Fair Value Measurements

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurements

2. Fair Value Measurements

The carrying amounts of cash equivalents, prepaid and other assets, accounts payable and accrued liabilities are considered to be representative of their respective fair values because of the short-term nature of those instruments. Based on the borrowing rates currently available to us for loans with similar terms, which is considered a Level 2 input, we believe that the fair value of our commercial bank debt approximate their carrying values. Investment securities are recorded at fair value.

The accounting guidance defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1: Observable inputs such as quoted prices in active markets.

Level 2: Inputs, other than the quoted prices in active markets that are observable either directly or indirectly.

Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

Financial assets measured at fair value on a recurring basis consist of investment securities. Investment securities are recorded at fair value, defined as the exit price in the principal market in which we would transact, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Level 2 securities are valued using quoted market prices for similar instruments, non-binding market prices that are corroborated by observable market data, or discounted cash flow techniques and include our investments in corporate debt securities and commercial paper. We have no financial liabilities measured at fair value on a recurring basis. None of our non-financial assets and liabilities is recorded at fair value on a non-recurring basis. No transfers between levels have occurred during the periods presented.

Assets and liabilities measured at fair value on a recurring basis are as follows (in thousands):

			Fair Value Measurements Using
			Quoted Pricesin Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
As of June 30, 2016:
Assets:
Current:
Cash equivalents	$	38,256	$	38,256	$	—	$	—
Available-for-sale investments, short-term:
Commercial paper		11,947		—		11,947		—
United States Treasury securities		5,012		5,012		—		—
Corporate debt securities		23,776		—		23,776		—
Sub-total available-for-sale investments, short-term		40,735		5,012		35,723		—
Available-for-sale investments, long-term:
Asset-backed securities		7,011		—		7,011		—
Corporate debt securities		5,644		—		5,644		—
Sub-total available-for-sale investments, long-term		12,655		—		12,655		—
Total assets measured at fair value	$	91,646	$	43,268	$	48,378	$	—
As of December 31, 2015:
Assets:
Current:
Cash equivalents	$	46,545	$	46,545	$	—	$	—
Available-for-sale investments, short-term:
Commercial paper		2,996		—		2,996		—
Corporate debt securities		39,514		—		39,514		—
Sub-total available-for-sale investments, short-term		42,510		—		42,510		—
Available-for-sale investments, long-term:
United States Treasury securities		1,999		1,999		—		—
Asset-backed securities		10,912		—		10,912		—
Corporate debt securities		16,903		—		16,903		—
Sub-total available-for-sale investments, long-term		29,814		1,999		27,815		—
Total assets measured at fair value	$	118,869	$	48,544	$	70,325	$	—

As of June 30, 2016 and December 31, 2015 available-for-sale investments are detailed as follows (in thousands):

	June 30, 2016
	Gross Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Market Value
Available-for-sale investments, short-term:
Commercial paper	$	11,947	$	—	$	—		$	11,947
United States Treasury securities		5,005		7		—			5,012
Corporate debt securities		23,768		11		(3	)		23,776
	$	40,720	$	18	$	(3	)	$	40,735
Available-for-sale investments, long-term
Asset-backed securities		7,007		4		—			7,011
Corporate debt securities		5,644		1		(1	)		5,644
	$	12,651	$	5	$	(1	)	$	12,655

	December 31, 2015
	Gross Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Market Value
Available-for-sale investments, short-term:
Commercial paper	$	2,996	$	—	$	—		$	2,996
Corporate debt securities		39,575		—		(61	)		39,514
	$	42,571	$	—	$	(61	)	$	42,510
Available-for-sale investments, short-term
United States Treasury securities	$	2,006	$	—	$	(7	)	$	1,999
Asset-backed securities		10,928		—		(16	)		10,912
Corporate debt securities		16,990		—		(87	)		16,903
	$	29,924	$	—	$	(110	)	$	29,814

Available-for-sale investments that are in an unrealized loss position as of June 30, 2016 are as follows (in thousands):

	EstimatedFair Value		Gross Unrealized Losses
Corporate debt securities	$	7,930	$	(4	)

As of June 30, 2016, our available-for-sale investments have a variety of effective maturity dates of up to 15 months. As of June 30, 2016, there are 5 available-for-sale investments in gross unrealized loss position, all of which had been in such position for less than twelve months.

At each reporting date, we perform an evaluation of impairment to determine if the unrealized losses are other-than-temporary. Factors considered in determining whether a loss is other-than-temporary include the length of time and extent to which fair value has been less than the cost basis, the financial condition of the issuer, and our intent and ability to hold the investment until recovery of its amortized cost basis. We intend, and have the ability, to hold our investments in unrealized loss positions until their amortized cost basis has been recovered. Based on our evaluation, we determined that the unrealized losses were not other-than-temporary at June 30, 2016.