FAIR VALUE MEASUREMENTS

3 Months Ended

Mar. 31, 2016

FAIR VALUE MEASUREMENTS

5. FAIR VALUE MEASUREMENTS

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The Company records its marketable securities and forward contracts at fair value on a recurring basis. Fair value is an exit price, representing the amount that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants based on assumptions that market participants would use in pricing an asset or liability. As a basis for classifying the fair value measurements, a three-tier fair value hierarchy, which classifies the fair value measurements based on the inputs used in measuring fair value, was established as follows: (Level 1) observable inputs such as quoted prices in active markets for identical assets or liabilities; (Level 2) significant other inputs that are observable either directly or indirectly; and (Level 3) significant unobservable inputs on which there is little or no market data, which require the Company to develop its own assumptions. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value.

The Company’s money market funds are classified within Level 1 of the fair value hierarchy. The Company’s investments classified within Level 2 of the fair value hierarchy are valued based on a market approach using quoted prices, when available, or matrix pricing compiled by third party pricing vendors, using observable market inputs such as interest rates, yield curves, and credit risk. The Company’s foreign currency forward contracts, which are all classified within Level 2 of the fair value hierarchy, are valued based on the notional amounts and rates under the contracts and observable market inputs such as currency exchange rates and credit risk. If applicable, the Company will recognize transfers into and out of levels within the fair value hierarchy at the end of the reporting period in which the actual event or change in circumstance occurs. There were no transfers between Level 1 and Level 2 during the three months ended March 31, 2016.

The Company’s assets and liabilities measured at fair value on a recurring basis consisted of the following:

			Fair Value Measurements at Reporting Date Using
(in thousands)	March 31, 2016		Level 1		Level 2
Fair Value Assets:
Money market funds	$	6,273	$	6,273	$	—
Marketable securities:
Municipal bonds	$	50,249	$	—	$	50,249
Corporate bonds		49,582		—		49,582
Certificates of deposit		1,902		—		1,902
Total marketable securities	$	101,733	$	—	$	101,733
Foreign currency forward contracts	$	722	$	—	$	722
Fair Value Liabilities:
Foreign currency forward contracts	$	447	$	—	$	447

			Fair Value Measurements at Reporting Date Using
(in thousands)	December 31, 2015		Level 1		Level 2
Fair Value Assets:
Money market funds	$	573	$	573	$	—
Marketable securities:
Municipal bonds	$	57,335	$	—	$	57,335
Corporate bonds		66,815		—		66,815
Certificates of deposit		1,902		—		1,902
Total marketable securities	$	126,052	$	—	$	126,052
Foreign currency forward contracts	$	48	$	—	$	48
Fair Value Liabilities:
Foreign currency forward contracts	$	1,052	$	—	$	1,052

Assets Measured at Fair Value on a Nonrecurring Basis

Assets recorded at fair value on a nonrecurring basis, such as property and equipment, and intangible assets, are recognized at fair value when they are impaired. During the first three months of 2016 and 2015, the Company did not recognize any impairments on its assets measured at fair value on a nonrecurring basis.