Marketable Securities and Fair Value Measurements

As of December 31, 2012 and 2011, the estimated fair value of our short-term and long-term investments, classified as available for sale, are as follows (in thousands):

Short-term



December 31, 2012	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Commercial paper	$	4,646	$	1	$	—		$	4,647
Corporate bonds	18,767		7		(4		)	18,770
U.S. dollar dominated foreign corporate bonds	5,060		9		(1		)	5,068
Total	$	28,473	$	17	$	(5	)	$	28,485

Long-term



December 31, 2012	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. government agency bonds	$	2,069	$	1	$	—		$	2,070
Corporate bonds	16,132		16		(7		)	16,141
U.S. dollar dominated foreign corporate bonds	3,038		4		(1		)	3,041
Total	$	21,239	$	21	$	(8	)	$	21,252

Short-term



December 31, 2011	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Corporate bonds	$	4,135	$	—	$	(1	)	$	4,134
U.S. dollar dominated foreign corporate bonds	1,248		—		(5		)	1,243
U.S. government agency bonds	2,015		3		—			2,018
Total	$	7,398	$	3	$	(6	)	$	7,395

We did not have any long-term marketable securities as of December 31, 2011.

For the years ended December 31, 2012 and 2011, realized losses were immaterial. Cash and cash equivalents were not included in the table above as the gross unrealized gains and losses were not material. We have no material short-term or long-term investments that have been in a continuous unrealized loss position for greater than twelve months as of December 31, 2012. Amounts reclassified to earnings from unrealized gain or losses were immaterial in 2012 and 2011.

Our fixed-income securities investment portfolio consists of corporate bonds, U.S. government agency bonds, U.S. dollar dominated foreign corporate bonds and commercial paper that have a maximum maturity of two years. The corporate debt and government and agency securities that we invest in are generally deemed to be low risk based on their credit ratings from the major rating agencies. The longer the duration of these securities, the more susceptible they are to changes in market interest rates and bond yields. As interest rates increase, those securities purchased at a lower yield show a mark-to-market unrealized loss. The unrealized losses are due primarily to changes in credit spreads and interest rates. We expect to realize the full value of all these investments upon maturity or sale. As of December 31, 2012, these securities had a weighted average remaining duration of approximately 10 months (in thousands).



	December 31,
	2012
One year or less	$	28,485
One year through two years	21,252
	$	49,737

Fair Value Measurements

We measure the fair value of our cash equivalents and marketable securities as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We use the GAAP fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs that may be used to measure fair value:

Level 1—Quoted (unadjusted) prices in active markets for identical assets or liabilities.

Our Level 1 assets consist of money market funds and commercial paper. We did not hold any Level 1 liabilities as of December 31, 2012 or 2011.

Level 2—Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.

Our Level 2 assets consist of commercial paper, corporate bonds, U.S. dollar denominated foreign corporate bonds, U.S. government agency bonds, and our Israeli severance funds that are mainly invested in insurance policies. We obtain these fair values for level 2 investments from our asset manager for each of our portfolios. Our custody bank and asset managers independently use professional pricing services to gather pricing data which may include quoted market prices for identical or comparable financial instruments, or inputs other than quoted prices that are observable either directly or indirectly, and we are ultimately responsible for these underlying estimates.

We did not hold any Level 2 liabilities as of December 31, 2012 or 2011.

Level 3—Unobservable inputs to the valuation methodology that are supported by little or no market activity and that are significant to the measurement of the fair value of the assets or liabilities. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow ("DCF") methodologies or similar valuation techniques, as well as significant management judgment or estimation.

We did not hold any Level 3 assets or liabilities as of December 31, 2012 or 2011.

Non-Recurring Fair Value Measurements

During 2012, we recorded a goodwill impairment charge of $36.6 million related to our SCCS reporting unit as an event occurred or circumstances changed that led us to perform a goodwill impairment analysis between the annual test which required us to determine the fair value of the SCCS reporting unit (Refer to Note 5). These fair value measurements were calculated using unobservable inputs, using both the income and market approach, which are classified as Level 3 within the fair value hierarchy. Inputs for the income approach includes the amount and timing of future cash flows based on our most recent operational budgets, strategic plans, terminal growth rates assumptions and other estimates. The primary input for the market approach include market multiples for guideline companies that operate in a similar business environment.

The following table summarizes our financial assets measured at fair value on a recurring basis as of December 31, 2012 and 2011 (in thousands):



Description	Balance as of December 31, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
Cash equivalents:
Money market funds	$	86,166	$	86,166	$	—
Commercial paper	950		—		950
Short-term investments:
Commercial paper	4,647		—		4,647
Corporate bonds	18,770		—		18,770
U.S. dollar denominated foreign corporate bonds	5,068		—		5,068
Long-term investments:
U.S. government agency bonds	2,070		—		2,070
Corporate bonds	16,141		—		16,141
U.S. dollar denominated foreign corporate bonds	3,041		—		3,041
Long-term other assets:
Israeli severance funds	2,218		—		2,218
	$	139,071	$	86,166	$	52,905



Description	Balance as of December 31, 2011		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
Cash equivalents:
Money market funds	$	86,897	$	86,897	$	—
Short-term investments:
Corporate bonds	4,134		—		4,134
U.S. dollar denominated foreign corporate bonds	1,243		—		1,243
U.S. government agency bonds	2,018				2,018
Long-term other assets:
Israeli severance funds	1,859		—		1,859
	$	96,151	$	86,897	$	9,254