Fair Value Measurements

12 Months Ended

Dec. 31, 2012

Fair Value Measurements [Abstract]

Fair Value Measurements

4. Fair Value Measurements

The following table summarizes the valuation of the Company’s assets and liabilities measured at fair value as categorized based on the hierarchy described in Note 2.

	Level 1		Level 2		Level 3		Total
	(In thousands)
As of December 31, 2012
Money market funds	$	83,519	$	—	$	—	$	83,519
Securities available-for-sale
U.S. government obligations		—		31,104		—		31,104
Municipal securities		—		17,947		—		17,947
Corporate bonds		—		2,157		—		2,157
Foreign currency forward and option contracts		—		15		—		15
	$	83,519	$	51,223	$	—	$	134,742
As of December 31, 2011
Money market funds	$	111,256	$	—	$	—	$	111,256
Securities available-for-sale
U.S. government obligations		—		55,460		—		55,460
Municipal securities		—		20,612		—		20,612
Corporate bonds		—		2,038		—		2,038
Foreign currency forward contract		—		155		—		155
	$	111,256	$	78,265	$	—	$	189,521

Securities classified within Level 2 were valued using a market approach utilizing prices and other relevant information generated by market transactions involving comparable assets. The foreign currency forward and options contracts are classified within Level 2 as the valuation inputs are based on quoted market prices. There were no financial assets classified within Level 3 during 2012 and 2011.

The Company enters into foreign currency forward contracts to hedge the exposure to variability in foreign currency cash flows resulting from the net investment in the Company’s U.K. subsidiary. The Company assesses each foreign currency forward contract to ensure that it is highly effective at reducing the exposure being hedged. The Company designates each foreign currency forward contract as a hedge, assesses the risk management objective and strategy, including identification of the hedging instrument, the hedged item and the risk exposure and how effectiveness is to be assessed prospectively and retrospectively. These hedges are for a one-month period and are used to limit exposure to foreign currency exchange rate fluctuations. Gains or losses on foreign currency forward contracts designated as hedges are included in accumulated other comprehensive loss in the Consolidated Statements of Financial Condition. The gross and net fair value liability as of December 31, 2012 is included in accounts payable and the gross and net fair value asset as of December 31, 2011 is included in accounts receivable, in the Consolidated Statements of Financial Condition.

A summary of the foreign currency forward contracts is as follows:

	As of December 31,
	2012			2011
	(In thousands)
Notional value	$	15,792		$	28,671
Fair value of notional		15,809			28,516
Gross and net fair value (liability) asset	$	(17	)	$	155

In October 2012, the Company purchased a foreign exchange call option to economically hedge the £26.0 million purchase price of Xtrakter Limited (“Xtrakter”) (See Note 16, “Acquisition”). As of December 31, 2012, the fair value of the call option was $32,000. A mark-to-market loss of $0.3 million was included in general and administrative expense in the Consolidated Statement of Operations for the year ended December 31, 2012.

The following is a summary of the Company’s securities available-for-sale:

			Gross		Gross			Estimated
	Amortized		unrealized		unrealized			fair
	cost		gains		losses			value
	(In thousands)
As of December 31, 2012
U.S. government obligations	$	30,255	$	849	$	—		$	31,104
Municipal securities		17,941		10		(4	)		17,947
Corporate bonds		2,159		—		(2	)		2,157
Total securities available-for-sale	$	50,355	$	859	$	(6	)	$	51,208
As of December 31, 2011
U.S. government obligations	$	53,832	$	1,628	$	—		$	55,460
Municipal securities		20,613		7		(8	)		20,612
Corporate bonds		2,028		10		—			2,038
Total securities available-for-sale	$	76,473	$	1,645	$	(8	)	$	78,110

The following table summarizes the contractual maturities of securities available-for-sale:

	As of December 31,
	2012		2011
	(In thousands)
Less than one year	$	10,870	$	31,554
Due in 1—5 years		40,338		46,556
Total securities available-for-sale	$	51,208	$	78,110

Proceeds from the sales and maturities of securities available-for-sale during 2012, 2011 and 2010 were $42.0 million, $27.4 million and $65.4 million, respectively.

The following table provides fair values and unrealized losses on securities available-for-sale and by the aging of the securities’ continuous unrealized loss position:

	Less than Twelve Months					Twelve Months or More				Total
	Estimated		Gross			Estimated		Gross		Estimated		Gross
	fair		unrealized			fair		unrealized		fair		unrealized
	value		losses			value		losses		value		losses
						(In thousands)
As of December 31, 2012
U.S. government obligations	$	—	$	—		$	—	$	—	$	—	$	—
Municipal securities		2,780		(4	)		—		—		2,780		(4	)
Corporate bonds		2,157		(2	)		—		—		2,157		(2	)
Total	$	4,937	$	(6	)	$	—	$	—	$	4,937	$	(6	)
As of December 31, 2011
U.S. government obligations	$	—	$	—		$	—	$	—	$	—	$	—
Municipal securities		9,529		(8	)		—		—		9,529		(8	)
Corporate bonds		—		—			—		—		—		—
Total	$	9,529	$	(8	)	$	—	$	—	$	9,529	$	(8	)