Fair Value Measurements

9 Months Ended

Sep. 30, 2012

Fair Value Measurements [Abstract]

FAIR VALUE MEASUREMENTS

2. FAIR VALUE MEASUREMENTS

Cash Equivalents and Short-term Investments

The financial instruments of the Company measured at fair value on a recurring basis are cash equivalents and short-term investments.

The Company’s fixed income available-for-sale securities consist of high quality, investment grade securities. The Company values these securities based on pricing from pricing vendors, who may use quoted prices in active markets for identical assets (Level 1) or inputs other than quoted prices that are observable either directly or indirectly (Level 2) in determining fair value.

The types of instruments valued based on quoted market prices in active markets include most money market securities. Such instruments are generally classified within Level 1 of the fair value hierarchy.

The types of instruments valued based on quoted prices in markets that are less active, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency are generally classified within Level 2 of the fair value hierarchy and include most U.S. treasury securities and most investment-grade corporate commercial paper.

The types of instruments valued based on unobservable inputs which reflect the reporting entity’s own assumptions or data that market participants would use in valuing an instrument are generally classified within Level 3 of the fair value hierarchy.

In May 2011, FASB issued ASU No. 2011-04, “Fair Value Measurements (Topic 820)”. This ASU provides additional guidance on fair value disclosures. This guidance contains certain updates to the measurement guidance as well as enhanced disclosure requirements. The most significant change in disclosures is an expansion of the information required for Level 3 measurements including enhanced disclosure for: (1) the valuation processes used by the reporting entity; and (2) the sensitivity of the fair value measurement to changes in unobservable inputs and the interrelationships between those unobservable inputs, if any. This guidance is effective for interim and annual periods beginning on or after December 15, 2011, with early adoption prohibited. The Company adopted the updated guidance which was effective for the Company on January 1, 2012. The adoption of this new guidance did not have a material impact on the Company’s condensed consolidated financial statements.

Financial instruments measured at fair value on a recurring basis as of September 30, 2012 and December 31, 2011 are classified based on the valuation technique in the table below:

	September 30, 2012
	Fair value measurements using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(In thousands)
Assets:
U.S. Treasury securities	$	0	$	38,985	$	0	$	38,985
Money market accounts		4,628		0		0		4,628
Total assets at fair value	$	4,628	$	38,985	$	0	$	43,613

The above table excludes $4.3 million of cash held in banks.

	December 31, 2011
	Fair value measurements using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(In thousands)
Assets:
U.S. Treasury securities	$	0	$	48,987	$	0	$	48,987
Money market accounts		3,617		0		0		3,617
Total assets at fair value	$	3,617	$	48,987	$	0	$	52,604

The above table excludes $3.7 million of cash held in banks.

Short-term Investments

	September 30, 2012
	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Fair Value
	(In thousands)
U.S. Treasury securities	$	38,979	$	6	$	0	$	38,985
Total	$	38,979	$	6	$	0	$	38,985

	December 31, 2011
	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Fair Value
	(In thousands)
U.S. Treasury securities	$	48,970	$	17	$	0	$	48,987
Total	$	48,970	$	17	$	0	$	48,987

The contractual maturities of the Company’s available-for-sale securities on September 30, 2012 and December 31, 2011 were all due within one year.