FAIR VALUE MEASUREMENTS AND AUCTION RATE SECURITIES

As of December 31, 2011, Acacia held investment grade auction rate securities with a par value totaling $2,425,000, consisting of auction rate investments backed by student loans, which are classified as noncurrent, available-for-sale and reflected at fair value. The fair values of these securities were estimated utilizing an analysis of certain unobservable inputs (Level 3) and by reference to periodic discounted cash flow analyses. These analyses considered, among other items, the underlying structure of each security, the collateral underlying the security investments, the creditworthiness of the counterparty, the present value of future principal and contractual interest payments discounted at rates considered to be reflective of current market conditions, consideration of the probabilities of default, continued auction failure, or repurchase or redemption at par for each period, and estimates of the time period over which current liquidity related issues will be resolved.

All outstanding auction rate securities as of December 31, 2011, were sold during the year ended December 31, 2012. The following table presents the auction rate securities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the periods presented (in thousands):



	2012			2011

Auction rate securities:
Beginning balance as of January 1	$	1,956		$	2,001
Total gains (realized or unrealized):
Recognized gains included in earnings	118			15
Settlements	(2,074		)	(60		)
Ending balance as of December 31	$	—		$	1,956