Fair Value Of Financial Instruments

9 Months Ended

Sep. 30, 2011

Fair Value Of Financial Instruments [Abstract]

Fair Value Of Financial Instruments

2.      Fair Value of Financial Instruments

Cash, Cash Equivalents and Investments

All highly liquid investments with original maturities of three months or less are considered to be cash equivalents. The carrying values of our cash equivalents and investments approximate their market values based on quoted market prices. Investments are classified as held to maturity and are carried at cost plus accrued interest. Our cash and cash equivalents are maintained in a financial institution in amounts that, at times, may exceed federally insured limits. The weighted average duration of the remaining time to maturity for our portfolio of investments as of September 30, 2011 was approximately two months. As of September 30, 2011, our investments were held in a variety of interest‑bearing instruments, consisting mainly of U.S. Treasury notes. We did not hold any derivative instruments, foreign exchange contracts, asset backed securities, mortgage backed securities, auction rate securities, or securities of issuers in bankruptcy in our investment portfolio as of September 30, 2011.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following fair value hierarchy prioritizes the inputs into valuation techniques used to measure fair value. Accordingly, we use valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs when determining fair value. The three levels of the hierarchy are as follows:

Level 1: Inputs that reflect unadjusted quoted prices in active markets that are accessible to us for identical assets or liabilities;

Level 2: Inputs include quoted prices for similar assets and liabilities in active and inactive markets or that are observable for the asset or liability either directly or indirectly; and

Level 3: Unobservable inputs that are supported by little or no market activity.

We have no assets or liabilities that were measured using quoted prices for similar assets and liabilities or significant unobservable inputs (Level 2 and Level 3 assets and liabilities, respectively) as of September 30, 2011. Our financial instruments include cash and cash equivalents, investments, accounts receivable, prepaid expenses, accounts payable and accrued liabilities. The carrying amounts of financial instruments approximate their fair value due to their short maturities. The carrying value of our cash held in money market funds totaling $68.7 million as of September 30, 2011 are included in cash and cash equivalents on our Balance Sheet and approximates market values based on quoted market prices, or Level 1 inputs.

The carrying value of investments consisted of the following as of September 30, 2011:

			Gross	Gross
		Amortized	Unrealized	Unrealized	Fair
		cost	Gains	Losses	Value
Short-term held-to-maturity securities:
U.S. Treasury notes		$       30,135	$            —	$            2	$    30,133
Certificate of deposit		584	4	1	587
U.S. Government agency securities		271	—	—	271
	Sub-total	$       30,990	$             4	$              3	$    30,991
Less: Amounts classified as restricted cash		(238)	—	—	(238)
Total due in one year or less		$       30,752	$             4	$              3	$    30,753

The carrying value of investments consisted of the following as of December 31, 2010:

		Gross	Gross
	Amortized	Unrealized	Unrealized	Fair
	cost	Gains	Losses	Value
Short-term held-to-maturity securities:
U.S. Treasury bills and notes	$       50,063	$           11	$            1	$    50,073
U.S. Government agency securities	271	6	—	277
Total due in one year or less	$       50,334	$           17	$            1	$    50,350
Long-term held-to-maturity securities:
Corporate notes	$            305	$           11	$            —	$         316
Less: Amounts classified as restricted cash	(238)	—	—	(238)
Total due in one to three years	$              67	$           11	$            —	$           78

We had no realized losses on our investments during the nine months ended September 30, 2011 or 2010. Market values were determined for each individual security in the investment portfolio. If a decline in fair value below the amortized cost basis of an investment is judged to be other-than-temporary, the cost basis of the investment is written down to fair value. Additionally, management assesses whether it intends to sell or would more-likely-than-not not be required to sell the investment before the expected recovery of the amortized cost basis. We do not intend to sell and believe it is more-likely-than-not that we will not be required to sell the investment before recovery of its amortized cost basis. All of the investments as of September 30, 2011 that were in a loss position have been in a continuous unrealized loss position for less than 12 months. As of September 30, 2011, we had immaterial unrealized losses on two of our U.S. Treasury note investments with aggregate fair values of $10.0 million each. As of September 30, 2011, no other than temporary impairment has been recorded on any of our investments since these unrealized losses are on U.S. government issued securities maturing within one year. The decline in value of the investments as of September 30, 2011 was caused primarily by changes in interest rates. All of the investments as of December 31, 2010 that were in a loss position, have been in a continuous unrealized loss position for less than 12 months. As of December 31, 2010, we have an unrealized loss of $1,000 on one of our U.S. Treasury bill investments with an aggregate fair value of $10.0 million. As of December 31, 2010, no other than temporary impairment has been recorded on any of our investments since these unrealized losses are on U.S. government issued securities maturing within one year. The decline in value of the investments as of December 31, 2010 was caused primarily by changes in interest rates. We do not intend to sell and we do not believe that it is more likely than not that we will be required to sell our investments before recovering the cost of securities, nor do we expect not to recover the entire amortized cost basis of our investments as of September 30, 2011. We have the ability and intent to hold our remaining investments to recover the entire amortized cost basis of the investments as of September 30, 2011.