Short-Term Investments and Fair Value Measurement

The Company’s investment policy is consistent with the definition of available-for-sale securities. The Company does not buy and hold securities principally for the purpose of selling them in the near future. The Company’s policy is focused on the preservation of capital, liquidity and return. From time to time, the Company may sell certain securities but the objectives are generally not to generate profits on short-term differences in price. The following table summarizes, by major security type, the Company’s assets that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy:



	As of
	March 31, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(in thousands)
Cash	$	394,726	$	—	$	—		$	394,726
Level 1 securities (1):
Money market funds	6,134		—		—			6,134
Level 2 securities (3):
Corporate debt securities	104,998		769		(65		)	105,702
Government and agency securities	253,897		417		(147		)	254,167
Asset and mortgage-backed securities	48,452		228		(15		)	48,665
	$	808,207	$	1,414	$	(227	)	$	809,394
Less: Long-term restricted cash (1)								(4,868		)
Total cash, cash equivalents and short-term investments								$	804,526



	As of
	December 31, 2011
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(in thousands)
Cash	$	388,941	$	—	$	—		$	388,941
Level 1 securities (2):
Money market funds	123,608		—		—			123,608
Level 2 securities (3):
Corporate debt securities	112,264		603		(214		)	112,653
Government and agency securities	175,464		694		(56		)	176,102
Asset and mortgage-backed securities	941		62		—			1,003
	$	801,218	$	1,359	$	(270	)	$	802,307
Less: Long-term restricted cash (2)								(4,496		)
Total cash, cash equivalents and short-term investments								$	797,811


(1)	Includes $1.2 million classified in cash and cash equivalents and $4.9 million classified in other non-current assets.


(2)	Includes $119.1 million classified in cash and cash equivalents and $4.5 million classified in other current assets and non-current assets.


(3)	Included in short-term investments.

Fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability. The hierarchy level assigned to each security in the Company’s available-for-sale portfolio and cash equivalents is based on its assessment of the transparency and reliability of the inputs used in the valuation of such instrument at the measurement date. The fair value of available-for-sale securities and cash equivalents included in the Level 1 category is based on quoted prices that are readily and regularly available in an active market. The fair value of available-for-sale securities included in the Level 2 category is based on observable inputs, such as quoted prices for similar assets at the measurement date; quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly. These values were obtained from an independent pricing service and were evaluated using pricing models that vary by asset class and may incorporate available trade, bid and other market information and price quotes from well-established independent pricing vendors and broker-dealers. The Company's procedures include controls to ensure that appropriate fair values are recorded, such as comparing prices obtained from multiple independent sources. See Note 5 to the consolidated financial statements for further information regarding the fair value of the Company’s Senior Convertible Notes and Senior Notes.

Because the Company does not intend to sell the investments that are in an unrealized loss position and it is not likely that the Company will be required to sell any investments before recovery of their amortized cost basis, the Company does not consider those investments with an unrealized loss to be other-than-temporarily impaired at March 31, 2012. There were no material other-than-temporary impairments or credit losses related to available-for-sale securities in the three months ended March 31, 2012 and 2011. In addition, there were no material gross realized gains or losses in the three months ended March 31, 2012 and 2011.

The estimated fair value of short-term investments by contractual maturity as of March 31, 2012 is as follows:



	(in thousands)
Due within one year	$	48,650
Due after one year and through 5 years	329,494
Due after 5 years and through 10 years	10,191
Due after 10 years	20,199
Total short-term investments	$	408,534