Fair value of financial instruments

3 Months Ended

Mar. 31, 2013

Fair value of financial instruments

Fair value of financial instruments

3. Fair value of financial instruments

The tables below present information about the Company’s assets that are measured at fair value on a recurring basis as of March 31, 2013 and December 31, 2012 and indicate the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value, which is described further within Note 2, Significant Accounting Policies.

The Company’s financial assets have been initially valued at the transaction price and subsequently valued at the end of each reporting period, typically utilizing third-party pricing services or other market observable data. The pricing services utilize industry standard valuation models, including both income and market based approaches, and observable market inputs to determine value. These observable market inputs include 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 provided by its third-party pricing services by reviewing their pricing methods and matrices, obtaining market values from other pricing sources, analyzing pricing data in certain instances and confirming that the relevant markets are active. The Company did not adjust or override any fair value measurements provided by its pricing services as of March 31, 2013 or December 31, 2012.

The Company reviews investments for other-than-temporary impairment whenever the fair value of an investment is less than the amortized cost and evidence indicates that an investment’s carrying amount is not recoverable within a reasonable period of time. To determine whether an impairment is other-than-temporary, the Company considers the intent to sell, or whether it is more likely than not that the Company will be required to sell, the investment before recovery of the investment’s amortized cost basis. Evidence considered in this assessment includes reasons for the impairment, compliance with the Company’s investment policy, the severity and the duration of the impairment and changes in value subsequent to year end. As of March 31, 2013 and December 31, 2012, there were no investments with a fair value that was materially lower than the amortized cost basis or any investments that had been in an unrealized loss position for 12 months or more.

There have been no transfers of assets between the fair value measurement classifications.

The following tables set forth the Company’s financial assets that were recorded at fair value at March 31, 2013 and December 31, 2012 (in thousands):

Description	Balance as of March 31, 2013		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
Assets:
Cash and cash equivalents	$	43,188	$	43,188	$	—	$	—
Marketable securities:
Corporate debt securities	16,515		—		16,515		—
Total	$	59,703	$	43,188	$	16,515	$	—

Description	Balance as of December 31, 2012		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
Assets:
Cash and cash equivalents	$	14,776	$	14,776	$	—	$	—
Marketable securities:
Corporate debt securities	16,615		—		16,615		—
Total	$	31,391	$	14,776	$	16,615	$	—