Quarterly report pursuant to Section 13 or 15(d)

Financial Instruments

v2.4.0.6
Financial Instruments
 9 Months Ended
Sep. 30, 2012
Financial Instruments

3. Financial Instruments

The composition of financial instruments is as follows:

 

     September 30, 2012  
   Amortized
Cost 		    Gross Unrealized     Fair
Value 		 
     Gains      Losses    

Money market funds

    $ 9,695      $ —       $ —      $ 9,695   

Government debt securities

      2,999        3         —        3,002   

Corporate debt securities

      50,393        20         (4 )      50,409   
  

 

 

    

 

 

     

 

 

    

 

 

  
     63,087        23         (4 )      63,106   

Less amounts included in cash and cash equivalents

      (9,695 )      —         —        (9,695 ) 
  

 

 

    

 

 

     

 

 

    

 

 

  
   $ 53,392      $ 23       $ (4 )    $ 53,411   
  

 

 

    

 

 

     

 

 

    

 

 

  

 

     December 31, 2011  
   Amortized
Cost 		    Gross
Unrealized		     Fair
Value 		 
     Gains      Losses    

Money market funds

    $ 14,372      $ —       $ —      $ 14,372   

Government debt securities

      15,966        3         —        15,969   

Corporate debt securities

      41,764        7         (30 )      41,741   
  

 

 

    

 

 

     

 

 

    

 

 

  
     72,102        10         (30 )      72,082   

Less amounts included in cash and cash equivalents

      (14,372 )      —         —        (14,372 ) 
  

 

 

    

 

 

     

 

 

    

 

 

  
   $ 57,730      $ 10       $ (30 )    $ 57,710   
  

 

 

    

 

 

     

 

 

    

 

 

  

As of September 30, 2012, the Company held 7 corporate debt securities with an aggregate fair value of $13,090 that were in an unrealized loss position for less than 12 months. The gross unrealized losses of $4 at September 30, 2012 represent temporary impairments on corporate debt securities related to multiple issuers, and were primarily caused by fluctuations in U.S. interest rates. The Company has determined that the gross unrealized losses on these securities at September 30, 2012 are temporary in nature. The Company evaluates securities for other-than-temporary impairment on a quarterly basis. Impairment is evaluated considering numerous factors, and their relative significance varies depending on the situation. Factors considered include the length of time and extent to which fair value has been less than the cost basis, the financial condition and near-term prospects of the issuer, and our intent and ability to hold the security in order to allow for an anticipated recovery in fair value.

All of the Company’s long-term available-for-sale securities were due between one and two years as of September 30, 2012.

 

The fair values of the Company’s financial instruments are the amounts that would be received in an asset sale or paid to transfer a liability in an orderly transaction between unaffiliated market participants and are recorded using a hierarchal disclosure framework based upon the level of subjectivity of the inputs used in measuring assets and liabilities. The levels are described below:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities.

Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.

Level 3: Unobservable inputs are used when little or no market data is available.

The Company classifies its financial instruments within Level 1 or Level 2 of the fair value hierarchy. This is because the Company values financial instruments using quoted market prices or alternate pricing sources and models utilizing market observable inputs. The Company held no Level 3 financial instruments as of September 30, 2012 and December 31, 2011.

The following table presents a summary of the Company’s financial instruments that are measured on a recurring basis:

 

            Fair Value Measurements at September 30, 2012  
     Balance at
September 30,
2012		      Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)		      Significant
Other
Observable
Inputs
(Level 2)		      Significant
Unobservable
Inputs
(Level 3)		  

Money market funds

    $ 9,695       $ 9,695       $ —       $ —   

Government debt securities

      3,002         —         3,002         —   

Corporate debt securities

      50,409         —         50,409         —   
  

 

 

     

 

 

     

 

 

     

 

 

  
   $ 63,106       $ 9,695       $ 53,411       $ —   
  

 

 

     

 

 

     

 

 

     

 

 

  

 

            Fair Value Measurements at December 31, 2011  
     Balance at
December 31,
2011		      Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)		      Significant
Other
Observable
Inputs
(Level 2)		      Significant
Unobservable
Inputs
(Level 3)		  

Money market funds

    $ 14,372       $ 14,372       $ —       $ —   

Government debt securities

      15,969         —         15,969         —   

Corporate debt securities

      41,741         —         41,741         —   
  

 

 

     

 

 

     

 

 

     

 

 

  
   $ 72,082       $ 14,372       $ 57,710       $ —   
  

 

 

     

 

 

     

 

 

     

 

 

  

There were no transfers between Level 1, Level 2 or Level 3 securities in the nine months ended September 30, 2012.