FINANCIAL INSTRUMENTS

Marketable Securities

At September 30, 2018, current available-for-sale marketable debt securities are as follows:



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(In thousands)
Treasury discount notes	$	34,867	$	—	$	(2	)	$	34,865
Total available-for-sale marketable debt securities	$	34,867	$	—	$	(2	)	$	34,865

The Company did not hold any available-for-sale marketable debt securities prior to the third quarter of 2018.

The contractual maturities of debt securities classified as current available-for-sale at September 30, 2018 are within one year. There are no investments in available-for-sale marketable debt securities that have been in a continuous unrealized loss position for longer than twelve months as of September 30, 2018.

The specific-identification method is used to determine the cost of available-for-sale marketable debt securities sold and the amount of unrealized gains and losses reclassified out of accumulated other comprehensive income (loss) into earnings. There were no proceeds from maturities and sales of available-for-sale marketable debt securities or gross realized gains or losses from the maturities and sales of available-for-sale marketable debt securities for the three months ended September 30, 2018.

Fair Value Measurements

The Company categorizes its financial instruments 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 obtained from independent sources, such as quoted market prices for identical assets and liabilities in active markets.

•

Level 2: Other inputs, which are observable directly or indirectly, such as quoted market prices for similar assets or liabilities in active markets, quoted market 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 financial assets are primarily obtained from observable market prices for identical underlying securities that may not be actively traded. Certain of these securities may have different market prices from multiple market data sources, in which case an average market price is used.


•	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 assets or liabilities.

The following tables present the Company’s financial instruments that are measured at fair value on a recurring basis:



	September 30, 2018
	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
	(In thousands)
Assets:
Cash equivalents:
Money market funds	$	158,648	$	—	$	—	$	158,648
Commercial paper	—		48,048		—		48,048
Treasury discount notes	—		44,960		—		44,960
Time deposits	—		15,000		—		15,000
Marketable securities:
Treasury discount notes	—		34,865		—		34,865
Total	$	158,648	$	142,873	$	—	$	301,521



	December 31, 2017
	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
	(In thousands)
Assets:
Cash equivalents:
Money market funds	$	189,207	$	—	$	—	$	189,207
Treasury discount notes	—		500		—		500
Certificates of deposit	—		6,195		—		6,195
Total	$	189,207	$	6,695	$	—	$	195,902

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 adjusted to fair value only when an impairment charge is recognized. Such fair value measurements are based predominantly on Level 3 inputs.

Financial instruments measured at fair value only for disclosure purposes

The following table presents the carrying value and the fair value of financial instruments measured at fair value only for disclosure purposes:



	September 30, 2018						December 31, 2017
	Carrying value			Fair value			Carrying value			Fair value
	(In thousands)
Current portion of long term debt	$	(13,750	)	$	(13,664	)	$	(13,750	)	$	(13,802	)
Long-term debt, net ^(a)	(248,455		)	(249,369		)	(258,312		)	(262,230		)
Current portion of long-term debt—related party	—			—			(816		)	(837		)
Long-term debt—related party, net	(1,048		)	(1,155		)	(1,997		)	(2,048		)

_________________


^(a)	At September 30, 2018 and December 31, 2017, the carrying value of long-term debt, net includes unamortized debt issuance costs of $2.5 million and $2.9 million, respectively.

The fair value of long-term debt, including the current portion, is estimated using observable market prices or indices for similar liabilities, which are Level 2 inputs. The fair value of long-term debt—related party, including the current portion, is based on Level 3 inputs and is estimated by discounting the future cash flows based on current market conditions.