FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2011

FAIR VALUE MEASUREMENTS

NOTE 6 – FAIR VALUE MEASUREMENTS

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. In addition to defining fair value, the authoritative accounting guidance expands disclosures about fair value measurements and establishes a hierarchy for valuation inputs that emphasizes the use of observable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The fair value hierarchy established by this topic is broken down as follows:

• Level 1—inputs are based upon quoted prices for identical instruments traded in active markets.

• Level 2—inputs are based upon quoted prices for similar instruments in active markets, quoted prices for similar or identical instruments in inactive markets and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets and liabilities.

• Level 3—inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models and similar valuation techniques.

The following tables summarize our available-for-sale securities measured at fair value:

	September 30, 2011		Level 1		Level 2		Level 3
	(Unaudited) (In thousands)
Mutual funds(1)	$	1,831	$	—	$	1,831	$	—
Commercial paper		158,924		—		158,924		—
U.S. Government and agency securities(2)		25,900		25,900		—		—
Asset-backed securities and collateralized mortgage obligations(3)		14,291		—		7,888		6,403
Total	$	200,946	$	25,900	$	168,643	$	6,403

	December 31, 2010		Level 1		Level 2		Level 3
	(In thousands)
Mutual funds	$	2,007	$	—	$	2,007	$	—
U.S. Government and agency securities		269,161		269,161		—		—
Asset-backed securities and collateralized mortgage obligations		9,869		—		2,497		7,372
Corporate notes and bonds		4,168		—		4,168		—
Total	$	285,205	$	269,161	$	8,672	$	7,372

⁽¹⁾  Various U.S. equities and other investments managed under mutual funds.

⁽²⁾  Investments in U.S. Treasury securities with maturities of two years or less.

⁽³⁾ Asset-backed and mortgage-backed securities with maturities of up to 26 years.

Our Level 2 investments consist primarily of commercial paper, mutual funds and asset-backed commercial paper notes backed by a pool of mortgage-backed securities. The fair value of our Level 2 investments was determined using a market approach which is based on quoted prices and other information for similar or identical instruments.

Our Level 3 investment consists of asset-backed commercial paper notes backed by a pool of mortgage-backed securities. The fair value of this Level 3 investment was based on the calculation of an overall weighted-average valuation, using the prices of the underlying individual securities. Individual securities in the pool were valued based on market observed prices, where available. If market prices were not available, prices of similar securities backed by similar assets were used.

Changes in Level 3 Instrument

The following is a summary of the changes in our Level 3 instrument measured on a recurring basis for the three-month and nine-month periods ended September 30, 2011 and 2010:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
	(Unaudited) (In thousands)
Balance at beginning of period	$	7,072		$	7,487		$	7,372		$	7,326
Total realized and unrealized gains (losses)		(318	)		212			147			1,489
Purchases, issuances and settlements		—			283			—			172
Principal repayments		(351	)		(549	)		(1,116	)		(1,554	)
Balance at end of period	$	6,403		$	7,433		$	6,403		$	7,433

Other Financial Instruments

The estimated fair values of our other financial instruments are as follows:

	September 30, 2011						December 31, 2010
	Carrying Amount			Fair Value			Carrying Amount		Fair Value
	(Unaudited)
	(In thousands)
Balance Sheet Instruments
Cash and cash equivalents	$	403,589		$	403,589		$	403,463	$	403,463
Debt	$	89,093		$	90,475		$	55,295	$	56,180
Forward contracts, net	$	(8,292	)	$	(8,292	)	$	1,352	$	1,352

We used the following methods and assumptions in estimating our fair value disclosures for our other financial instruments:

Cash and cash equivalents. The carrying amounts that we have reported in the accompanying unaudited condensed consolidated balance sheets for cash and cash equivalents approximate their fair values and are generally considered Level 1 in nature.

Current and long-term restricted cash and cash equivalents. The carrying amounts that we have reported in the accompanying unaudited condensed consolidated balance sheets for restricted cash and cash equivalents approximate their fair values are generally considered Level 1 in nature.

Short-term and long-term debt. We base the fair values of debt instruments on quoted market prices. Where quoted prices are not available, we base the fair values on the present value of future cash flows discounted at estimated borrowing rates for similar debt instruments or on estimated prices based on current yields for debt issues of similar quality and terms.

Forward contracts. The fair value of forward contracts is determined using observable financial market inputs, such as quoted market prices.