Fair Value Measurements

9 Months Ended

Sep. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables summarize our fair value hierarchy for assets and liabilities measured at fair value on a recurring basis (in thousands):

	Fair Value Measurements at Reporting Date Using
Description	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
As of September 30, 2013
Cash equivalents:
Money market funds	$	8,144	$	8,144	$	—
U.S. treasury securities	5,204		5,204		—
Total cash equivalents	13,348		13,348		—
Marketable securities:
U.S. treasury securities	35,005		35,005		—
Certificates of deposit	10,490		—		10,490
Mutual funds	466		466		—
Total marketable securities	45,961		35,471		10,490
Total	$	59,309	$	48,819	$	10,490

	Fair Value Measurements at Reporting Date Using
Description	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
As of December 31, 2012
Cash equivalents:
Money market funds	$	105,141	$	105,141	$	—
Certificates of deposit	1,391		—		1,391
Total cash equivalents	106,532		105,141		1,391
Marketable securities:
U.S. treasury securities	40,015		40,015		—
Certificates of deposit	11,738		—		11,738
Mutual funds	387		387		—
Total marketable securities	52,140		40,402		11,738
Total	$	158,672	$	145,543	$	13,129

There were no transfers in or out of Level 1, Level 2, or Level 3 investments during the nine months endedSeptember 30, 2013.

For fair values determined by Level 1 inputs, which utilize quoted prices in active markets for identical assets, the level of judgment required to estimate fair value is relatively low. We value our investments in money market funds, U.S. treasury securities and mutual funds using Level 1 inputs. Fair values determined by Level 2 inputs, which utilize data points that are observable such as quoted prices, interest rates and yield curves and fair values determined by Level 3 inputs, which utilize unobservable data points support by little or no market activities, require the exercise of judgment and use of estimates, that if changed, could significantly affect our statement of financial position and results of operations. We value our investments in certificates of deposit using Level 2 inputs.

Our Level 2 securities are initially valued at the transaction price and subsequently valued and reported utilizing fair values provided by our investment managers who estimate the fair value using inputs other than quoted prices that are observable either directly or indirectly, such as quotes from multiple third-party pricing vendors, fund or trust companies and quoted prices for securities with similar maturity and rating features. We perform additional procedures to corroborate the fair value of our securities, including the comparison of fair values provided by our investment managers to those obtained from other reliable sources.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain non-financial assets and liabilities are measured at fair value on a nonrecurring basis in accordance with authoritative guidance. These include items such as non-financial assets and liabilities initially measured at fair value in a business combination and non-financial long-lived asset groups measured at fair value for an impairment assessment. In general, non-financial assets including goodwill, intangible assets, and property and equipment are measured at fair value when there is an indication of impairment and are recorded at fair value only when any impairment is recognized.

The following table summarizes our assets and liabilities measured at fair value on a nonrecurring basis during the three and nine months ended September 30, 2013, the respective input levels based on the fair value hierarchy contained in fair value measurements and disclosures accounting guidance and the effect of the measurements on the statement of operations (in thousands):

	Fair Value Measurements at
	September 30, 2013
	using:
			Quoted Prices in
			Active Markets		Significant		Losses for the
			for Identical		Unobservable		Nine Months Ended
Description	Fair Value		Liabilities (Level 1)		Inputs (Level 3)		September 30, 2013
Facility Exit Liabilities	$	2,427	$	504	$	1,923	$	2,414
Leasehold improvements	—		—		—		1,733
Other assets	—		—		—		650

Facility Exit Liabilities. In connection with our restructuring in August 2013, (see footnote 8), and the exit of our operating lease on a facility in San Diego, which expires in July 2015, we determined the fair values of our remaining lease liability and remaining tenant improvement liabilities as of the cease-use date. The fair value of the remaining tenant improvement liabilities was determined using the aggregate of the remaining committed purchase orders for construction of the improvements (Level 1 inputs). The fair value of the remaining lease liability was determined as the present value of the remaining payments due under the lease and ancillary costs, reduced by estimated sublease rental income that could be reasonably obtained from the property, discounted using a credit-adjusted risk-free interest rate (Level 3 inputs). We based our estimated future payments, net of estimated future sublease payments, on current rental rates available in the local real estate market, and our evaluation of the ability to sublease the facility. The fair values were recorded as liabilities at the cease-use date with a corresponding expense recognized in restructuring costs in the condensed consolidated statement of operations.

Leasehold Improvements. In connection with our restructuring in August 2013 we determined that the carrying values of the leasehold improvement assets associated with our vacated leased facility were no longer recoverable, and, as a result, we recognized an asset impairment charge during the three and nine months ended September 30, 2013, which is reported in restructuring costs in the condensed consolidated statement of operations.

Other Assets. In connection with our restructuring in August 2013 and the reduction in our estimate of future cash flows to be generated by our AMD LDTs, we determined that the carrying values of our AMD LDT licensed technology and prepaid minimum royalty balance (see footnote 8) were no longer recoverable, and, as a result, we recognized asset impairment charges during the three and nine months ended September 30, 2013, which is reported in restructuring costs in the condensed consolidated statement of operations.

Fair Value of Other Financial Instruments

The carrying amounts of certain of our financial instruments, including cash and cash equivalents, accounts payable and accrued expenses, approximate fair value due to their short-term nature. Based on borrowing rates currently available to us for bank loans with similar terms, management believes that the fair values of our bank loans approximates their respective carrying values. The carrying amounts and fair values of our Convertible Senior Notes are as follows (in thousands):

	September 30, 2013				December 31, 2012
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Convertible Senior Notes	$	130,000	$	124,963	$	130,000	$	156,000

At September 30, 2013 and December 31, 2012, the fair values of our Convertible Senior Notes were based on quoted prices of similar instruments (Level 1).