(6) 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 represents a Level 2 measurement. When determining the estimated fair value of the Company’s long-term debt, the Company used market-based risk measurements, such as credit risk. See Note 8 and Note 10 for further detail on the Company’s long-term debt.

The following table presents the Company’s fair value measurements as of September 30, 2018 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, 2018 Using:
			Quoted Prices		Significant
			in Active		Other		Significant
			Markets for		Observable		Unobservable
	Fair Value at		Identical Assets		Inputs		Inputs
(In thousands)	September 30, 2018		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents
Cash and money market	$	92,318	$	92,318	$	—	$	—
U.S. government agency securities		63,694		—		63,694		—
Commercial paper		5,693		—		5,693		—
Available-for-sale
Marketable securities
Corporate bonds		415,459		—		415,459		—
Asset backed securities		287,742		—		287,742		—
U.S. government agency securities		265,131		—		265,131		—
Certificates of deposit		43,104		—		43,104		—
Commercial paper		12,076		—		12,076		—
Total	$	1,185,217	$	92,318	$	1,092,899	$	—

The following table presents the Company’s fair value measurements as of December 31, 2017 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, 2017 Using:
			Quoted Prices		Significant
			in Active		Other		Significant
			Markets for		Observable		Unobservable
	Fair Value at		Identical Assets		Inputs		Inputs
(In thousands)	December 31, 2017		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents
Cash and money market	$	61,297	$	61,297	$	—	$	—
Commercial paper		10,995		—		10,995		—
Certificates of deposit		1,499		—		1,499		—
U.S. government agency securities		3,700		—		3,700		—
Available-for-sale
Marketable securities
Corporate bonds		181,305		—		181,305		—
Asset backed securities		94,515		—		94,515		—
U.S. government agency securities		54,812		—		54,812		—
Commercial paper		9,946		—		9,946		—
Certificates of deposit		6,646		—		6,646		—
Total	$	424,715	$	61,297	$	363,418	$	—

The Company monitors investments for other-than-temporary impairment. It was determined that unrealized gains and losses as of September 30, 2018 and December 31, 2017 are temporary in nature because the change in market value for those securities has resulted from fluctuating interest rates rather than a deterioration of the credit worthiness of the issuers. So long as the Company holds these securities to maturity, it is unlikely to experience gains or losses. In the event that the Company disposes of these securities before maturity, it is expected that realized gains or losses, if any, will be immaterial.

The following table summarizes gross unrealized losses and fair values of our investments in an unrealized loss position as of September 30, 2018, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:


		September 30, 2018
		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	$	258,664	$	(382)	$	24,871	$	(91)	$	283,535	$	(473)
U.S. government agency securities		250,157		(410)		14,975		(21)		265,132		(431)
Asset backed securities		246,362		(472)		22,004		(76)		268,366		(548)
Certificates of deposit		28,446		(22)		—				28,446		(22)
Commercial paper		12,076		(5)		—				12,076		(5)
Total	$	795,705	$	(1,291)	$	61,850	$	(188)	$	857,555	$	(1,479)

The following summarizes contractual underlying maturities of the Company’s available-for-sale investments in debt securities at September 30, 2018:


		Due one year or less			Due after one year through four years
(In thousands)		Cost		Fair Value		Cost		Fair Value
Marketable securities
Corporate bonds	$	318,313	$	317,926	$	97,515	$	97,533
U.S. government agency securities		186,406		186,135		79,157		78,996
Asset backed securities		65,931		65,792		222,355		221,950
Certificates of deposit		39,216		39,197		3,895		3,907
Commercial paper		12,081		12,076		—		—
Total	$	621,947	$	621,126	$	402,922	$	402,386