Fair Value Measurements

9 Months Ended

Sep. 30, 2014

The Company categorizes its assets measured at fair value into a fair value hierarchy that prioritizes the inputs used in pricing the asset or liability. The three levels of the fair value hierarchy are:


•	Level 1: Observable inputs such as quoted prices for identical assets and liabilities in active markets obtained from independent sources.

•

Level 2: Other inputs that are observable directly or indirectly, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs that are derived principally from or corroborated by observable market data. The fair values of the Company’s level 2 securities are primarily obtained from observable market prices for identical underlying securities that may not be actively traded.


•	Level 3: Unobservable inputs for which there is little or no market data and require the Company to develop its own assumptions, based on the best information available in the circumstances, about the assumptions market participants would use in pricing the asset or liability.

The Company has no liabilities that are measured at fair value on a recurring basis. The following tables present the Company’s assets that are measured at fair value on a recurring basis:



	September 30, 2014
(in thousands)	Quoted Market Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value Measurements
Short-term investments:
Fixed income mutual fund	$	2,492	$	—	$	—	$	2,492
U.S. government and agency securities	—		2,914		—		2,914
Corporate obligations	—		28,059		—		28,059
Other fixed income securities	—		437		—		437
International securities	—		12,894		—		12,894
Municipal obligations	—		547		—		547
Total	$	2,492	$	44,851	$	—	$	47,343



	December 31, 2013
(in thousands)	Quoted Market Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)		Total Fair Value Measurements
Short-term investments:
Fixed income mutual fund	$	2,485	$	—		$	—	$	2,485
U.S. government and agency securities	—		2,233			—		2,233
Corporate obligations	—		14,159		*	—		14,159
Other fixed income securities	—		361			—		361
International securities	—		3,048			—		3,048
Municipal obligations	—		1,477			—		1,477
Total	$	2,485	$	21,278		$	—	$	23,763

* Included in this amount is a corporate obligation of $4.5 million used to collateralize the Company's line of credit with Bank of America, and was included in the line item "Restricted cash and investments," a component of current assets, on the consolidated balance sheet as of December 31, 2013. Pursuant to an amendment to the loan agreement with Bank of America, effective May 19, 2014, the line of credit is no longer secured by cash or investment collateral. See Note 7, Credit Facilities, for further details.

Assets measured at fair value on a nonrecurring basis

The Company’s non-financial assets, such as goodwill, intangible assets and property and equipment, are not required to be measured at fair value on a recurring basis. The Company evaluates the recoverability of its indefinite-lived intangible asset and goodwill by performing impairment tests on an annual basis, as of October 1^st, or when events or changes in circumstances indicate that the carrying amounts may not be recoverable. Any resulting asset impairment requires that the asset be recorded at its fair value. The Company's valuation methods to determine fair value utilize significant Level 3 unobservable inputs, which include discount rates, long-term growth rates and royalty rates.

During the three months ended September 30, 2014, the Company performed an interim review of the indefinite-lived intangible asset and goodwill in our Merchandising segment associated with the Emeril Lagasse business. As a result, during the three and nine months ended September 30, 2014, the Company recorded an aggregate non-cash impairment charge of $11.4 million to write down the value of these assets to their fair value. See Note 6, Intangible Asset and Goodwill, for further information.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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