Fair Value Measurements

We, in accordance with U.S. GAAP, define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Effective January 1, 2008, we elected the fair value option for certain of our marketable securities purchased since such adoption. Management initially elected the fair value option for certain of our marketable securities because it views such investment securities as highly liquid and available to be drawn upon for working capital purposes making them similar to cash and cash equivalents. Accordingly, we recorded the net unrealized gain or loss in the other income, investment and interest caption in our consolidated income statements. We have not elected the fair value option for marketable securities acquired after December 31, 2009. Although these assets continue to be highly liquid and available, we believe these assets are more representative of our investing activities, and they will be available for future needs of the Company to support its projected growth.

The carrying value of certain assets and liabilities is considered to be representative of their fair value, due to the short term nature of these instruments. Such assets and liabilities include cash and cash equivalents, marketable securities, accounts and notes receivable, prepaid expenses and other, and accounts payable (including income taxes payable and accrued expenses).

The following tables provide fair value measurement information for our marketable securities and deferred compensation fund investment assets as of September 30, 2013 and December 31, 2012:



	As of September 30, 2013
					Fair Value Measurement Using:
	Carrying Amount		Total Fair Value		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets:
Marketable securities
Municipal bonds	$	11,562,000	$	11,562,000	$	—	$	11,562,000	$	—
Deferred compensation fund
Money Market	$	4,338,000	$	4,338,000	$	—	$	4,338,000	$	—
Balanced and Lifestyle	7,387,000		7,387,000		7,387,000		—		—
Large Cap Growth	3,699,000		3,699,000		3,699,000		—		—
Small Cap Value	1,853,000		1,853,000		1,853,000		—		—
Fixed Income	2,200,000		2,200,000		2,200,000		—		—
International	970,000		970,000		970,000		—		—
Mid Cap Growth	792,000		792,000		792,000		—		—
Deferred compensation fund	$	21,239,000	$	21,239,000	$	16,901,000	$	4,338,000	$	—



	As of December 31, 2012
					Fair Value Measurement Using:
	Carrying Amount		Total Fair Value		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets:
Marketable securities
Municipal bonds	$	21,322,000	$	21,322,000	$	—	$	21,322,000	$	—
Deferred compensation fund
Money Market	$	4,114,000	$	4,114,000	$	—	$	4,114,000	$	—
Balanced and Lifestyle	6,311,000		6,311,000		6,311,000		—		—
Large Cap Growth	2,724,000		2,724,000		2,724,000		—		—
Small Cap Value	1,936,000		1,936,000		1,936,000		—		—
Fixed Income	1,461,000		1,461,000		1,461,000		—		—
International	785,000		785,000		785,000		—		—
Mid Cap Growth	500,000		500,000		500,000		—		—
Deferred compensation fund	$	17,831,000	$	17,831,000	$	13,717,000	$	4,114,000	$	—

The fair value of the municipal bonds is measured using pricing service data using third party pricing data. The fair value of equity investments in the funded deferred compensation plan are valued (Level 1) based on quoted market prices. The money market fund in the funded deferred compensation plan is valued (Level 2) at the net asset value (“NAV”) of the shares held by the plan at the end of the period. As a practical expedient, fair value of our money market fund is valued at the NAV as determined by the custodian of the fund. The money market fund includes short-term United States dollar denominated money-market instruments. The money market fund can be redeemed at its NAV at its measurement date as there are no significant restrictions on the ability of participants to sell this investment. These assets will be redeemed by the plan participants on an as needed basis.

Unrealized gains and losses from marketable securities for investments recorded under the fair value option are recorded in the other income – investment and interest caption on our consolidated statements of comprehensive income. For the three and nine months ended September 30, 2013, there were no unrealized gains or losses recorded. There were no gains or losses for the three months ended September 30, 2012 as there were no investments recorded under the fair value option. For the nine months ended September 30, 2012, we recorded unrealized losses from marketable securities of $82,000.



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value		Other-than-temporary Impairments
September 30, 2013
Type of security:
Municipal bonds — available for sale	11,491,000		77,000		(6,000		)	11,562,000		—
Total debt securities	$	11,491,000	$	77,000	$	(6,000	)	$	11,562,000	$	—

December 31, 2012
Type of security:
Municipal bonds — available for sale	21,111,000		220,000		(9,000		)	21,322,000		—
Total debt securities	$	21,111,000	$	220,000	$	(9,000	)	$	21,322,000	$	—

For the three and nine months ended September 30, 2013, we received total proceeds of $10,321,000 and $13,321,000 respectively, from sales of available for sale municipal bonds. These sales resulted in realized gains of $31,000 and $47,000 recorded in other income – investment and interest caption on our statement of comprehensive income for the three and nine months ended September 30, 2013, respectively. The basis for the sale of these securities was a specific identification of each bond sold during this period.

For the three and nine months ended September 30, 2012, we received total proceeds of $1,100,000 and $15,971,000 respectively, from sales of available for sale municipal bonds. There were no realized gains from the sale of available for sale municipal bonds for the three months ended September 30, 2012. The sales of available for sale municipal bonds for the nine months ended September 30, 2012 resulted in realized gains of $224,000 recorded in other income – investment and interest caption on our statement of comprehensive income. The basis for the sale of these securities was a specific identification of each bond sold during this period.

The following tables include contractual maturities of debt securities held at September 30, 2013 and December 31, 2012, which are classified as marketable securities in the consolidated Balance Sheet.



	Municipal Bonds — Available for Sale
Contractual maturity:	September 30, 2013		December 31, 2012
Maturing in one year or less	$	3,223,000	$	5,164,000
Maturing after one year through three years	6,102,000		12,134,000
Maturing after three years	2,237,000		4,024,000
Total debt securities	$	11,562,000	$	21,322,000