Marketable Securities and Investments

9 Months Ended

Sep. 30, 2012

Marketable Securities [Abstract]

Marketable Securities and Investments

Marketable Securities and Investments

The Company accounts for financial assets and liabilities in accordance with a fair value measurement accounting standard. The accounting standard provides a framework for measuring fair value under GAAP and requires expanded disclosures regarding fair value measurements. Fair value is defined 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. The accounting standard also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs, where available, and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

Level 1 — Quoted prices in active markets for identical assets or liabilities.

Level 2 — Observable inputs, other than Level 1 prices, such as quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets and liabilities in markets that are inactive, or other inputs that are observable or can be corroborated by observable market data.

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, including certain pricing models, discounted cash flow methodologies and similar techniques.

The following is a summary of marketable securities held at September 30, 2012 and December 31, 2011 (in thousands):

			Gross Unrealized							Classification on Balance Sheet
As of September 30, 2012	Cost		Gains		Losses			Aggregate Fair Value		Short-term Marketable Securities		Long-term Marketable Securities
Available-for-sale securities:
Certificates of deposit	$	98	$	—	$	—		$	98	$	54	$	44
Commercial paper	9,975		2		—			9,977		9,977		—
Corporate debt securities	682,983		1,769		(167		)	684,585		272,548		412,037
U.S. government agency obligations	180,883		143		(2		)	181,024		—		181,024
	$	873,939	$	1,914	$	(169	)	$	875,684	$	282,579	$	593,105
			Gross Unrealized							Classification on Balance Sheet
As of December 31, 2011	Cost		Gains		Losses			Aggregate Fair Value		Short-term Marketable Securities		Long-term Marketable Securities
Available-for-sale securities:
Certificates of deposit	$	42	$	—	$	—		$	42	$	—	$	42
Corporate debt securities	524,515		873		(580		)	524,808		285,012		239,796
U.S. government agency obligations	145,995		78		(165		)	145,908		5,017		140,891
	$	670,552	$	951	$	(745	)	$	670,758	$	290,029	$	380,729

Unrealized gains and unrealized temporary losses on investments classified as available-for-sale are included within accumulated other comprehensive income (loss). Upon realization, those amounts are reclassified from accumulated other comprehensive income (loss) to gain (loss) on investments, net in the statement of operations. Realized gains and losses are reflected in the income statement as gain (loss) on investments, net. As of September 30, 2012, the Company did not hold any investment-related assets that have been in a continuous loss position for more than 12 months.

The following tables detail the fair value measurements within the fair value hierarchy of the Company’s financial assets, including investments and cash equivalents, at September 30, 2012 and December 31, 2011 (in thousands):

			Fair Value Measurements at Reporting
	Total Fair Value at		Date Using
	September 30, 2012		Level 1		Level 2		Level 3
Money market funds	$	5,685	$	5,685	$	—	$	—
Certificates of deposit	4,577		4,577		—		—
Commercial paper	9,977		—		9,977		—
Corporate debt securities	684,585		—		684,585		—
U.S. government agency obligations	181,024		—		181,024		—
	$	885,848	$	10,262	$	875,586	$	—
			Fair Value Measurements at Reporting
	Total Fair Value at		Date Using
	December 31, 2011		Level 1		Level 2		Level 3
Money market funds	$	302,507	$	302,507	$	—	$	—
Certificates of deposit	42		42		—		—
Commercial paper	57,498		—		57,498		—
Corporate debt securities	524,808		—		524,808		—
U.S. government agency obligations	145,908		—		145,908		—
	$	1,030,763	$	302,549	$	728,214	$	—

As of September 30, 2012 and December 31, 2011, the Company had grouped money market funds and certificates of deposit using a Level 1 valuation because market prices for such investments are readily available in active markets. As of September 30, 2012 and December 31, 2011, the Company had grouped commercial paper, U.S. government agency obligations and corporate debt securities using a Level 2 valuation because quoted prices for identical or similar assets are available in markets that are inactive. As of September 30, 2012 and December 31, 2011, the Company had no assets grouped using a Level 3 valuation.

Contractual maturities of the Company’s marketable securities held at September 30, 2012 and December 31, 2011 were as follows (in thousands):

	September 30, 2012		December 31, 2011
Available-for-sale securities:
Due in 1 year or less	$	282,579	$	290,029
Due after 1 year through 5 years	593,105		380,729
	$	875,684	$	670,758