3. Fair Value of Financial Instruments

The fair value of an asset or liability represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Such transactions to sell an asset or transfer a liability are assumed to occur in the principal or most advantageous market for the asset or liability. Accordingly, fair value is determined based on a hypothetical transaction at the measurement date, considered from the perspective of a market participant rather than from a reporting entity’s perspective.

The Company reports assets and liabilities that are measured at fair value using a three level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

Level 1— Inputs are unadjusted quoted prices that the Company has the ability to access at the measurement date for identical assets traded in active markets.

Level 2— Inputs are quoted prices for similar assets and liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability (interest rates, yield curves, etc.). Inputs are derived principally from or corroborated by observable market data or by correlation or other means (market corroborated inputs).

Level 3—Unobservable inputs that reflect the Company’s own assumptions, based on the best information available, including the Company’s own data.

The Company’s financial assets that are required to be measured at fair value on a recurring basis were as follows, in thousands of dollars:


	Fair Value Measurements
	as of December 31, 2018 Using
					Significant
	Total Fair		Quoted Prices		Other		Significant
	Value at		in Active Markets		Observable		Unobservable
	December 31,		for Indentical Assets		Inputs		Inputs
	2018		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash and cash equivalents	$	192,248	$	192,248	$	—	$	—
Marketable securities
Corporate debt securities		163,770		245		163,525		—
Long term marketable securities:
Corporate debt securities		415,650		445		415,205		—
Government debt securities		3,148		—		3,148		—
Other non-current assets:
Marketable securities-restricted (SERP)		326		1		325		—
Total assets at fair value	$	775,142	$	192,939	$	582,203	$	—


	Fair Value Measurements
	as of December 31, 2017 Using
					Significant
	Total Fair		Quoted Prices		Other		Significant
	Value at		in Active Markets		Observable		Unobservable
	December 31,		for Indentical Assets		Inputs		Inputs
	2017		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash and cash equivalents	$	100,304	$	100,304	$	—	$	—
Marketable securities
Corporate debt securities		39,736		2,118		37,618		—
Long term marketable securities:
Corporate debt securities		132,477		448		132,029		—
Government debt securities		1,161		—		1,161		—
Other non-current assets:
Marketable securities-restricted (SERP)		335		—		335		—
Total assets at fair value	$	274,013	$	102,870	$	171,143	$	—

Level 1 assets include cash held at banks, certificates of deposit, money market funds, investment grade corporate and government debt securities.

Level 2 assets include the SERP (Supplemental Executive Retirement Plan) assets, commercial paper and investment grade corporate and government debt securities and other fixed income securities. Level 2 securities are valued using third-party pricing sources that apply applicable inputs and other relevant data in their models to estimate fair value. The fair value of the restricted marketable securities is included within other non-current assets in the consolidated balance sheets.

The carrying value, face value and estimated fair value of the 2023 Notes were approximately $329.5 million, $402.5 million and $375.8 million, respectively, as of December 31, 2018. The fair value was estimated based on actual trade information as well as quoted prices provided by bond traders and are characterized within Level 2 of the fair value hierarchy.

The carrying amounts of other financial instruments, including accounts receivable, accounts payable and accrued expenses approximate fair value due to their short‑term maturities.

Unrestricted marketable securities held by the Company were as follows, in thousands of dollars:

At December 31, 2018:

Gross

Amortized

Unrealized

Available for Sale

Cost

Gains

Losses

Fair Value

Corporate and government debt securities

586,726

(4,213)

582,568

At December 31, 2017:

Gross

Amortized

Unrealized

Available for Sale

Cost

Gains

Losses

Fair Value

Corporate and government debt securities

174,235

(909)

173,374

The contractual maturities of the unrestricted available for sale marketable securities held by the Company were as follows, in thousands of dollars:


	December 31,
	2018
Less Than 1 Year	$	163,770
1 year to 2 years		166,482
2 year to 3 years		163,687
3 years to 4 years		88,629
Greater Than 4 Years		—
Total	$	582,568

The Company has not experienced any other‑than‑temporary losses on its marketable securities.