5. Cash and Cash Equivalents, Short-Term Investments and Restricted Investments

The carrying amounts of certain of the Company’s financial instruments, including cash and cash equivalents and short-term investments, are stated at fair value. The Company accounts for the fair value of its financial instruments in accordance with the provisions of the Fair Value Measurement topic of the Codification.

Fair value is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The Company applies the market approach valuation technique for fair value measurements on a recurring basis and attempts to maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. All of the Company’s cash equivalents and short-term investments are measured using inputs classified at Level 1 or Level 2 within the fair value hierarchy. Level 1 inputs are quoted prices in active markets for identical assets. Level 2 inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets. Level 3 inputs are unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs obtained from various third-party data providers, including but not limited to, benchmark yields, interest rate curves, reported trades, broker/dealer quotes and market reference data.

The following are summaries of cash and cash equivalents, short-term investments and restricted investments (in thousands):


	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
As of March 31, 2013:
Cash	$	1,943	$	—	$	—		$	1,943
Money market funds		9,612		—		—			9,612
U.S. treasury securities		4,000		—		—			4,000
U.S. government-sponsored agencies		4,397		1		—			4,398
Corporate debt securities		95,171		19		(17	)		95,173
Certificates of deposit		1,955		—		—			1,955

	$	117,078	$	20	$	(17	)	$	117,081

Reported as:
Cash and cash equivalents								$	21,011
Short-term investments									94,115
Restricted investments									1,955

								$	117,081

As of December 31, 2012:
Cash	$	915	$	—	$	—		$	915
Money market funds		20,897		—		—			20,897
U.S. government-sponsored agencies		11,329		1		—			11,330
Corporate debt securities		105,839		32		(11	)		105,860
Certificates of deposit		1,955		—		—			1,955

	$	140,935	$	33	$	(11	)	$	140,957

Reported as:
Cash and cash equivalents								$	36,134
Short-term investments									102,868
Restricted investments									1,955

								$	140,957

At March 31, 2013 and December 31, 2012, the contractual maturities of all investments held were less than one year. All investments have been designated as available-for-sale and changes to unrealized gains and losses are reflected as the only component of accumulated other comprehensive income. The Company views its available-for-sale portfolio as available for use in current operations. Accordingly, the Company has classified all investments as short-term, even though the stated maturity may be one year or more beyond the current balance sheet date.

No gross realized gains or losses were recognized and accordingly there were no amounts reclassified out of accumulated other comprehensive income to earnings in the three months ended March 31, 2013 and 2012.

The Company’s available-for-sale investments, which include cash equivalents and short-term investments, are measured at fair value on a recurring basis and are classified at the following fair value hierarchy (in thousands):


			Fair Value Measurements at Reporting Date Using
Description	Total As of March 31, 2013		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Money market funds	$	9,612	$	9,612	$	—	$	—
U.S. treasury securities		4,000		—		4,000		—
U.S. government-sponsored agencies		4,398		—		4,398		—
Corporate debt securities		95,173		—		95,173		—

Total	$	113,183	$	9,612	$	103,571	$	—


			Fair Value Measurements at Reporting Date Using
Description	Total As of December, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Money market funds	$	20,897	$	20,897	$	—	$	—
U.S. government-sponsored agencies		11,330		—		11,330		—
Corporate debt securities		105,860		—		105,860		—

Total	$	138,087	$	20,897	$	117,190	$	—