Fair Value Measurements

9 Months Ended

Sep. 30, 2013

Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract]

Fair Value Measurements

Fair Value Measurements

Assets and liabilities recorded at fair value in the condensed consolidated financial statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels which are directly related to the amount of subjectivity associated with the inputs to the valuation of these assets or liabilities are as follows:

Level 1 - Inputs that are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2 - Inputs (other than quoted prices included in Level 1) that are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument's anticipated life.

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities and which reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date.

For Level 2 financial instruments, the Company's investment adviser provides monthly account statements documenting the value of corporate bonds and U.S. Treasury obligations based on prices received from an independent third-party valuation service provider. This third party evaluates the types of securities in the Company's investment portfolio and calculates a fair value using a multi-dimensional pricing model that includes a variety of inputs, including quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, interest rates and yield curves observable at commonly quoted intervals, volatilities, prepayment speeds, loss severities, credit risks and default rates that are observable at commonly quoted intervals. As the Company is ultimately responsible for the determination of the fair value of these instruments, it performs quarterly analyses using prices obtained from another independent provider of financial instrument valuations, to validate that the prices the Company has used are reasonable estimates of fair value.

The following table presents the financial instruments that were measured at fair value on a recurring basis at September 30, 2013 by level within the fair value hierarchy (in thousands):

	September 30, 2013
	Level 1		Level 2		Level 3		Total
Money market funds	$	21,079	$	—	$	—	$	21,079
Corporate bonds	—		1,007		—		1,007
U.S. Treasury obligations	—		2,002		—		2,002
Common shares of CO2 Solutions	—		1,067		—		1,067
Total	$	21,079	$	4,076	$	—	$	25,155

The following table presents the financial instruments that were measured at fair value on a recurring basis at December 31, 2012 by level within the fair value hierarchy (in thousands):

	December 31, 2012
	Level 1		Level 2		Level 3		Total
Money market funds	$	24,789	$	—	$	—	$	24,789
Commercial paper	—		1,500		—		1,500
Corporate bonds	—		9,522		—		9,522
U.S. Treasury obligations	—		5,515		—		5,515
Common shares of CO2 Solutions	610		—		—		610
Total	$	25,399	$	16,537	$	—	$	41,936

Cash balances at financial institutions of $5.8 million and $7.2 million as of September 30, 2013 and December 31, 2012, respectively, are not included in the above tables as they are not considered financial instruments. The Company estimated the fair value of its investment in 10,000,000 common shares of CO₂ Solutions using the market value of common shares as determined based upon quoted prices on the TSX Venture Exchange. There were no other-than-temporary impairments noted as of September 30, 2013.