Fair Value Disclosure

12 Months Ended

Jun. 30, 2016

The financial assets of the Company measured at fair value on a recurring basis are included in cash equivalents and long-term investments. The Company’s money market funds are classified within Level 1 of the fair value hierarchy as the determination of their fair values is based on quoted market prices for the identical underlying securities in active markets. The Company’s long-term auction rate securities investments are classified within Level 3 of the fair value hierarchy as the determination of their fair values was not based on observable inputs as of June 30, 2016 and 2015. Refer to Note 1 for a discussion of the Company’s policies regarding the fair value hierarchy. The Company has used a discounted cash flow model to estimate the fair value of the auction rate securities as of June 30, 2016 and 2015. The material factors used in preparing the discounted cash flow model are (i) the discount rate utilized to present value the cash flows, (ii) the time period until redemption and (iii) the estimated rate of return.

The following table sets forth the Company’s cash equivalents and long-term investments as of June 30, 2016 and 2015 which are measured at fair value on a recurring basis by level within the fair value hierarchy. These are classified based on the lowest level of input that is significant to the fair value measurement (in thousands):



June 30, 2016	Level 1		Level 2		Level 3		Asset at Fair Value
Money market funds	$	315	$	—	$	—	$	315
Auction rate securities	—		—		2,643		2,643
Total assets measured at fair value	$	315	$	—	$	2,643	$	2,958

June 30, 2015	Level 1		Level 2		Level 3		Asset at Fair Value
Money market funds	$	310	$	—	$	—	$	310
Auction rate securities	—		—		2,633		2,633
Total assets measured at fair value	$	310	$	—	$	2,633	$	2,943

The above table excludes $180,426,000 and $94,901,000 of cash and $2,133,000 and $1,130,000 of certificates of deposit held by the Company as of June 30, 2016 and 2015, respectively. There were no transfers between Level 1, Level 2 or Level 3 securities in fiscal year 2016 and 2015.

The following table provides a reconciliation of the Company’s financial assets measured at fair value on a recurring basis, consisting of long-term auction rate securities, using significant unobservable inputs (Level 3) for fiscal years 2016 and 2015 (in thousands):



	Years Ended June 30,
	2016		2015
Balance as of beginning of year	$	2,633	$	2,647
Total realized gains or (losses) included in net income	—		—
Total unrealized gains or (losses) included in other comprehensive income	10		(14		)
Sales and settlements at par	—		—
Transfers in and/or out of Level 3	—		—
Balance as of end of year	$	2,643	$	2,633

The following is a summary of the Company’s long-term investments as of June 30, 2016 and 2015 (in thousands):



	June 30, 2016
	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Fair Value
Auction rate securities	$	2,750	$	—	$	(107	)	$	2,643

	June 30, 2015
	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Fair Value
Auction rate securities	$	2,750	$	—	$	(117	)	$	2,633

The Company measures the fair value of outstanding debt for disclosure purposes on a recurring basis. As of June 30, 2016 and 2015, short-term and long-term debt of $93,589,000 and $94,412,000, respectively, are reported at amortized cost. This outstanding debt is classified as Level 2 as it is not actively traded and is valued using a discounted cash flow model that uses observable market inputs. Based on the discounted cash flow model, the fair value of the outstanding debt approximates amortized cost.

- 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.

+ References + Details