FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2011

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

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:

• •

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

  •

  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.

  •

  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:

		September 30, 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	$	459,902	$	—	$	—	$	459,902
	Commercial paper		—		49,999		—		49,999
	Time deposits		—		4,700		—		4,700
Marketable securities:
	Corporate debt securities		—		67,908		—		67,908
	States of the U.S. and state political subdivisions		—		112,141		—		112,141
	Equity security		5,632		—		—		5,632
Long-term investments:
	Auction rate security		—		—		5,860		5,860
	Marketable equity securities		78,715		—		—		78,715
Total		$	544,249	$	234,748	$	5,860	$	784,857
Liabilities:
Contingent consideration arrangement		$	—	$	—	$	10,000	$	10,000
Total		$	—	$	—	$	10,000	$	10,000

		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 tables present 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 September 30,
		2011					2010
		Auction Rate Security			Contingent Consideration Arrangement		Auction Rate Securities
		(In thousands)
Balance at July 1		$	8,680		$	10,000	$	11,255
Total net (losses) gains (realized and unrealized):
	Included in other comprehensive income		(2,820	)		—		1,095
Balance at September 30		$	5,860		$	10,000	$	12,350

		Nine Months Ended September 30,
		2011						2010
		Auction Rate Securities			Contingent Consideration Arrangement			Auction Rate Securities
		(In thousands)
Balance at January 1		$	13,100		$	—		$	12,635
Total net (losses) gains (realized and unrealized):
	Included in other comprehensive income		(2,240	)		—			(285	)
Fair value at date of acquisition			—			40,000			—
Settlements			(5,000	)		(30,000	)		—
Balance at September 30		$	5,860		$	10,000		$	12,350

        There are no gains or losses included in earnings for the three and nine months ended September 30, 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

        The Company's auction rate securities are 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 fair value. During the first quarter of 2011, one of the auction rate securities was redeemed at its par value of $5.0 million. The cost basis of the auction rate securities is $10.0 million and $15.0 million at September 30, 2011 and December 31, 2010, respectively, with gross unrealized losses of $4.1 million and $1.9 million at September 30, 2011 and December 31, 2010, respectively. The unrealized losses are included in "Accumulated other comprehensive income" in the accompanying consolidated balance sheet. At September 30, 2011, the remaining auction rate security is rated A/WR and matures in 2035. The Company does not consider the auction rate security to be other-than-temporarily impaired at September 30, 2011, 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.

Long-term marketable equity securities

        The cost basis of the long-term marketable equity securities at September 30, 2011 was $48.9 million, with gross unrealized gains of $34.5 million and a gross unrealized loss of $4.7 million, included in "Accumulated other comprehensive income" in the accompanying consolidated balance sheet. Because of the short duration of the loss, the Company does not consider this security to be other-than-temporarily impaired at September 30, 2011.

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 fair value measurements are based predominantly on Level 3 inputs.

        During the first quarter of 2010, the Company recorded an $18.3 million impairment charge to write-down an investment accounted for using the equity method to fair value. The decline in value was determined to be other-than-temporary due to the investee's continued losses and negative operating cash flows. The Company estimated the fair value of its investment using a multiple of revenue approach. The impairment charge is included within "Equity in losses of unconsolidated affiliates" in the accompanying consolidated statement of operations.