Fair Value Measurements

12 Months Ended

Dec. 31, 2015

(6) Fair Value Measurements

The Company holds certain assets that are required to be measured at fair value in accordance with United States GAAP. The Company determined fair value of these assets based on the following three levels of inputs:

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 that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Some of the Company’s marketable securities primarily utilize broker quotes in a non‑active market for valuation of these securities.

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, therefore requiring an entity to develop its own assumptions.

As of December 31, 2015, the Company held certain assets that are required to be measured at fair value on a recurring basis. Assets measured at fair value on a recurring basis are summarized below (in thousands):


	Fair Value Measurements as of December 31, 2015
	Total			Level 1		Level 2		Level 3
Marketable Securities
Bonds	$	286,637		$	—	$	286,637	$	—
Commercial paper		31			—		31		—
Asset backed securities	$	286,668		$	—	$	286,668	$	—
Cash, Cash Equivalents and Restricted Cash		211,251			211,251		—		—
Other Assets(a)		2,321	(a)		—		—		2,321
Total Assets Measured at Fair Value	$	500,240		$	211,251	$	286,668	$	2,321


	Fair Value Measurements as of December 31, 2014
	Total		Level 1		Level 2		Level 3
Marketable Securities
Bonds	$	410,163	$	—	$	410,163	$	—
Commercial paper		5,110		—		5,110		—
Asset backed securities		415,273		—		415,273		—
Cash, Cash Equivalents and Restricted Cash		143,857		143,857		—		—
Other Assets(a)		2,309		—		—		2,309
Total Assets Measured at Fair Value	$	561,439	$	143,857	$	415,273	$	2,309

(a)

Auction rate securities included in long-term “Other assets” in the Consolidated Balance Sheet

Based on market conditions, the Company uses a discounted cash flow valuation methodology for auction rate securities. Accordingly, for purposes of the foregoing consolidated financial statements, these securities were categorized as Level 3 securities. The Company’s “Marketable Securities” classified as Level 2 primarily utilize broker quotes in a non‑active market for valuation of these securities.

No significant transfers between Level 1, Level 2 and Level 3 occurred during the year ended December 31, 2015. The Company’s policy regarding the recording of transfers between levels is to record any such transfers at the end of the reporting period.

The following table presents the Company’s assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at December 31, 2015 (in thousands):

Fair Value Measurements Using Significant Unobservable Inputs

(Level 3)


	Auction Rate
	Securities
Balance at January 1, 2015	$	2,309
Total realized and unrealized gains or (losses)
Included in earnings		—
Included in other comprehensive income		12
Transferred out		—
Settlements		—
Balance at December 31, 2015	$	2,321

- 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.

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