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FAIR VALUE
12 Months Ended
Mar. 31, 2013
FAIR VALUE  
FAIR VALUE

5. FAIR VALUE

        The following table presents information about the Company's assets and liabilities that are measured at fair value on a recurring basis and indicates the fair value hierarchy and the valuation techniques the Company utilized to determine such fair value:

(In thousands)
  March 31,
2013
  Level 1   Level 2   Level 3  

Assets:

                         

Cash equivalents

  $ 1,201   $ 1,201   $   $  

U.S. government and agency debt securities

    162,151     75,025     87,126      

International government agency debt securities

    13,156         13,156      

Corporate debt securities

    29,510         29,510      
                   

Total

  $ 206,018   $ 76,226   $ 129,792   $  
                   

Liabilities:

                         

Interest rate swap contract

  $ (541 )       (541 )    
                   

Total

  $ (541 ) $   $ (541 ) $  
                   


 

 
  March 31,
2012
  Level 1   Level 2   Level 3  

Assets:

                         

Cash equivalents

  $ 1,201   $ 1,201   $   $  

U.S. government and agency debt securities

    98,398     98,398          

International government agency debt securities

    35,903     30,902         5,001  

Corporate debt securities

    19,700         14,045     5,655  

Strategic equity investments

    1,482     1,482          

Interest rate cap contracts

    20         20      
                   

 

  $ 156,704   $ 131,983   $ 14,065   $ 10,656  
                   

Liabilities:

                         

Interest rate swap contract

  $ (522 )       (522 )    
                   

Total

  $ (522 ) $   $ (522 ) $  
                   

        The following table is a rollforward of the fair value of the Company's investments whose fair value was determined using Level 3 inputs at March 31, 2013:

(In thousands)
  Fair Value  

Balance, April 1, 2012

  $ 10,656  

Investments transferred into Level 3

    1,579  

Investments transferred out of Level 3

    (12,247 )

Total unrealized gains included in comprehensive loss

    12  
       

Balance, March 31, 2013

  $  
       

        The Company transfers its financial assets and liabilities measured at fair value on a recurring basis between fair value hierarchies at the end of each reporting period. During the year ended March 31, 2013, the Company transferred $87.1 million of its investments in U.S. government agency debt securities and $3.1 million of its investments in international government agency debt securities from Level 1 to Level 2 as the Company had limited visibility into their trading volumes. There were no transfers of any securities from Level 2 to Level 1 during the year ended March 31, 2013. Also, during the year ended March 31, 2013, there were two securities transferred from Level 3 to Level 2 as trading resumed for these securities.

        A third-party pricing service was used to determine the estimated fair value of the Company's securities. The third-party pricing service develops its estimate of fair value through a proprietary model using variables including reportable trades and last trade date, bids and offers, trading frequency, benchmark yields, credit spreads and other industry and economic events. The Company validates the prices provided by its third-party pricing service by reviewing their pricing methods and matrices, obtaining market values from other pricing sources, analyzing pricing data in certain instances and confirming the activity in the relevant markets. After completing its validation procedures, the Company did not adjust or override any fair value measurements provided by its pricing services at March 31, 2013.

        The Company's investments in US government and agency debt securities, international government agency debt securities and corporate debt securities classified as Level 2 were initially valued at the transaction price and subsequently valued, at the end of each reporting period, utilizing market observable data. The market observable data includes reportable trades, benchmark yields, credit spreads, broker/dealer quotes, bids, offers, current spot rates and other industry and economic events. The Company validates the prices developed using the market observable data by obtaining market values from other pricing sources, analyzing pricing data in certain instances and confirming that the relevant markets are active.

        In September and December 2011, the Company entered into interest rate cap agreements, and, in September 2011, the Company entered into an interest rate swap agreement. These agreements are described in greater detail in Note 12, Derivative Instruments. The fair value of the Company's interest rate cap and interest rate swap agreements were based on an income approach, which excludes accrued interest, and takes into consideration then-current interest rates and then-current creditworthiness of the Company or the counterparty, as applicable.

        The carrying amounts reflected in the consolidated balance sheets for cash and cash equivalents, accounts receivable, other current assets, accounts payable and accrued expenses approximate fair value due to their short-term nature. The fair value of the remaining financial instruments not currently recognized at fair value on the Company's consolidated balance sheets consist of the $300.0 million, seven-year term loan bearing interest at LIBOR plus 2.75% with a LIBOR floor of 0.75% ("Term Loan B-1") and the $75.0 million, four-year term loan bearing interest at LIBOR plus 2.75%, with no LIBOR floor ("Term Loan B-2" and together with Term Loan B-1, the "2013 Term Loans"). The estimated fair value of these term loans, which was based on quoted market price indications (Level 2 in the fair value hierarchy) and may not be representative of actual values that could have been or will be realized in the future at March 31, 2013, was as follows:

(In thousands)
  Carrying
Value
  Estimated
Fair Value
 

Term Loan B-1

  $ 296,029   $ 298,375  

Term Loan B-2

  $ 72,979   $ 73,308