Fair Value Of Financial Instruments

12 Months Ended

Dec. 31, 2011

Fair Value Of Financial Instruments [Abstract]

Fair Value Of Financial Instruments

Note 3—Fair Value of Financial Instruments

The Company categorizes its financial instruments into a three-level fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument.

Financial assets recorded at fair value on the Company's consolidated balance sheets are categorized as follows:

Level 1: Unadjusted quoted prices for identical assets in an active market.

Level 2: Quoted prices in markets that are not active or inputs that are observable either directly or indirectly for substantially the full-term of the asset. Level 2 inputs include the following:

• quoted prices for similar assets in active markets,

• quoted prices for identical or similar assets in non-active markets,

• inputs other than quoted market prices that are observable, and

• inputs that are derived principally from or corroborated by observable market data through correlation or other means.

Level 3: Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. They reflect management's own assumptions about the assumptions a market participant would use in pricing the asset.

The following table presents the Company's cash and cash equivalents and investments including the hierarchy for its financial instruments measured at fair value on a recurring basis at December 31, 2011 and 2010:

December 31, 2011	Carrying Amount		Estimated Fair Value		Assets and Liabilities Measured at Fair Value		Level 1		Level 2		Level 3
	(In thousands)
Assets:
Cash and cash equivalents:
Cash	$	8,680	$	8,680	$	8,680	$	8,680	$	—	$	—
Money market funds		105,414		105,414		105,414		105,414		—		—
Total cash and cash equivalents		114,094		114,094		114,094		114,094		—		—
Short-term investments:
Certificates of deposit		55,694		55,694		—		55,694		—		—
Total short-term investments		55,694		55,694		—		55,694		—		—
Total cash and cash equivalents and short-term investments		169,788		169,788		114,094		169,788		—		—
Restricted cash:
Certificates of deposit		2,580		2,580		—		2,580		—		—
Total restricted cash		2,580		2,580		—		2,580		—		—
Total	$	172,368	$	172,368	$	114,094	$	172,368	$	—	$	—

December 31, 2010	Carrying Amount		Estimated Fair Value		Assets and Liabilities Measured at Fair Value		Level 1		Level 2		Level 3
	(In thousands)
Assets:
Cash and cash equivalents:
Cash	$	6,824	$	6,824	$	6,824	$	6,824	$	—	$	—
Money market funds		37,967		37,967		37,967		37,967		—		—
Total cash and cash equivalents		44,791		44,791		44,791		44,791		—		—
Short-term investments (available-for-sale):
Equity securities		—		1		1		—		1		—
Short-term investments:
Certificates of deposit		20,069		19,992		—		—		—		—
Total short-term investments		20,069		19,993		1		—		1		—
Total cash and cash equivalents and short-term investments		64,860		64,784		44,792		44,791		1		—
Restricted cash:
Certificates of deposit		1,280		1,280		—		—		—		—
Total restricted cash		1,280		1,280		—		—		—		—
Total	$	66,140	$	66,064	$	44,792	$	44,791	$	1	$	—

Level 3 Valuation

Financial assets or liabilities are considered Level 3 when their fair values are determined using discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

On April 8, 2009, the Company raised $31.0 million from a registered direct offering. The investors also received warrants to purchase up to 5,038,237 shares of the Company's common stock at an initial exercise price of $10.46 per share.

The Company's warrant liability was marked-to-market each reporting period with the change in fair value recorded as a gain or loss within other income (expense), net on the Company's consolidated statement of operations until the warrants were exercised, expire or other facts and circumstances led the warrant liability to be reclassified as an equity instrument. The fair value of the warrant liability was determined at each reporting period by utilizing a Monte Carlo simulation model. As of December 31, 2010, all of the warrants had been exercised and no warrants to purchase shares of the Company's common stock remained outstanding, accordingly, the Company's warrant liability had been completely converted into stockholders' equity as of December 31, 2010.

The Company did not carry any financial assets or liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during 2011. The following table provides a summary of the changes in fair value of the Company's warrant liability (financial liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during 2010:

Warrant Liability	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	(In thousands)
Balance, December 31, 2009	$	24,239
Mark-to-market of warrant liability		(2,127	)
Balance, March 31, 2010	$	22,112
Exercise of warrants		(1,866	)
Mark-to-market of warrant liability		(6,200	)
Balance, June 30, 2010	$	14,046
Exercise of warrants		(816	)
Mark-to-market of warrant liability		43,233
Balance, September 30, 2010	$	56,463
Exercise of warrants		(38,365	)
Mark-to-market of warrant liability at exercise dates		(18,098	)
Balance, December 31, 2010	$	—

The carrying amounts of accounts receivable, accounts payable and other current liabilities approximate fair value. At December 31, 2011, the Company's Senior Convertible Notes due 2018 had a carrying value of $175.5 million and a fair value of $116.4 million. The fair value of the Company's 2018 Convertible Notes is based upon the quoted market price at December 31, 2011.