(5) FAIR VALUE MEASUREMENTS

The Financial Accounting Standards Board has issued authoritative guidance which requires that fair value should be based on the assumptions market participants would use when pricing an asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. Under the standard, fair value measurements are separately disclosed by level within the fair value hierarchy. The fair value hierarchy establishes and prioritizes the inputs used to measure fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs. Observable inputs are inputs that reflect the assumptions that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

The three levels of the fair value hierarchy established are as follows:


Level 1		Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2		Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3		Unobservable inputs that reflect the Company’s assumptions about the assumptions that market participants would use in pricing the asset or liability. Unobservable inputs shall be used to measure fair value to the extent that observable inputs are not available.

Fixed-income securities and mutual funds are valued using a third-party pricing agency. The valuation is based on observable inputs including pricing for similar assets and other observable market factors. There has been no material change from period to period. The estimated fair value of the Company’s long-term debt based on a market approach was approximately $4.5 million and $4.6 million as of September 30, 2017 and December 31, 2016, respectively, and represent Level 2 measurements. When determining the estimated fair value of the Company’s long-term debt, the Company used market-based risk measurements, such as credit risk.

The following table presents the Company’s fair value measurements as of September 30, 2017 along with the level within the fair value hierarchy in which the fair value measurements in their entirety fall.


			Fair Value Measurement at September 30, 2017 Using:
			Quoted Prices		Significant
			in Active		Other		Significant
			Markets for		Observable		Unobservable
	Fair Value at		Identical Assets		Inputs		Inputs
(In thousands)	September 30, 2017		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents
Cash and money market	$	30,837	$	30,837	$	—	$	—
U.S. government agency securities		20,000		—		20,000		—
Available-for-sale
Marketable securities
Corporate bonds		213,005		—		213,005		—
Asset backed securities		101,113		—		101,113		—
U.S. government agency securities		64,869		—		64,869		—
Commercial paper		20,895		—		20,895		—
Certificates of deposit		11,802		—		11,802		—
Total	$	462,521	$	30,837	$	431,684	$	—

The following table presents the Company’s fair value measurements as of December 31, 2016 along with the level within the fair value hierarchy in which the fair value measurements in their entirety fall.


			Fair Value Measurement at December 31, 2016 Using:
			Quoted Prices		Significant
			in Active		Other		Significant
			Markets for		Observable		Unobservable
	Fair Value at		Identical Assets		Inputs		Inputs
(In thousands)	December 31, 2016		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents
Cash and money market	$	48,921	$	48,921	$	—	$	—
Available-for-sale
Marketable securities
Corporate bonds		136,937		—		136,937		—
Asset backed securities		55,640		—		55,640		—
U.S. government agency securities		49,474		—		49,474		—
Commercial paper		19,076		—		19,076		—
Certificates of deposit		1,052		—		1,052		—
Total	$	311,100	$	48,921	$	262,179	$	—

The following table summarizes gross unrealized losses and fair values of our investments in an unrealized loss position as of September 30, 2017, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:


		September 30, 2017
		Less than 12 months			12 months or greater				Total
(In thousands)		Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss
Marketable securities
Corporate bonds	$	131,782	$	(70)	$	14,717	$	(10)	$	146,499	$	(80)
Asset backed securities		93,585		(56)		—		—		93,585		(56)
Commercial paper		5,458		(1)		—		—		5,458		(1)
U.S. government agency securities		64,869		(103)		—		—		64,869		(103)
Total	$	295,694	$	(230)	$	14,717	$	(10)	$	310,411	$	(240)

The following summarizes contractual underlying maturities of the Company’s available-for-sale investments in debt securities at September 30, 2017:


		Due one year or less			Due after one year through four years
(In thousands)		Cost		Fair Value		Cost		Fair Value
Marketable securities
Corporate bonds	$	138,989	$	138,964	$	74,069	$	74,041
U.S. government agency securities		50,016		49,928		14,956		14,941
Commercial paper		20,894		20,895		—		—
Certificates of deposit		9,801		9,802		1,999		2,000
Asset backed securities		17,617		17,612		83,550		83,501
Total	$	237,317	$	237,201	$	174,574	$	174,483