Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2016

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

3. Fair Value of Financial Instruments

The Company measures certain financial assets at fair value. Fair value is determined based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, as determined by either the principal market or the most advantageous market. Inputs used in the valuation techniques to derive fair values are classified based on a three-level hierarchy, as follows:

· Level 1 — Quoted prices in active markets for identical assets or liabilities.

· Level 2 — Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.

· Level 3 — Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

The following table details the fair value measurements within the fair value hierarchy of the Company’s financial assets and liabilities at March 31, 2016 and December 31, 2015.

	March 31, 2016
	Level 1		Level 2		Level 3		Total
	(in thousands)
Money market funds	$	32,370	$	—	$	—	$	32,370
Commercial paper		—		7,730		—		7,730
Corporate bonds		—		70,017		—		70,017
U.S. government agency obligations		—		11,999		—		11,999
Total	$	32,370	$	89,746	$	—	$	122,116

	December 31, 2015
	Level 1		Level 2		Level 3		Total
	(in thousands)
Money market funds	$	32,014	$	—	$	—	$	32,014
Commercial paper		—		7,711		—		7,711
Corporate bonds		—		70,869		—		70,869
U.S. government agency obligations		—		10,958		—		10,958
Total	$	32,014	$	89,538	$	—	$	121,552

The Company considers all highly liquid investments purchased with a remaining maturity of three months or less to be cash equivalents. The fair value of the Company’s investments in certain money market funds is their face value and such instruments are classified as Level 1 and are included in cash and cash equivalents on the consolidated balance sheets. At March 31, 2016 and December 31, 2015, our Level 2 securities were priced by pricing vendors. These pricing vendors utilize the most recent observable market information in pricing these securities or, if specific prices are not available for these securities, use other observable inputs like market transactions involving identical or comparable securities.

For certain other financial instruments, including accounts receivable, accounts payable, capital leases and other current liabilities, the carrying amounts approximate their fair value due to the relatively short maturity of these balances.

The following tables summarize the composition of our short- and long-term investments at March 31, 2016 and December 31, 2015.

	March 31, 2016
	Amortized Cost		Unrealized Gains		Unrealized Losses			Aggregate Fair Value
	(in thousands)
Commercial paper	$	7,733	$	-	$	(3	)	$	7,730
Corporate bonds		70,071		28		(82	)		70,017
U.S. government agency obligations		11,996		9		(6	)		11,999
Total	$	89,800	$	37	$	(91	)	$	89,746

	December 31, 2015
	Amortized Cost		Unrealized Gains		Unrealized Losses			Aggregate Fair Value
	(in thousands)
Commercial paper	$	7,721	$	—	$	(10	)	$	7,711
Corporate bonds		71,207		—		(338	)		70,869
U.S. government agency obligations		10,998		—		(40	)		10,958
Total	$	89,926	$	—	$	(388	)	$	89,538

For all of our securities for which the amortized cost basis was greater than the fair value at March 31, 2016, the Company has concluded that there is no plan to sell the security nor is it more likely than not that the Company would be required to sell the security before its anticipated recovery. In making the determination as to whether the unrealized loss is other-than-temporary, the Company considered the length of time and extent the investment has been in an unrealized loss position, the financial condition and near-term prospects of the issuers, the issuers’ credit rating and the time to maturity.

Contractual Maturities

The contractual maturities of short-term and long-term investments held at March 31, 2016 and December 31, 2015 are as follows:

	March 31, 2016				December 31, 2015
	Amortized Cost Basis		Aggregate Fair Value		Amortized Cost Basis		Aggregate Fair Value
	( in thousands)				( in thousands)
Due within one year	$	54,666	$	54,633	$	49,068	$	48,972
Due after 1 year through 2 years		35,134		35,113		40,858		40,566
Total	$	89,800	$	89,746	$	89,926	$	89,538