Fair Value Measurement

9 Months Ended

Sep. 30, 2017

Fair Value Measurement

The following tables summarize significant assets and liabilities measured at fair value in the condensed consolidated balance sheets on a recurring basis for each of the fair value levels (in thousands):



	Fair Value Measurement at Reporting Date Using
September 30, 2017	Level 1		Level 2		Level 3		Total
Cash equivalents
Money market funds	$	22,896	$	—	$	—	$	22,896
Total assets	$	22,896	$	—	$	—	$	22,896



December 31, 2016
Cash equivalents
Money market funds	$	10,057	$	—	$	—	$	10,057
Total assets	$	10,057	$	—	$	—	$	10,057



September 30, 2016
Cash equivalents
Money market funds	$	12,041	$	—	$	—	$	12,041
Total assets	$	12,041	$	—	$	—	$	12,041

A reconciliation of cash equivalents to consolidated cash and cash equivalents is as follows



(in thousands)	September 30, 2017		December 31, 2016		September 30, 2016
Cash equivalents	$	22,896	$	10,057	$	12,041
Cash	162,620		179,269		138,184
Total cash and cash equivalents	$	185,516	$	189,326	$	150,225

Interest Rate Swaps

As of both September 30, 2017 and December 31, 2016, the fair value of the cash flow hedge that we entered into in January 2016 was $0.8 million and was included in other current assets in the condensed consolidated balance sheets. As of September 30, 2016, the fair value of the cash flow hedge was $1.3 million and was included in accrued expenses and other current liabilities in the condensed consolidated balance sheets.

The unrealized gains and losses, net of taxes, on the effective portion reported as a component of accumulated other comprehensive income (loss) and the interest expense reclassified from accumulated other comprehensive income (loss) were both immaterial during the three and nine months ended September 30, 2017 and 2016. During the three and nine months ended September 30, 2017 and 2016, there was no ineffective portion. We estimate an immaterial amount to be reclassified from accumulated other comprehensive income (loss) into pre-tax earnings within the next twelve months.

As of September 30, 2016, the fair value of the interest rate swap that was terminated in December 2016 was $1.1 million and was included in other current assets on the condensed consolidated balance sheets. During the three and nine months ended September 30, 2016, we recorded net losses of $0.6 million and net gains of $1.0 million, respectively, that were included in other income, net on our condensed consolidated statements of operations.

Other Assets and Liabilities

The carrying values and estimated fair values of our financial instruments that are not required to be recorded at fair value in the condensed consolidated balance sheets were as follows:



		September 30, 2017				December 31, 2016				September 30, 2016
(in thousands)	Fair Value Hierarchy	Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value
Assets:
Held-to-maturity marketable securities	Level 1	$	117,805	$	117,349	$	127,779	$	127,365	$	107,771	$	107,770
Liabilities (including current maturities):
2019 Notes¹	Level 3	$	120,000	$	124,792	$	120,000	$	124,654	$	160,000	$	169,094
Credit Agreement - term loan¹	Level 3	91,250		91,078		95,000		93,991		96,250		96,151
Credit Agreement - revolving credit facility¹	Level 3	30,000		30,018		30,000		29,452		—		—

¹See Note 10 for definitions of 2019 Notes and Credit Agreement.

During the three and nine months ended September 30, 2017 and 2016, we did not record any fair value adjustments related to nonfinancial assets and liabilities measured at fair value on a nonrecurring basis.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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