FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2017

Fair value hierarchy:

The Company measures its cash equivalents and marketable securities at fair value. The Company’s cash equivalents are classified within Level 1. Cash equivalents are valued primarily using quoted market prices utilizing market observable inputs. The Company's investments in debt securities and certificates of deposits are classified within Level 2 as the market inputs to value these instruments consist of market yields, reported trades and broker/dealer quotes. In addition, foreign currency contracts are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments. The Level 3 valuation inputs include the Company's best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instrument's valuation. As of September 30, 2017 and December 31, 2016, the Company did not have any assets or liabilities valued based on Level 3 valuations.

Financial Liabilities Measured at Fair Value on a Nonrecurring Basis:

As of September 30, 2017, the remaining principal of $200.0 million on the Company's $280.0 million Term Debt is classified as a Level 2 fair value measurement in the fair value hierarchy. The Company calculated a fair value amount of $202.3 million at September 30, 2017 based on a discounted cash flow model using observable market inputs and taking into consideration variables such as interest rate changes, comparable instruments, and long-term credit ratings.

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis:

The following table represents the fair value hierarchy of the Company's financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2017:



	Level 1		Level 2		Total
	(in thousands)
Money market funds	$	4,777	$	—	$	4,777
Certificates of deposit	—		77,137		77,137
U.S. Government and agency securities	—		45,113		45,113
Commercial paper	—		36,976		36,976
Corporate bonds	—		94,029		94,029
Municipal bonds	—		15,697		15,697
Foreign government bonds	—		18,791		18,791
	4,777		287,743		292,520
Derivative contracts	—		1,384		1,384
Total financial assets	$	4,777	$	289,127	$	293,904
Derivative contracts	—		80		80
Total financial liabilities	$	—	$	80	$	80

The following table represents the fair value hierarchy of the Company's financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2016:



	Level 1		Level 2		Total
	(in thousands)
Money market funds	$	1,833	$	—	$	1,833
Certificates of deposit	—		78,643		78,643
U.S. Government and agency securities	—		56,347		56,347
Commercial paper	—		29,483		29,483
Corporate bonds	—		94,162		94,162
Municipal bonds	—		7,706		7,706
Foreign government bonds	—		5,320		5,320
	1,833		271,661		273,494
Derivative contracts	—		257		257
Total financial assets	$	1,833	$	271,918	$	273,751
Derivative contracts	—		1,006		1,006
Total financial liabilities	$	—	$	1,006	$	1,006

There were no transfers between Level 1 and Level 2 securities during the nine months ended September 30, 2017 and the year ended December 31, 2016.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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