Fair Value Measurements

3 Months Ended

Jun. 30, 2011

Fair Value Measurements

Fair Value Measurements

5. Fair Value Measurements

The Company follows the authoritative guidance for fair value measurements of its financial assets and financial liabilities.

The guidance clarifies the definition of fair value as an exit price representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The following summarizes the three-tier value hierarchy, which prioritizes, in descending order, the inputs used in measuring fair value as follows:

Level I	–	Observable inputs for identical securities such as quoted prices in active markets,
Level II	–	Inputs other than the quoted prices in active markets that are observable either directly or indirectly, and
Level III	–	Unobservable inputs in which there is little or no market data, which requires 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. On a recurring basis, the Company measures certain financial assets and liabilities at fair value, including marketable securities and derivative financial instruments.

The Company's Level I investments are classified as such because they are valued using quoted market prices or alternative pricing sources with reasonable levels of price transparency. The Company's Level II investments are classified as such because fair value is being calculated using data from similar but not identical issues, or a discounted cash flow model using the contractual interest rate as compared to the underlying interest yield curve. The Company's short-term auction rate securities at March 31, 2011 were classified as Level II since the amount which was redeemed in April 2011 was based upon a redemption notice for an inactive market. The Company's long-term auction rate securities are classified as Level III of the fair value hierarchy due to the limited market data for pricing these securities and the subjective factors considered to create a liquidity discount. The Company's derivative financial instruments consist of forward foreign exchange contracts and are classified as Level II because the fair values of these derivatives are determined using models based on market observable inputs, including spot prices for foreign currencies and credit derivatives, as well as an interest rate factor. For further information on the Company's derivative instruments refer to Note 10.

The following table summarizes the valuation of the Company's financial assets and liabilities by the above categories as of June 30, 2011 (in thousands):

	Total Fair Value			Level I		Level II			Level III
ASSETS:
Cash and cash equivalents	$	39,473		$	39,473	$	0		$	0
U.S. government and municipal obligations		96,949			96,949		0			0
Commercial paper		27,829			0		27,829			0
Corporate bonds		26,229			26,229		0			0
Certificate of deposits		1,506			0		1,506			0
Auction rate securities		17,248			0		0			17,248
Derivative financial instruments		144			0		144			0
	$	209,378		$	162,651	$	29,479		$	17,248
LIABILITIES:
Derivative financial instruments	$	(23	)	$	0	$	(23	)	$	0
	$	(23	)	$	0	$	(23	)	$	0

The following table sets forth a reconciliation of changes in the fair value of the Company's Level III financial assets (in thousands):

	June 30,
	2011			2010
Balance at beginning of period	$	17,482		$	28,475
Change in accrued interest receivable		(29	)		(36	)
Change in valuation		0			151
Redemptions		(250	)		(4,300	)
Reversal of temporary loss on redeemed securities		45			794
Balance at end of period	$	17,248		$	25,084