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FAIR VALUE MEASUREMENTS

3 Months Ended

Mar. 31, 2011

NOTE 7—FAIR VALUE MEASUREMENTS

The Company categorizes its assets and liabilities measured at fair value into a fair value hierarchy that prioritizes the inputs used in pricing the asset or liability. The three levels of the fair value hierarchy are:

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Level 1: Observable inputs obtained from independent sources, such as quoted prices for identical assets and liabilities in active markets.

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Level 2: Other inputs that are observable directly or indirectly, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs that are derived principally from or corroborated by observable market data. The fair value of the Company's level 2 financial assets is primarily obtained from observable market prices for identical underlying securities that may not be actively traded. Certain of these securities may have different market prices from multiple market data sources, in which case a weighted average market price is used.

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Level 3: Unobservable inputs for which there is little or no market data and require the Company to develop its own assumptions, based on the best information available in the circumstances, about the assumptions market participants would use in pricing the asset or liability. See below for a discussion of assets measured at fair value using level 3 inputs.

The following tables present the Company's assets and liabilities that are measured at fair value on a recurring basis:

		March 31, 2011

		Quoted Market Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value Measurements
		(In thousands)
Assets:
Cash equivalents:
	Treasury and government agency money market funds	$	386,478	$	—	$	—	$	386,478
	Commercial paper		—		289,088		—		289,088
	Time deposits		—		25,650		—		25,650
Marketable securities:
	Corporate debt securities		—		218,622		—		218,622
	States of the U.S. and state political subdivisions		—		110,499		—		110,499
	U.S. Treasury securities		124,962		—		—		124,962
	Equity security		14,807		—		—		14,807
Long-term investments:
	Auction rate security		—		—		9,050		9,050

Total		$	526,247	$	643,859	$	9,050	$	1,179,156

Liabilities:
Contingent consideration arrangement		$	—	$	—	$	40,000	$	40,000

Total		$	—	$	—	$	40,000	$	40,000

		December 31, 2010

		Quoted Market Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value Measurements
		(In thousands)
Assets:
Cash equivalents:
	Treasury and government agency money market funds	$	275,108	$	—	$	—	$	275,108
	Commercial paper		—		309,183		—		309,183
	Time deposits		—		26,050		—		26,050
Marketable securities:
	Corporate debt securities		—		238,163		—		238,163
	States of the U.S. and state political subdivisions		—		110,621		—		110,621
	U.S. Treasury securities		199,899		—		—		199,899
	Equity security		15,314		—		—		15,314
Long-term investments:
	Auction rate securities		—		—		13,100		13,100

Total		$	490,321	$	684,017	$	13,100	$	1,187,438

The following table presents the changes in the Company's assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

		Three Months Ended March 31,

		2011					2010
		Auction Rate Securities			Contingent Consideration Arrangement		Auction Rate Securities
		(In thousands)
Balance at January 1		$	13,100		$	—	$	12,635
Total net gains (realized and unrealized):
	Included in other comprehensive income		950			—		785
Fair value at date of acquisition			—			40,000		—
Settlements			(5,000	)		—		—

Balance at March 31		$	9,050		$	40,000	$	13,420

There are no gains or losses included in earnings for the three months ended March 31, 2011 and 2010, relating to the Company's assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs.

Auction rate securities

Historically, the Company's auction rate securities ("ARS") had determinable market values arising from the auction process. However, these auctions began to fail in the third quarter of 2007. As a result of these failed auctions, the ARS no longer have readily determinable market values and are instead valued by discounting the estimated future cash flow streams of the securities over the lives of the securities. Credit spreads and other risk factors are also considered in establishing a fair value. During the first quarter of 2011, one of the ARS was redeemed at its par value of $5.0 million. The cost basis of ARS is $10.0 million and $15.0 million at March 31, 2011 and December 31, 2010, respectively, with gross unrealized losses of $1.0 million and $1.9 million at March 31, 2011 and December 31, 2010, respectively. At March 31, 2011, the remaining auction rate security is rated A/WR. Due to its high credit rating and because the Company does not intend to sell this security and it is not more likely than not that the Company will be required to sell this security before recovery of its amortized cost basis, which may be maturity, the Company does not consider the auction rate security to be other-than-temporarily impaired at March 31, 2011. The unrealized losses are included in "Accumulated other comprehensive income" in the accompanying consolidated balance sheet. The remaining auction rate security matures in 2035.

Contingent consideration arrangement

See Note 4 for information regarding the contingent consideration arrangement.

Assets measured at fair value on a nonrecurring basis

The Company's non-financial assets, such as goodwill, intangible assets and property and equipment, as well as equity and cost method investments, are measured at fair value only when an impairment charge is recognized. Such impairment charges incorporate fair value measurements predominantly based on Level 3 inputs. See Note 6 for a description of an impairment charge recorded in the first quarter of 2010 related to an equity method investment.

- Definition

This element represents the disclosure related to the fair value measurement of assets and liabilities which includes [financial] instruments measured at fair value that are classified in stockholders' equity. Such assets and liabilities may be measured on a recurring or nonrecurring basis. The disclosures which may be required or desired include: (1) for assets and liabilities measured on a recurring basis, disclosure may include: (a) the fair value measurements at the reporting date; (b) the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets or liabilities (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3); (c) for fair value measurements using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (i) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (ii) purchases, sales, issuances, and settlements (net); (iii) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs); (d) the amount of the total gains or losses for the period in subparagraph (c) (i) above included in earnings (or changes in net assets) that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date and a description of where those unrealized gains or losses are reported in the statement of income (or activities); (e) the valuation technique(s) used to measure fair value and a discussion of changes in valuation techniques, if any, during the period and (2) for assets and liabilities that are measured at fair value on a nonrecurring basis (for example, impaired assets) disclosure may include, in addition to (a) above: (a) the reasons for the fair value measurements recorded; (b) the same as (b) above; (c) for fair value measurements using significant unobservable inputs (Level 3), a description of the inputs and the information used to develop the inputs; and (d) the valuation technique(s) used to measure fair value and a discussion of changes, if any, in the valuation technique(s) used to measure similar assets and/or liabilities in prior periods.

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