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Financial Instruments
9 Months Ended
Sep. 30, 2014
Fair Value Disclosures [Abstract]  
Financial Instruments
Financial Instruments
Assets and Liabilities Measured at Fair Value on a Recurring Basis. The following table presents information about our financial assets and liabilities that are measured at fair value on a recurring basis, and indicates the fair value hierarchy of the valuation techniques we utilize to determine such fair value at September 30, 2014 and December 31, 2013.
 
Fair Value as of September 30, 2014
(in thousands)
Level 1
 
Level 2
 
Level 3
 
Total
Assets:
 
 
 
 
 
 
 
Corporate debt securities
$

 
$
9,022

 
$

 
$
9,022

Liabilities:
 
 
 
 
 
 
 
Acquisition related contingent consideration
$

 
$

 
$
220

 
$
220

 
 
 
 
 
 
 
 
 
Fair Value as of December 31, 2013
(in thousands)
Level 1
 
Level 2
 
Level 3
 
Total
Assets:
 
 
 
 
 
 
 
Corporate debt securities
$

 
$
7,673

 
$

 
$
7,673

 
 
 
 
 
 
 
 

The fair value of our corporate debt securities is determined using proprietary valuation models and analytical tools. These valuation models and analytical tools use market pricing or prices for similar instruments that are both objective and publicly available, including matrix pricing or reported trades, benchmark yields, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids and/or offers. We did not reclassify any investments between levels in the fair value hierarchy during the nine months ended September 30, 2014.
The acquisition related contingent consideration is related to our acquisition of Telerhythmics on March 13, 2014.  We will reassess the fair value of the contingent consideration to be settled in cash related to our acquisition of Telerhythmics on a quarterly basis using the income approach, which is a Level 3 measurement. There was no change to the fair value of the acquisition related contingent consideration during the nine months ended September 30, 2014. Significant assumptions used in the measurement include probabilities of achieving the EBITDA milestones.
Securities Available for Sale
Securities available-for-sale primarily consist of investment grade corporate debt securities. We classify all securities as available-for-sale and as current assets, as the sale of such securities may be required prior to maturity to execute management strategies. These securities are carried at fair value, with the unrealized gains and losses reported as a component of accumulated other comprehensive income (loss) in stockholders' equity until realized. Realized gains and losses from the sale of available-for-sale securities, if any, are determined on a specific identification basis. A decline in the market value of any available-for-sale security below cost that is determined to be other than temporary will result in an impairment charge to earnings and a new cost basis for the security is established. No such impairment charges were recorded for any period presented. It is not more likely than not that we will be required to sell investments before recovery of their amortized costs. Premiums and discounts are amortized or accreted over the life of the related security as an adjustment to yield using the straight-line method and included in interest income. Interest income is recognized when earned. Realized gains and losses on investments in securities are included in other income (expense) within the condensed consolidated statements of comprehensive income (loss). The realized gains and losses on these sales were minimal for the three and nine months ended September 30, 2014 and 2013.
The following table sets forth the composition of securities available-for-sale as of September 30, 2014 and December 31, 2013.
 
Maturity in
Years
 
Amortized Cost
 
Unrealized
 
Fair Value
As of September 30, 2014 (in thousands)
Gains
 
Losses
 
Corporate debt securities
3 or less
 
$
9,043

 
$
2

 
$
(23
)
 
$
9,022

 
 
 
 
 
 
 
 
 
 
 
Maturity in
Years
 
Amortized Cost
 
Unrealized
 
Fair Value
As of December 31, 2013 (in thousands)
Gains
 
Losses
 
Corporate debt securities
3 or less
 
$
7,675

 
$

 
$
(2
)
 
$
7,673