Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2014

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

5. Fair Value of Financial Instruments

The Company evaluates assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level to classify them for each reporting period. There have been no transfers between fair value measurement levels during the three months ended March 31, 2014.

The Company’s cash equivalents and short-term investment instruments are classified within Level 1 or Level 2 of the fair value hierarchy because they are valued using quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency. The types of instruments valued based on quoted market prices in active markets include mutual funds and money market securities, and are generally classified within Level 1 of the fair value hierarchy. The types of instruments valued based on quoted prices in less active markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability include U.S. agency securities, investment-grade corporate bonds, bank deposits, and commercial paper. Such instruments are generally classified within Level 2 of the fair value hierarchy.

The Company executes its foreign currency contracts primarily in the retail market in an over-the-counter environment with a relatively high level of price transparency. The market participants usually are large multi-national and regional banks. The Company’s foreign currency contracts valuation inputs are based on quoted prices and quoted pricing intervals from public data sources and do not involve management judgment. These contracts are typically classified within Level 2 of the fair value hierarchy.

The following table sets forth the Company’s assets and liabilities that were measured at fair value as of March 31, 2014 and December 31, 2013, by level within the fair value hierarchy (in thousands):

	As of March 31, 2014
	Level I		Level II		Level III		Fair Value
Financial Assets:
Cash and cash equivalents:
Commercial paper	$	—	$	20,599	$	—	$	20,599
Bank deposits		—		10,180		—		10,180
Money market funds		7,373		—		—		7,373
Short-term investments:
Commercial paper		—		1,005		—		1,005
Corporate debt obligations		—		23,918		—		23,918
Bank deposits		—		10,244		—		10,244
Total financial assets	$	7,373	$	65,946	$	—	$	73,319

	As of December 31, 2013
	Level I		Level II		Level III		Fair Value
Financial Assets:
Cash and cash equivalents:
Bank deposits	$	—	$	10,165	$	—	$	10,165
Commercial paper		—		21,947		—		21,947
Money market funds		2,619		—		—		2,619
Short-term investments:
Corporate debt obligations		—		28,228		—		28,228
Bank deposits		—		10,153		—		10,153
Total financial assets	$	2,619	$	70,493	$	—	$	73,112

In addition to the amounts disclosed in the above table, the fair value of the Company’s Israeli severance pay assets, which were comprised of Level II assets, was $4.4 million and $4.1 million as of March 31, 2014 and December 31, 2013, respectively.