Fair Value Measurement

12 Months Ended

Dec. 31, 2014

4.	Fair Value Measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Factors used in determining the fair value of our financial assets and liabilities are summarized into three broad categories:

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Level 1—quoted prices in active markets for identical securities;

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Level 2—other significant observable inputs, including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.; and

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Level 3—significant unobservable inputs, including our own assumptions in determining fair value.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

In determining the fair value of our financial assets, the Company predominately uses the market approach. In determining the fair value of all its certificates of deposit, money market funds, U.S. treasuries, municipal bonds, corporate bonds, and variable rate demand notes classified as Level 2, the Company utilizes the non-binding quotes provided by our three investment brokers. We receive one non-binding broker quote for each financial asset as of the balance sheet date. To value the Level 2 assets, our investment brokers use proprietary multi-dimensional pricing models that include a variety of inputs, including quoted prices for identical or similar assets in active markets, quoted prices for identical or similar assets in markets that are not active, interest rates and yield curves observable at commonly quoted intervals, volatilities, prepayment speeds, loss severities, credit risks and default rates that are observable at commonly quoted intervals. There were no assets or liabilities where Level 3 valuation techniques were used and there were no assets and liabilities measured at fair value on a non-recurring basis.

Marketable securities consist of the following (in thousands):


	December 31, 2014							December 31, 2013							Fair Value Category
	Cost		Gross Unrealized Gains (Losses)			Recorded Basis		Cost		Gross Unrealized (Losses)			Recorded Basis		Fair Value Category
Current:
Available-for-sale:
VRDN	$	21,670	$	0		$	21,670	$	10,000	$	0		$	10,000		2
Certificates of deposit		8,330		(43	)		8,287		0		0			0		2
Corporate bonds		0		0			0		9,800		(13	)		9,787		2

	$	30,000	$	(43	)	$	29,957	$	19,800	$	(13	)	$	19,787

Long term:
Available-for-sale:
Municipal bonds	$	3,843	$	7		$	3,850	$	4,074	$	(17	)	$	4,057		2
Corporate bonds		2,153		(3	)		2,150		1,879		(27	)		1,852		2
Certificates of deposit		14,944		(14	)		14,930		0		0			0		2

	$	20,940	$	(10	)	$	20,930	$	5,953	$	(44	)	$	5,909

The Company’s restricted marketable securities component of restricted marketable securities and workers’ compensation deposits consists of the following (in thousands):


	December 31, 2014							December 31, 2013						Fair Value Category
	Cost		Gross Unrealized Gains (Losses)			Recorded Basis		Cost		Gross Unrealized Gains		Recorded Basis		Fair Value Category
Current:
Available-for-sale:
Money market funds held in trust	$	3,776	$	0		$	3,776	$	0	$	0	$	0		2

	$	3,776	$	0		$	3,776	$	0	$	0	$	0

Long term:
Available-for-sale:
Money market funds held in trust	$	46,310	$	0		$	46,310	$	0	$	0	$	0		2
Municipal bonds		4,352		21			4,373		4,742		10		4,752		2
Corporate bonds		3,540		(3	)		3,537		2,849		5		2,854		2
U.S. treasuries		3,963		0			3,963		2,787		0		2,787		1

	$	58,165	$	18		$	58,183	$	10,378	$	15	$	10,393

The Company’s long term restricted certificates of deposit are summarized as follows (in thousands):


	December 31, 2014						December 31, 2013
	Cost		Gross Unrealized Gains		Recorded Basis		Cost		Gross Unrealized Gains		Recorded Basis		Fair Value Category
Restricted certificates of deposit	$	114,335	$	0	$	114,335	$	12,789	$	0	$	12,789		2

- 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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