Fair Value Measurements

6 Months Ended

Jun. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The Company measures its cash equivalents, short-term investments and foreign currency forward contracts at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. The following are the hierarchical levels of inputs to measure fair value:

• Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

• Level 2: Inputs reflect: quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means.

• Level 3: Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available.

The Company’s assets and liabilities that are measured at fair value on a recurring basis, by level, within the fair value hierarchy as of June 30, 2013 and December 31, 2012, are summarized as follows (in thousands):

	June 30, 2013								December 31, 2012
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	113,213	$	—	$	—	$	113,213	$	148,384	$	—	$	—	$	148,384
Commercial paper	—		24,095		—		24,095		—		18,488		—		18,488
Short-term investments:
Commercial paper	—		81,226		—		81,226		—		46,361		—		46,361
Certificates of deposit	—		2,005		—		2,005		—		2,005		—		2,005
U.S. treasury securities	38,156		—		—		38,156		18,197		—		—		18,197
U.S. agency securities	—		336,688		—		336,688		—		303,450		—		303,450
Corporate debt securities	—		143,224		—		143,224		—		107,517		—		107,517
Municipal securities	—		9,429		—		9,429		—		1,611		—		1,611
Other current assets:
Foreign currency forward contracts	—		2,531		—		2,531		—		146		—		146
Total assets	$	151,369	$	599,198	$	—	$	750,567	$	166,581	$	479,578	$	—	$	646,159
Liabilities:
Accrued liabilities:															—
Foreign currency forward contracts	$	—	$	372	$	—	$	372	$	—	$	1,040	$	—	$	1,040
Total liabilities	$	—	$	372	$	—	$	372	$	—	$	1,040	$	—	$	1,040

The fair value of the Company's Level 1 financial instruments, which are traded in active markets, are based on quoted market prices for identical instruments. The fair value of the Company's Level 2 fixed income securities are obtained from an independent pricing service, which may use quoted market prices for identical or comparable instruments or model driven valuations using observable market data or inputs corroborated by observable market data. The Company's procedures include controls to ensure that appropriate fair values are recorded, including comparing the fair values obtained from the Company's pricing service against fair values obtained from another independent source. The Company's derivative instruments are valued using pricing models that use observable market inputs and, therefore, are classified as Level 2.

As of June 30, 2013 and December 31, 2012, the Company had outstanding foreign currency forward contracts with a total notional amount of $117.3 million and $83.5 million, respectively.