FAIR VALUE MEASUREMENTS

3 Months Ended

Mar. 31, 2016

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

6. FAIR VALUE MEASUREMENTS

In accordance with the provisions of fair value accounting, a fair value measurement assumes that a transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability and defines fair value based upon an exit price model.

The fair value measurement guidance establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The guidance describes three levels of inputs that may be used to measure fair value:

Level 1	Quoted prices in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset and liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 assets and liabilities include money market funds, debt and equity securities and derivative contracts that are traded in an active exchange market.
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. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments and derivative contracts whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. This category generally includes corporate obligations and non-exchange traded derivative contracts.
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. Level 3 assets and liabilities include financial instruments and intangible assets that have been impaired whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

Assets and liabilities of the Company measured at fair value on a recurring basis as of March 31, 2016 and December 31, 2015 are summarized as follows (in thousands):

	March 31, 2016
			Significant Other
	Quoted Prices in		Observable
	Active Markets		Inputs
Description	(Level 1)		(Level 2)		Total
Certificates of deposit	$	—	$	377	$	377
Money market funds	$	34,357	$	—	$	34,357
Total assets measured at fair value	$	34,357	$	377	$	34,734

	December 31, 2015
			Significant Other
	Quoted Prices in		Observable
	Active Markets		Inputs
Description	(Level 1)		(Level 2)		Total
Certificates of deposit	$	—	$	377	$	377
Money market funds	$	76,263	$	—	$	76,263
Total assets measured at fair value	$	76,263	$	377	$	76,640

Certificate of Deposit

As of March 31, 2016 and December 31, 2015, this asset class consisted of a time deposit at a financial institution denominated in U.S. dollars. The asset class is classified within Level 2 of the fair value hierarchy because the fair value was based on observable market data.

Money Market Funds

As of March 31, 2016 and December 31, 2015, this asset class consisted of a money market portfolio that comprises Federal government and U.S. Treasury securities. The asset class is classified within Level 1 of the fair value hierarchy because its underlying investments are valued using quoted market prices in active markets for identical assets.

Other Fair Value Disclosures

The carrying amounts of cash and cash equivalents, accounts receivable, and accounts payable and accrued expenses approximate their fair values because of the relatively short-term maturities of these financial instruments. 

The fair value of marketable securities is estimated using Level 2 inputs.  At March 31, 2016, the fair value of marketable securities was equal to its carrying amount of $2.0 million and is included in other assets on the condensed consolidated balance sheet.

The fair value oflong-term debt is estimated using Level 2 inputs.  At March 31, 2016, the fair value, in thousands, of long-term debt, including the current portion, was equal to its carrying amount of $31,324.  At December 31, 2015, the fair value of the long-term debt, including the current portion, was equal to its carrying amount of $32,859.