Fair Value

9 Months Ended

Sep. 30, 2011

Fair Value

Fair Value

7.              Fair Value

Fair value is defined as the price at which an asset could be exchanged or a liability transferred (an exit price) in an orderly transaction between knowledgeable, willing parties in the principal or most advantageous market for the asset or liability. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied.

Financial assets recorded at fair value in the accompanying financial statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. The levels are directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities, and are as follows:

Level 1	Inputs are unadjusted, quoted prices in active markets for identical assets at the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.
	The fair valued assets we hold that are generally included in this category are money market securities where fair value is based on publicly quoted prices.
Level 2	Inputs are other than quoted prices included in Level 1, which are either directly or indirectly observable for the asset or liability through correlation with market data at the reporting date and for the duration of the instrument’s anticipated life.
	The fair valued assets we hold that are generally included in this category are investment grade short-term securities.
Level 3	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities and which reflect management’s best estimate of what market participants would use in pricing the asset or liability at the reporting date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

When quoted prices in active markets for identical assets are available, we use these quoted market prices to determine the fair value of financial assets and classify these assets as Level 1. In other cases where a quoted market price for identical assets in an active market is either not available or not observable, we obtain the fair value from a third party vendor that uses pricing models, such as matrix pricing, to determine fair value. These financial assets would then be classified as Level 2. In the event quoted market prices were not available, we would determine fair value using broker quotes or an internal analysis of each investment’s financial statements and cash flow projections. In these instances, financial assets would be classified based upon the lowest level of input that is significant to the valuation. Thus, financial assets might be classified in Level 3 even though there could be some significant inputs that may be readily available. To date, we have never had any assets that were required to be classified as Level 3.

Assets and liabilities measured at fair value on a recurring basis are summarized below as of September 30, 2011 and December 31, 2010:

	September 30, 2011
	($000s)
	Level I		Level II		Level III		Total
Assets
Cash equivalents	$	306	$	—	$	—	$	306
Government obligations	1,206		—		—		1,206
Certificates of deposit	—		500		—		500
Agency obligations	—		32,405		—		32,405
Corporate debt securities & commercial paper	—		10,358		—		10,358
Municipal securities	—		5,279		—		5,279
Foreign government obligations	—		400		—		400
Investments available for sale	$	1,512	$	48,942	$	—	$	50,454

	December 31, 2010
	($000s)
	Level I		Level II		Level III		Total
Assets
Cash equivalents	$	9,449	$	—	$	—	$	9,449
Government obligations	1,201		—		—		1,201
Certificates of deposit	—		851		—		851
Agency obligations	—		27,545		—		27,545
Corporate debt securities & commercial paper	—		26,201		—		26,201
Foreign bonds	—		919		—		919
Investments available for sale	$	10,650	$	55,516	$	—	$	66,166