Fair Value Measurements

The Company’s current assets (other than marketable securities and inventories) and current liabilities are financial instruments and most of these items are recorded at cost in the Consolidated Balance Sheets. The estimated fair value of these financial instruments approximates their carrying value due to their short-term nature. Our financial assets that are measured at fair value on a recurring basis are our marketable securities and our deferred compensation funding. We believe the recorded values of all of our financial instruments approximate their current fair values because of their nature, stated interest rates and respective maturity dates or durations.

The Company’s marketable securities consist of tax-exempt municipal bonds, which we classify as available-for-sale and which are reported at fair value. Unrealized gains and losses associated with these investments are included in other comprehensive income (net of tax) within our Consolidated Statements of Comprehensive Income. The fair value of these marketable securities is classified within Level 2 of the fair value hierarchy, as these securities are measured using quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable. Such valuations are determined by a third-party pricing service. For the three months ended March 31, 2017, we recorded unrealized gains on marketable securities of $0.5 million and for the three months ended March 31, 2016, we recorded unrealized gains on marketable securities of $0.6 million.

For the three months ended March 31, 2017 and 2016, we received total proceeds, less the amount of interest received, of $7.5 million and $2.0 million, respectively, from sales of available-for-sale municipal bonds. For the three months ended March 31, 2017, these sales resulted in realized losses of $48 thousand which were recorded in “Other income, net – Investment and interest” in our Consolidated Statements of Comprehensive Income. The basis for the sale of these securities was the specific identification of each bond sold during the period. For the three months ended March 31, 2016, there were $62 thousand in realized gains.

The investments under the funded deferred compensation plan are accounted for as trading securities and unrealized gains or losses are included in earnings. The fair value of these investments are determined based on quoted market prices (Level 1).

The following tables provide fair value measurement information for our marketable securities and deferred compensation fund investments as of March 31, 2017 and December 31, 2016:



	As of March 31, 2017
					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)
	(in thousands)
Financial Assets:
Marketable securities
Municipal bonds — available for sale	$	68,260	$	68,260	$	—	$	68,260	$	—

Deferred compensation fund
Money Market⁽¹⁾	$	2,903	$	2,903	$	—	$	2,903	$	—
Balanced and Lifestyle	7,420		7,420		7,420		—		—
Large Cap Growth	6,226		6,226		6,226		—		—
Small Cap Growth	2,983		2,983		2,983		—		—
Fixed Income	2,799		2,799		2,799		—		—
International	1,237		1,237		1,237		—		—
Mid Cap Growth	1,514		1,514		1,514		—		—
Deferred compensation fund	$	25,082	$	25,082	$	22,179	$	2,903	$	—



	As of December 31, 2016
					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)
	(in thousands)
Financial Assets:
Marketable securities
Municipal bonds — available for sale	$	67,730	$	67,730	$	—	$	67,730	$	—

Deferred compensation fund
Money Market ⁽¹⁾	$	3,147	$	3,147	$	—	$	3,147	$	—
Balanced and Lifestyle	7,162		7,162		7,162		—		—
Large Cap Growth	5,583		5,583		5,583		—		—
Small Cap Growth	2,933		2,933		2,933		—		—
Fixed Income	2,752		2,752		2,752		—		—
International	1,132		1,132		1,132		—		—
Mid Cap Growth	1,410		1,410		1,410		—		—
Deferred compensation fund	$	24,119	$	24,119	$	20,972	$	3,147	$	—

⁽¹⁾

The fair value of the money market fund is based on the net asset value (“NAV”) of the shares held by the plan at the end of the period. The money market fund includes short-term United States dollar denominated money market instruments and the NAV is determined by the custodian of the fund. The money market fund can be redeemed at its NAV at the measurement date as there are no significant restrictions on the ability to sell this investment.



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value		Other-than-temporary Impairments
	(in thousands)
March 31, 2017
Type of security:
Municipal bonds — available for sale	$	68,013	$	477	$	(230	)	$	68,260	$	—
Total debt securities	$	68,013	$	477	$	(230	)	$	68,260	$	—

December 31, 2016
Type of security:
Municipal bonds — available for sale	$	68,220	$	178	$	(668	)	$	67,730	$	—
Total debt securities	$	68,220	$	178	$	(668	)	$	67,730	$	—

The following table summarizes the contractual maturities of debt securities held at March 31, 2017 and December 31, 2016, which are classified as marketable securities in the Consolidated Balance Sheets:



	Municipal Bonds — Available for Sale
Contractual maturity:	March 31, 2017		December 31, 2016
	(in thousands)
Maturing in one year or less	$	784	$	973
Maturing in second year through fifth year	18,021		28,671
Maturing in sixth year through tenth year	24,076		21,651
Maturing after ten years	25,379		16,435
Total debt securities	$	68,260	$	67,730