, respectively, of cash. Unrealized gains and losses on money market funds were nominal due to the short-term nature of the investments.

The following table provides a summary of changes in fair value of our Level 3 financial assets, auction rate securities and auction rate securities rights (“ARS Rights”), for each of the two years in the period ended December 31, 2011 (in thousands):

	Auction Rate Securities			ARS Rights
Balance, December 31, 2009	$	6,503		$	497
Total realized and unrealized gains (losses)		497			(4	)
Issuance of ARS Rights		(7,000	)		(493	)
Balance, December 31, 2010		—			—
Balance, December 31, 2011	$	—		$	—

Market risk associated with our variable rate term loan, revolving credit facility and fixed rate other liabilities relates to the potential negative impact to future earnings and reduction in fair value, respectively, from an increase in interest rates. The following table presents information about our term loan, revolving credit facility and other liabilities (in thousands):

	December 31,
	2011				2010
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Term loan	$	58,750		58,571	$	19,750	$	19,750
Other liabilities		501		509		636		653
	$	59,251	$	59,080	$	20,386	$	20,403

We estimate the fair values of our term loan, revolving credit facility and other liabilities based on current market rates of interest.