Fair Value Of Financial Instruments

12 Months Ended

Dec. 31, 2011

Fair Value Of Financial Instruments [Abstract]

Fair Value Of Financial Instruments

Note 6. Fair Value of Financial Instruments

Fair Value Hierarchy

We define fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value measurements for assets and liabilities required or permitted to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and we consider what assumptions market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.

Our financial instruments consist primarily of money market funds, municipal bonds, variable-rate demand notes, corporate bonds, auction-rate securities, and derivatives. Three levels of inputs are used to measure the fair value of our instruments:

Level 1 —	Quoted prices in active markets for identical assets or liabilities.
	We classify our money market funds as Level 1 instruments as they are traded in active markets with sufficient volume and frequency of transactions.
Level 2 —	Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated with observable market data for substantially the full term of the assets or liabilities.
	We classify our municipal bonds, variable-rate demand notes, and corporate bonds as Level 2 instruments due to our use of observable market prices in less active markets or, when observable market prices are not available, our use of non-binding market prices that are corroborated by observable market data or quoted market prices for similar instruments. We classify our derivative instruments, with the exception of our contingent interest derivative liability, as Level 2 instruments due to our use of observable inputs other than quoted prices, including interest rates and credit risk.
Level 3 —	Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.
	We classify our auction-rate securities as Level 3 instruments as we use a cash-flow-based valuation model to measure the fair value of these securities. This model requires the use of significant unobservable inputs. Our valuation of these securities incorporates our assumptions about the anticipated term and yield that a market participant would require to purchase such securities in the marketplace.
	We classify our contingent interest derivative liability as a Level 3 instrument as we use a Monte Carlo valuation model to measure the fair value. This model requires the use of significant unobservable inputs. Our valuation incorporates our assumptions about the comparable yield and stock borrow rate that a market participant would obtain in the marketplace.

During the years ended December 31, 2011 and 2010, there were no transfers of financial instruments between Level 1 and Level 2 or transfers in or out of Level 3.

Financial Instruments Measured at Fair Value on a Recurring Basis

Financial instruments measured at fair value on a recurring basis, excluding accrued interest components, consist of the following types of instruments as presented on our Consolidated Balance Sheets:

	Fair Value Measurements as of December 31, 2011
	Quoted Prices in  Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable  Inputs (Level 3)		Total
	(In thousands)
Assets
Cash and cash equivalents
Money market funds	$	454,208	$	0	$	0	$	454,208
Short-term investments
Municipal bonds		0		262,793		0		262,793
Variable rate demand notes		0		56,540		0		56,540
Corporate bonds		0		49,008		0		49,008
Auction Rate Securities		0		0		9,700		9,700
Other current assets
Derivative assets (1)		0		337		0		337
Non-current restricted cash and cash equivalents
Money market funds		82,118		0		0		82,118
Long-term investments
Auction rate securities		0		0		42,891		42,891
Total assets	$	536,326	$	368,678	$	52,591	$	957,595
Liabilities
Other current liabilities
Derivative liabilities (1)	$	0	$	213	$	0	$	213
Other non-current liabilities
Embedded derivative liabilities(1)		0		0		478		478
Total liabilities	$	0	$	213	$	478	$	691

(1) See additional disclosures relating to our derivatives and hedging activities in Note 8 below.

	Fair Value Measurements as of December 31, 2010
	Quoted Prices in  Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable  Inputs (Level 3)		Total
	(In thousands)
Assets
Cash and cash equivalents
Money market funds	$	172,181	$	0	$	0	$	172,181
Short-term investments
Municipal bonds		0		291,296		0		291,296
Variable rate demand notes		0		94,849		0		94,849
Corporate bonds		0		18,966		0		18,966
Other current assets
Derivative assets (1)		0		118		0		118
Non-current restricted cash and cash equivalents
Money market funds		64,352		0		0		64,352
Long-term investments
Auction rate securities		0		0		68,645		68,645
Total assets	$	236,533	$	405,229	$	68,645	$	710,407
Liabilities
Other current liabilities
Derivative liabilities (1)	$	0	$	1,562	$	0	$	1,562

(1) See additional disclosures relating to our derivatives and hedging activities in Note 8 below.

We classify financial instruments in Level 3 of the fair value hierarchy when there is reliance on at least one significant unobservable input to the valuation model. In addition to these unobservable inputs, the valuation models for Level 3 financial instruments typically also rely on a number of inputs that are readily observable either directly or indirectly. Thus, the gains and losses presented below include changes in the fair value related to both observable and unobservable inputs.

The table below presents reconciliations of all financial instrument assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3). All Level 3 assets are auction-rate securities. Auction-rate securities include auction-rate notes and auction-rate preferred shares of tax-exempt closed-end municipal bond funds. Auction-rate notes consist of student loans that are substantially backed by the federal government. Due to auction failures in the marketplace, we will not have access to these funds unless (i) future auctions are successful, (ii) the securities are called by the issuer, (iii) we sell the securities in a secondary market, or (iv) the underlying notes mature. Currently, there are no active secondary markets. As of December 31, 2011 we have recorded a cumulative temporary impairment loss of $6.0 million within OCI based upon our assessment of the fair value of these securities. We believe that this impairment is temporary as we do not intend to sell these securities until recovery at par. We do not believe that we will be required to sell these securities before recovery of their amortized cost and, based on our credit quality assessment, we expect to recover the amortized cost of these securities.

	Asset Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	December 31,  2011			December 31,  2010
	(In thousands)
Balance, beginning of period	$	68,645		$	78,763
Decrease in unrealized losses included in Other comprehensive income (loss)		2,521			2,232
Sales		(18,575	)		(12,350	)
Balance, end of period	$	52,591		$	68,645

The table below presents reconciliations of our financial instrument liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3). Our Level 3 liability relates to the contingent interest payment provision on our Senior Convertible Notes that may require us to pay additional interest based on certain thresholds, beginning with the semi-annual interest payment on May 15, 2021, and upon the occurrence of certain events, as outlined in the indenture governing the Senior Convertible Notes.

	Liability Fair  Value Measurements Using Significant Unobservable Inputs (Level 3)
	December 31,  2011
	(In thousands)
Balance, beginning of period	$	0
Issuances		(547	)
Unrealized gains included in earnings		69
Balance, end of period	$	(478	)

Fair Value of Other Financial Instruments

The carrying value of cash, accrued interest receivable, non-current restricted cash, and current debt obligations approximates fair value because of the short maturity of these instruments. Other investments primarily relate to corporate-owned life insurance contracts used to offset our deferred compensation obligations. These investments have a determinable cash surrender value, which is the best available evidence of fair value. Accrued interest receivable and other investments are classified within Short-term investments on our Consolidated Balance Sheets. Our Senior Convertible Notes and Other long-term debt obligations are not publicly traded. The carrying amount and fair value of our Senior Convertible Notes was $272.2 million and $227.6 million, respectively, as of December 31, 2011. Our Other long-term debt is primarily denominated in Euros and the estimated fair value is primarily based on a market approach, comparing our interest rates to those rates we believe we would reasonably receive upon re-entry into the market. The carrying amount and fair value of our Other long-term debt were $103.2 million and $104.2 million, respectively, as of December 31, 2011 and $105.6 million and $106.7 million, respectively, as of December 31, 2010. Judgment is required to estimate the fair value, using available market information and appropriate valuation methods.

See additional disclosures regarding our investments in Note 7 below.