Financial Instruments

12 Months Ended

Jun. 30, 2013

Financial Instruments

Financial Instruments

4. Financial Instruments

        The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy contains three levels of inputs that may be used to measure fair value, as follows:

•         Level 1— Unadjusted quoted prices that are available in active markets for the identical assets or liabilities at the measurement date.

          Level 2— Other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly, including:

  • •

    Quoted prices for similar assets or liabilities in active markets;

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    Quoted prices for identical or similar assets in non-active markets;

  • •

    Inputs other than quoted prices that are observable for the asset or liability; and

    •

    Inputs that are derived principally from or corroborated by other observable market data.

•         Level 3— Unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management's estimates of market participant assumptions.

        The following tables summarize the fair value of financial instruments measured on a recurring basis as of June 30, 2013 and June 30, 2012 (in thousands):

	Fair value measurement using
Type of instrument and line item in consolidated balance sheets	Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value
Assets at June 30, 2013
Certificates of deposit—included in cash and cash equivalents and investments(1)	$	15,365	$	—	$	—	$	15,365
Money market funds—included in cash and cash equivalents		473		—		—		473
Commercial paper—included in investments		—		3,992		—		3,992
Corporate notes—included in investments		—		94,485		—		94,485
Total assets measured and recorded at fair value	$	15,838	$	98,477	$	—	$	114,315
Assets at June 30, 2012
Money market funds—included in cash and cash equivalents	$	40,068	$	—	$	—	$	40,068
Certificates of deposit—included in cash and cash equivalents		6,742		—		—		6,742
Total assets measured and recorded at fair value	$	46,810	$	—	$	—	$	46,810

(1)

Includes $2.6 million of certificates of deposit, which were included in investments in the consolidated balance sheet at June 30, 2013.

        The following tables summarize the fair value of financial instruments that are not measured on a recurring basis as of June 30, 2013 and June 30, 2012 (in thousands):

	Fair value measurement using
Type of instrument and line item in consolidated balance sheets	Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value
At June 30, 2013
3.75% Convertible Notes—included in long term debt	$	—	$	96,560	$	—	$	96,560
3.50% Convertible Notes—included in long term debt		—		144,302		—		144,302
Total liabilities measured on a non-recurring basis	$	—	$	240,862	$	—	$	240,862
At June 30, 2012
3.75% Convertible Notes—included in long term debt	$	—	$	101,400	$	—	$	101,400
Total liabilities measured on a non-recurring basis	$	—	$	101,400	$	—	$	101,400

        The Company's Level 2 investments in the table above are classified as Level 2 items because quoted prices in an active market are not readily accessible for those specific financial assets, or the Company may have relied on alternative pricing methods that do not rely exclusively on quoted prices to determine the fair value of the investments.

        Long-term debt is measured on a non-recurring basis using Level 2 inputs based upon observable inputs of the Company's underlying stock price and the time value of the conversion option, since observable quoted prices of the 3.75% Convertible Notes and the 3.50% Convertible Notes are not readily available.