FAIR VALUE

The Company follows the authoritative guidance for fair value measurement and the fair value option for financial assets and financial liabilities. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability, or an exit price, in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The established fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:



Level 1		Quoted prices in active markets for identical assets.
Level 2		Observable market-based inputs or unobservable inputs that are corroborated by market data.
Level 3		Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

When applying fair value principles in the valuation of assets, we are required to maximize the use of quoted market prices and minimize the use of unobservable inputs. We use the fair value of our Level 1 and calculate Level 2 instruments based on the exchange traded price of similar or identical instruments, where available, or based on other observable inputs. There were no significant transfers into or out of Level 1 or Level 2 that occurred between December 31, 2016 and March 31, 2017.

The following is a list of the Company’s assets required to be measured at fair value on a recurring basis and where they were classified within the hierarchy as of March 31, 2017 (in thousands):



	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Marketable securities
Money market funds (1)	$	2,121	$	2,121	$	—	$	—
Corporate bonds and notes (2)	43,445		—		43,445		—
Treasury and agency notes and bills (2)	5,962		—		5,962		—
Commercial paper (2)	3,731		—		3,731		—
Total Assets	$	55,259	$	2,121	$	53,138	$	—

The following footnotes indicate where the noted items were recorded in the Condensed Consolidated Balance Sheet at March 31, 2017:


(1)	Reported as cash and cash equivalents.


(2)	Reported as short-term investments.

The Company also has outstanding debt at March 31, 2017 and December 31, 2016 that is considered a level 2 liability and is measured at fair value on a recurring basis. See Note 8 “Debt” for additional information. At March 31, 2017 and December 31, 2016, the fair value of our debt is not materially different than the outstanding principal amount.

The following is a list of the Company’s assets required to be measured at fair value on a recurring basis and where they were classified within the hierarchy as of December 31, 2016 (in thousands):



	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Marketable securities
Money market funds (1)	$	14,146	$	14,146	$	—	$	—
Corporate bonds and notes (2)	36,502		—		36,502		—
Treasury and agency notes and bills (2)	5,972		—		5,972		—
Commercial paper (2)	5,216		—		5,216		—
Total Assets	$	61,836	$	14,146	$	47,690	$	—

The following footnotes indicate where the noted items were recorded in the Condensed Consolidated Balance Sheet at December 31, 2016:


(1)	Reported as cash and cash equivalents.


(2)	Reported as short-term investments.