Fair Value Measurements

9 Months Ended

Sep. 30, 2012

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

ASC 820, “Fair Value Measurements and Disclosures,” (ASC 820) defines fair value as the exchange price that would be received for 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. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. The Company’s Level 1 assets are investments in money market mutual funds, government agency bonds, corporate notes, United States treasuries, and certificates of deposit.

Level 2: Quoted prices for similar assets or liabilities in active markets; or observable prices that are based on observable market data, based on directly or indirectly market-corroborated inputs. The Company’s Level 2 liabilities are interest rate swaps.

Level 3: Unobservable inputs that are supported by little or no market activity, and are developed based on the best information available given the circumstances. The Company has no Level 3 inputs.

Assets and liabilities measured at fair value are based on one or more of four valuation techniques. The four valuation techniques are as follows:

(a) Market approach—prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities

(b) Cost approach—amount that would be required to replace the service capacity of an asset (replacement cost)

(c) Income approach—techniques to convert future amounts to a single present amount based on market expectations (including present value techniques, option-pricing and excess earnings models)

(d) The valuations of the interest rate swaps intended to mitigate the Company’s interest rate risk are determined with the assistance of a third party financial institution using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each instrument. This analysis utilizes observable market-based inputs, including interest rate curves and interest rate volatility, and reflects the contractual terms of these instruments, including the period to maturity.

The following tables present financial assets and liabilities at September 30, 2012 and December 31, 2011 for which the Company measures fair value on a recurring basis, by level, within the fair value hierarchy:

September 30, 2012	Total		Level 1		Level 2		Level 3		Valuation Technique
Assets
Money market mutual funds	$	11,027	$	11,027	$	—	$	—	(a)
Government agency bonds	4,077		4,077		—		—		(a)
Corporate notes	4,004		4,004		—		—		(a)
United States treasuries	3,687		3,687		—		—		(a)
Certificates of deposit	1,501		1,501		—		—		(a)
Liabilities
Interest rate swaps	$	568	$	—	$	568	$	—	(d)

December 31, 2011	Total		Level 1		Level 2		Level 3		Valuation Technique
Assets
Government agency bonds	$	9,015	$	9,015	$	—	$	—	(a)
Money market mutual funds	8,818		8,818		—		—		(a)
Corporate notes	3,019		3,019		—		—		(a)
Certificates of deposit	2,701		2,701		—		—		(a)
Liabilities
Interest rate swaps	$	510	$	—	$	510	$	—	(d)

Certain financial instruments are carried at cost on the consolidated balance sheets, which approximates fair value due to their short-term, highly liquid nature. These instruments include cash and cash equivalents, accounts receivable, accounts payable and accrued expenses.