Marketable Securities and Fair Value Measurements

Our short-term and long-term marketable securities as of September 30, 2012 and December 31, 2011 are as follows (in thousands):

Short-term



September 30, 2012	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Commercial paper	$	5,197	$	1	$	—		$	5,198
Corporate bonds	15,741		12		(4		)	15,749
Foreign bonds	2,190		5		—			2,195
Total	$	23,128	$	18	$	(4	)	$	23,142

Long-term



September 30, 2012	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Corporate bonds	$	16,758	$	24	$	(1	)	$	16,781
Foreign bonds	4,012		10		(1		)	4,021
Total	$	20,770	$	34	$	(2	)	$	20,802

Short-term



December 31, 2011	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Corporate bonds	$	4,135	$	—	$	(1	)	$	4,134
Foreign bonds	1,248		—		(5		)	1,243
Agency bonds	2,015		3		—			2,018
Total	$	7,398	$	3	$	(6	)	$	7,395

For the three and nine months ended September 30, 2012 and 2011, no significant gains or losses were realized on the sale of marketable securities. We had no long-term investments as of December 31, 2011.

Fair Value Measurements

We measure the fair value of our cash equivalents and marketable securities as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We use the GAAP fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs that may be used to measure fair value:

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

Our Level 1 assets consist of money market funds. We did not hold any Level 1 liabilities as of September 30, 2012.

Level 2—Observable inputs other than quoted prices included in Level 1, 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; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.

Our Level 2 assets consist of commercial paper, corporate bonds, foreign bonds, agency bonds, and our Israeli severance funds that are mainly invested in insurance policies. We obtain these fair values for level 2 investments from our asset manager for each of our portfolios. Our custody bank and asset managers independently use professional pricing services to gather pricing data which may include quoted market prices for identical or comparable financial instruments, or inputs other than quoted prices that are observable either directly or indirectly, and we are ultimately responsible for these underlying estimates.

We did not hold any Level 2 liabilities as of September 30, 2012.

Level 3—Unobservable inputs to the valuation methodology that are supported by little or no market activity and that are significant to the measurement of the fair value of the assets or liabilities. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques, as well as significant management judgment or estimation.

We did not hold any Level 3 assets or liabilities as of September 30, 2012.

The following table summarizes our financial assets measured at fair value on a recurring basis as of September 30, 2012 (in thousands):



Description	Balance as of September 30, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
Cash equivalents:
Money market funds	$	119,787	$	119,787	$	—
Commercial paper	2,550		—		2,550
Short-term investments:
Commercial paper	5,198		—		5,198
Corporate bonds	15,749		—		15,749
Foreign bonds	2,195		—		2,195
Long-term investments:
Corporate bonds	16,781		—		16,781
Foreign bonds	4,021		—		4,021
Other assets:
Israeli severance funds	1,933		—		1,933
	$	168,214	$	119,787	$	48,427

The following table summarizes our financial assets measured at fair value on a recurring basis as of December 31, 2011 (in thousands):



Description	Balance as of December 31, 2011		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
Cash equivalents:
Money market funds	$	86,897	$	86,897	$	—
Short-term investments:
Corporate bonds	4,134		—		4,134
Foreign bonds	1,243		—		1,243
Agency bonds	2,018		—		2,018
Other assets:
Israeli severance funds	1,859		—		1,859
	$	96,151	$	86,897	$	9,254