Fair Value Measurements

9 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurements

FAIR VALUE MEASUREMENTS

Factors used in determining the fair value of financial assets and liabilities are summarized into three broad categories:

• Level 1 - observable inputs such as quoted prices (unadjusted) in active liquid markets for identical securities as of the reporting date;

• Level 2 - other significant directly or indirectly observable inputs, including quoted prices for similar securities, interest rates, prepayment speeds and credit risk; or observable market prices in markets with insufficient volume and/or infrequent transactions; and

• Level 3 - significant inputs that are generally unobservable inputs for which there is little or no market data available, including our own assumptions in determining fair value.

Assets and liabilities measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015 were as follows (in thousands):

	September 30, 2016
	Level 1		Level 2			Level 3		Total
Assets:
Cash Equivalents
Money market funds	$	3,474	$	—		$	—	$	3,474
Commercial paper	—		1,999			—		1,999
Total cash equivalents	3,474		1,999			—		5,473
Available-for-Sale Securities
Certificates of deposit(1)	—		25,048			—		25,048
Corporate bonds	—		1,027			—		1,027
U.S. government bonds	—		2,006			—		2,006
Total available-for-sale securities	—		28,081			—		28,081
Total assets measured at fair value	$	3,474	$	30,080		$	—	$	33,554
Liabilities:
Derivatives
Interest rate swap contract	$	—	$	(865	)	$	—	$	(865	)
Total liabilities measured at fair value	$	—	$	(865	)	$	—	$	(865	)

	December 31, 2015
	Level 1		Level 2		Level 3		Total
Assets:
Cash Equivalents
Money market funds	$	1	$	—	$	—	$	1
Corporate bonds	—		733		—		733
Total cash equivalents	1		733		—		734
Available-for-Sale Securities
Certificates of deposit(1)	—		25,234		—		25,234
Corporate bonds	—		4,764		—		4,764
Total available-for-sale securities	—		29,998		—		29,998
Total assets measured at fair value	$	1	$	30,731	$	—	$	30,732

⁽¹⁾ All certificates of deposit are within current FDIC insurance limits.

We did not have any liabilities measured at fair value on a recurring basis as of December 31, 2015.

For our assets measured at fair value on a recurring basis, we recognize transfers between levels at the actual date of the event or change in circumstance that caused the transfer. There were no transfers between levels during the three and nine months ended September 30, 2016, nor for the year ended December 31, 2015.

We did not have any changes to our valuation techniques during the three and nine months ended September 30, 2016, nor for the year ended December 31, 2015.

We classify our marketable securities as available-for-sale and, accordingly, record them at fair value. Level 1 investment valuations are obtained from real-time quotes for transactions in active exchange markets involving identical assets. Level 2 investment valuations are obtained from inputs, other than quoted market prices in active markets for identical assets, that are directly or indirectly observable in the marketplace and quoted prices in markets with limited volume or infrequent transactions. The factors or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Unrealized holding gains and losses are excluded from earnings and are reported net of tax in comprehensive income until realized.

The fair value of our interest rate swap contract is calculated as the present value of estimated future cash flows using discount factors derived from relevant Level 2 market inputs, including forward curves and volatility levels.

We recognize or disclose the fair value of certain assets, such as non-financial assets, primarily property, plant and equipment, goodwill, other intangible assets and certain other long-lived assets in connection with impairment evaluations. All of our nonrecurring valuations use significant unobservable inputs and therefore fall under Level 3 of the fair value hierarchy. We did not perform any valuations on assets or liabilities that are valued at fair value on a nonrecurring basis during the first nine months of 2016. During the fourth quarter of 2015, we performed our annual goodwill and indefinite-lived trade names impairment analyses effective as of October 1, 2015. During the nine months ended September 30, 2016 and the year ended December 31, 2015, we did not record any other-than-temporary impairments on our financial assets required to be measured at fair value on a nonrecurring basis.