Fair Value Measurements

3 Months Ended

Mar. 31, 2013

Fair Value Measurements

Fair Value Measurements

Note G — Fair Value Measurements

The Company holds certain assets that are required to be measured at fair value in accordance with GAAP. The Company determined fair value of these assets based on the following three levels of inputs:

Level 1	—	Quoted prices in active markets for identical assets or liabilities.
Level 2	—	Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Some of the Company’s marketable securities primarily utilize broker quotes in a non-active market for valuation of these securities.
Level 3	—	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, therefore requiring an entity to develop its own assumptions.

As of March 31, 2013, the Company held certain assets that are required to be measured at fair value on a recurring basis. Assets measured at fair value on a recurring basis are summarized below (in thousands):

	Fair Value Measurements as of March 31, 2013
	Total		Level 1		Level 2		Level 3
Marketable Securities
Bonds and bond funds	$	468,602	$	—	$	468,602	$	—
Asset backed securities	262		—		262		—
	468,864		—		468,864		—
Cash, Cash Equivalents and Restricted Cash	162,630		162,630		—		—
Other Assets	2,305		—		—		(a) 2,305
Total Assets Measured at Fair Value	$	633,799	$	162,630	$	468,864	$	2,305

	Fair Value Measurements as of December 31, 2012
	Total		Level 1		Level 2		Level 3
Marketable Securities
Bonds and bond funds	$	552,289	$	—	$	552,289	$	—
Commercial paper	3,514				3,514
Asset backed securities	314		—		314		—
	556,117		—		556,117		—
Cash, Cash Equivalents and Restricted Cash	153,325		153,325		—		—
Other Assets	3,844		—		—		(a) 3,844
Total Assets Measured at Fair Value	$	713,286	$	153,325	$	556,117	$	3,844

(a) Auction rate securities included in “Other assets” in the Company’s unaudited condensed consolidated balance sheets

Based on market conditions, the Company uses a discounted cash flow valuation methodology for auction rate securities. Accordingly, for purposes of the foregoing condensed consolidated financial statements, these securities were categorized as Level 3 securities. The Company’s “Marketable Securities” classified as Level 2 primarily utilize broker quotes in a non-active market for valuation of these securities.

The Company did not make any significant transfers of securities between Level 1, Level 2 and Level 3 during the three months ended March 31, 2013.  The Company’s policy regarding the recording of transfers between levels is to record any such transfers at the end of the reporting period.

The following table presents the Company’s assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at March 31, 2013 (in thousands):

Fair Value Measurements Using Significant Unobservable Inputs

(Level 3)

	Auction Rate Securities
Balance at January 1, 2013	$	3,844
Total realized and unrealized gains or (losses)
Included in earnings	—
Included in other comprehensive income	(11		)
Transferred out	—
Settlements	(1,528		)
Balance at March 31, 2013	$	2,305

The fair value of the Company’s long-term debt classified as Level 2 was estimated using discounted cash flow analyses, based on the Company’s current estimated incremental borrowing rates for similar types of borrowing arrangements. The fair value of the Company’s long-term debt is estimated based on current rates offered to the Company for similar debt and was estimated to be $1,712.5 million as of March 31, 2013, as compared to the carrying amount of $1,610.4 million as of March 31, 2013. The fair value of the Company’s long-term debt is estimated based on current rates offered to the Company for similar debt and approximated $1,744.2 million as of December 31, 2012, as compared to the carrying amount of $1,642.0 million as of December 31, 2012.