Fair Value

12 Months Ended

Dec. 31, 2011

Fair Value [Abstract]

Fair Value

3. Fair Value

Available-for-sale securities are measured at fair value which is determined on a recurring basis according to a fair value hierarchy that prioritizes the inputs and assumptions used, and the valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described 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 financial instruments for which all significant inputs are observable, either directly or indirectly;
Level 3:	Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

The determination of a financial instrument's level within the fair value hierarchy is based on an assessment of the lowest level of any input that is significant to the fair value measurement. The Company considers observable data to be market data which is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.

Level 1 investments, which include investments that are valued based on quoted market prices in active markets, consisted of U.S. Treasury securities. Level 2 investments, which include investments that are valued based on quoted prices in markets that are not active, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency, consisted of corporate obligations. Level 3 investments consisted of auction rate securities. The Company did not transfer any investments into or out of Levels 1, 2 and 3 during the years ended December 31, 2011 or 2010.

The following table presents the Company's available-for-sale securities by level within the fair value hierarchy (in thousands):

	Fair value measurement using:
	Quoted prices in active markets for identical assets (Level 1)		Other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
As of December 31, 2011
Cash equivalents—money market funds	$	66	$	0	$	0	$	66
Short-term investments:
U.S. Treasury securities		227,718		0		0		227,718
Corporate obligations		0		9,564		0		9,564
Auction rate securities		0		0		5,780		5,780
Other non-current assets—U.S. Treasury securities		304		0		0		304
Total	$	228,088	$	9,564	$	5,780	$	243,432
	Fair value measurement using:
	Quoted prices in active markets for identical assets (Level 1)		Other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
As of December 31, 2010
Cash equivalents—money market funds	$	10,613	$	0	$	0	$	10,613
Short-term investments:
U.S. Treasury securities		249,276		0		0		249,276
Corporate obligations		0		11,406		0		11,406
Long-term investments—auction rate securities		0		0		13,031		13,031
Other non-current assets—U.S. Treasury securities		303		0		0		303
Total	$	260,192	$	11,406	$	13,031	$	284,629

As of December 31, 2011, the Company held auction rate securities valued at $5.8 million that have failed at auction and are currently illiquid. Liquidity of these investments is subject to a successful auction process, redemption of the investment, a sale of the security in a secondary market or a negotiated or adjudicated resolution. Each of the securities continues to pay interest according to the stated terms on a monthly basis. The interest rate on these auction rate securities is no longer established based on an auction process but is established according to the terms of the issue. As of December 31, 2011, the interest rate of each of the auction rate securities was set at the 30-day London Interbank Offering rate plus 225 basis points. The Company considers the market for these securities to be inactive and distressed. Accordingly, fair value for the auction rate securities has been determined using level 3 inputs including a probability-weighted discounted cash flow analysis. This analysis relies upon certain estimates, including the probability-weighted term to an orderly liquidation and the discount rate applied to future cash flows. The discount rate used in the analysis is based on the observed comparable yield of securities with similar characteristics, adjusted for illiquidity, credit risk and other factors.

In 2011, the Company recorded an $8.7 million realized loss related to an other-than-temporary impairment in the value of its auction rate securities, $1.4 million of which was reflected as an unrealized loss as of December 31, 2010. This resulted in a new carrying value of $5.8 million. The Company periodically assesses its strategy regarding its holdings in auction rate securities based on several factors, including the continued failure of future auctions, failure of the investment to be redeemed, further deterioration of the credit rating of the investment, market risk and other factors. The loss recorded in 2011 followed a change in management's investment strategy during the fourth quarter of 2011 under which the Company no longer intends to hold these investments until recovery of substantially all of the cost basis of the investments.

The following table contains a roll-forward of the fair value of the Company's auction rate securities where fair value is determined using Level 3 inputs (in thousands):

	December 31,
	2011			2010
Balance, beginning of year	$	13,031		$	12,459
Unrealized gain (loss) included in other comprehensive income (loss)		(240	)		572
Losses deemed other than temporary reclassified from other comprehensive loss		1,659			0
Impairment losses included in interest income (loss), net		(8,670	)		0
Balance, end of year	$	5,780		$	13,031