Investments and Fair Value Disclosures

6 Months Ended

Jun. 30, 2012

Investments and Fair Value Disclosures [Abstract]

Investments and Fair Value Disclosures

3. Investments and Fair Value Disclosures

Investments in Marketable Securities

Marketable debt securities that the Company does not intend to hold to maturity are classified as available-for-sale, are carried at fair value and are included on the Company’s balance sheet as either short-term or long-term investments depending on their maturity. Investments with original maturities greater than three months that mature less than one year from the consolidated balance sheet date are classified as short-term investments. Investments with maturities greater than one year from the consolidated balance sheet date are classified as long-term investments. Available-for-sale investments are marked-to-market at the end of each reporting period, with unrealized holding gains or losses, which represent changes in the fair value of the investment, reflected in accumulated other comprehensive income (loss), a separate component of stockholders’ equity. The Company’s primary objective when investing excess cash is preservation of principal.

	June 30, 2012
	Contracted Maturity	Carrying Value
		(in thousands)
Money market funds	demand	$	53,160
Total cash equivalents		$	53,160
U.S. agency notes	30 - 382 days	$	30,708
Commercial paper	9 - 258 days		27,502
Corporate bonds	32 - 349 days		31,358
Total short-term investments		$	89,568
U.S. agency notes	368 - 514 days	$	17,991
Corporate bonds	401 days		2,414
Total long-term investments		$	20,405

Fair Value

The following table summarizes the carrying and fair value of the Company’s financial assets and liabilities (in thousands):

	June 30, 2012				December 31, 2011
	Carrying Value		Fair Value		Carrying Value		Fair Value
Assets
Cash equivalents and certificates of deposit *	$	54,165	$	54,165	$	71,147	$	71,147
Short and long-term investments		109,973		109,973		97,749		97,749
Total assets	$	164,138	$	164,138	$	168,896	$	168,896
Liabilities
Convertible senior notes **	$	84,048	$	120,000	$	81,737	$	120,000
Notes payable and bank loans		923		923		1,352		1,352
Total liabilities	$	84,971	$	120,923	$	83,089	$	121,352

* Does not include $31.1 million and $23.9 million of operating cash balances as of June 30, 2012 and December 31, 2011, respectively.

** The carrying value represents the bifurcated debt component only, while the fair value is based on the principal amount of the notes, which did not separate the liability and equity components of the debt instrument.

The carrying amounts of the Company’s other financial instruments, accounts receivable, accounts payable and accrued expenses, approximate their respective fair values due to their short-term nature. (See Note 7 Borrowings for additional information on the fair value of debt.)

The Company uses a three-tier fair value measurement hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The three tiers are defined as follows:

• Level 1. Observable inputs based on unadjusted quoted prices in active markets for identical instruments and include the Company’s investments in money market funds and certificates of deposit;

• Level 2. Inputs valued using quoted market prices for similar instruments, nonbinding market prices that are corroborated by observable market data and include the Company’s investments and marketable securities in U.S. agency notes, commercial paper and corporate bonds; and

• Level 3. Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The Company evaluates its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level of classification for each reporting period. This determination requires significant judgments to be made. There were no transfers between classifications during the periods. The following tables summarize the values (in thousands):

	June 30, 2012		Level 1		Level 2		Level 3
Money market funds	$	53,160	$	53,160	$	—	$	—
Certificates of deposit		1,005		1,005		—		—
Total cash equivalents and certificates of deposit		54,165		54,165		—		—
U.S. agency notes		48,699		—		48,699		—
Commercial paper		27,502		—		27,502		—
Corporate bonds		33,772		—		33,772		—
Total investments		109,973		—		109,973		—
Total cash equivalents, certificates of deposit and investments	$	164,138	$	54,165	$	109,973	$	—
	December  31, 2011		Level 1		Level 2		Level 3
Money market funds	$	70,142	$	70,142	$	—	$	—
Certificates of deposit		1,005		1,005		—		—
Total cash equivalents and certificates of deposit		71,147		71,147		—		—
U.S. agency notes		27,672		—		27,672		—
Commercial paper		15,735		—		15,735		—
Corporate bonds		54,342		—		54,342		—
Total investments		97,749		—		97,749		—
Total cash equivalents, certificates of deposit and investments	$	168,896	$	71,147	$	97,749	$	—

Assets Measured at Fair Value on a Nonrecurring Basis

The Company measures certain assets, including property and equipment, goodwill and intangible assets, at fair value on a nonrecurring basis. These assets are recognized at fair value when they are deemed to be other-than-temporarily impaired. During the six months ended June 30, 2012 and 2011, there were no fair value measurements of assets or liabilities measured at fair value on a nonrecurring basis subsequent to their initial recognition.