Fair Value Measurements

3 Months Ended

Dec. 31, 2012

Fair Value Measurements

3. Fair Value Measurements

Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability (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 accounting guidance establishes a three-level hierarchy for disclosure that is based on the extent and level of judgment used to estimate the fair value of assets and liabilities.

• Level 1—uses unadjusted quoted prices that are available in active markets for identical assets or liabilities. Our Level 1 securities are comprised of money market funds and certain equity securities.

• Level 2—uses inputs other than quoted prices included in Level 1 that are either directly or indirectly observable through correlation with market data. These include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and inputs to valuation models or other pricing methodologies that do not require significant judgment because the inputs used in the model, such as interest rates and volatility, can be corroborated by readily observable market data. Our Level 2 securities are comprised of U.S. government and corporate debt obligations that are generally held to maturity.

• Level 3—uses one or more significant inputs that are unobservable and supported by little or no market activity, and that reflect the use of significant management judgment. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques, and significant management judgment or estimation. We do not have any assets or liabilities that are valued using inputs identified under a Level 3 hierarchy.

The following table represents financial assets that we measured at fair value on a recurring basis at December 31, 2012 and September 30, 2012, respectively:

December 31, 2012	Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Fair Value as of December 31, 2012
			(In thousands)
Assets:
Cash equivalents (1)	$	13,681	$	—	$	13,681
Marketable securities (3)		5,496		—		5,496
Total	$	19,177	$	—	$	19,177

September 30, 2012	Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Fair Value as of September 30, 2012
			(In thousands)
Assets:
Cash equivalents (1)	$	644	$	—	$	644
U.S. corporate debt (2)		—		2,008		2,008
U.S. government obligations (2)		—		20,000		20,000
Marketable securities (3)		5,417		—		5,417
Total	$	6,061	$	22,008	$	28,069

(1) Included in cash and cash equivalents on our balance sheet at December 31, 2012 and September 30, 2012. Not included in this table are cash deposits of $77.2 million and $71.0 million at December 31, 2012 and September 30, 2012, respectively.

(2) Included in current marketable securities on our balance sheet at September 30, 2012.

(3) Represents securities held under a supplemental retirement and savings plan for certain officers and senior management employees, which are distributed upon termination or retirement of the employees. Included in long-term marketable securities on our balance sheet at December 31, 2012 and September 30, 2012.

Where applicable, we use quoted prices in active markets for identical assets or liabilities to determine fair value. This pricing applies to our Level 1 investments. To the extent quoted prices in active markets for assets or liabilities are not available, the valuation techniques used to measure the fair values of our financial assets incorporate market inputs, which include reported trades, broker/dealer quotes, benchmark yields, issuer spreads, benchmark securities and other inputs derived from or corroborated by observable market data. This methodology applies to our Level 2 investments. We have not changed our valuation techniques in measuring the fair value of any financial assets and liabilities during the period.

For the fair value of our derivative instruments, see Note 4 to the condensed consolidated financial statements.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Assets and liabilities measured at fair value on a nonrecurring basis primarily include goodwill and definite-lived intangible assets which are measured at fair value for the purposes of our annual impairment assessment.