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Fair Value Measurements and Investments
9 Months Ended
Sep. 30, 2016
Fair Value Disclosures [Abstract]  
Fair Value Measurements and Investments

4. Fair Value Measurements and Investments

The Company records its financial assets and liabilities at fair value. The accounting guidance for fair value provides a framework for measuring fair value, clarifies the definition of fair value, and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows:

 

Level I: Inputs which include unadjusted quoted prices in active markets for identical assets or liabilities.

 

Level II: Inputs other than Level I that are observable, either directly or indirectly, such as unadjusted quoted prices for similar assets or liabilities; unadjusted quoted prices 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 assets or liabilities.

 

Level III: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The carrying amounts of the Company’s financial instruments, including restricted cash, accounts receivable, accounts payable and accrued liabilities approximate fair value due to their relatively short maturities. The Company’s financial instruments consist of Level I and II assets. Level I assets consist primarily of highly liquid money market funds, some of which are included in restricted cash. The Company’s Level II assets consist of U.S. government bonds that are included in short-term and long-term investments.

The following tables set forth the fair value of the Company’s financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used in such measurements (in thousands):

 

 

 

September 30, 2016

 

 

 

Level I

 

 

Level II

 

 

Level III

 

 

Total

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

57,684

 

 

$

 

 

$

 

 

$

57,684

 

Restricted cash (money market funds)

 

 

917

 

 

 

 

 

 

 

 

 

917

 

U.S. Government bonds

 

 

 

 

 

120,732

 

 

 

 

 

 

120,732

 

Total

 

$

58,601

 

 

$

120,732

 

 

$

 

 

$

179,333

 

 

 

 

December 31, 2015

 

 

 

Level I

 

 

Level II

 

 

Level III

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

44,714

 

 

$

 

 

$

 

 

$

44,714

 

Restricted cash (money market funds)

 

 

917

 

 

 

 

 

 

 

 

 

917

 

U.S. Government bonds

 

 

 

 

 

140,392

 

 

 

 

 

 

 

140,392

 

Total

 

$

45,631

 

 

$

140,392

 

 

$

 

 

$

186,023

 

 

 

The following tables set forth the gross unrealized gains and losses on the Company’s investments (in thousands):

 

 

 

September 30, 2016

 

 

 

Amortized Cost

 

 

Gross Unrealized Holding Gains

 

 

Gross Unrealized Holding Losses

 

 

Aggregate Fair Value

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government bonds

 

$

120,684

 

 

$

48

 

 

$

 

 

$

120,732

 

Total securities

 

$

120,684

 

 

$

48

 

 

$

 

 

$

120,732

 

 

 

 

December 31, 2015

 

 

 

Amortized Cost

 

 

Gross Unrealized Holding Gains

 

 

Gross Unrealized Holding Losses

 

 

Aggregate Fair Value

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government bonds

 

$

126,965

 

 

$

 

 

$

(76

)

 

$

126,889

 

Total securities

 

$

126,965

 

 

$

 

 

$

(76

)

 

$

126,889

 

 

 

The following tables set forth the contractual maturities of securities classified as available-for-sale (in thousands):

 

 

 

September 30, 2016

 

Due within one year

 

$

118,707

 

Due after one year

 

 

2,025

 

Total

 

$

120,732

 

 

 

 

December 31, 2015

 

Due within one year

 

$

126,889

 

Total

 

$

126,889