Fair Value Measurements

3 Months Ended

Mar. 31, 2013

Fair Value Measurements [Abstract]

Fair Value Measurements

Note 4 – Fair value measurements 

We define fair value to be 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. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, we consider the principal or most advantageous market that market participants may use when pricing the asset or liability.   

We follow a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value measurement is determined based on the lowest level input that is significant to the fair value measurement. The three values of the fair value hierarchy are the following:   

Level 1 – Quoted prices in active markets for identical assets or liabilities   

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly   

Level 3 – Inputs that are not based on observable market data   

Assets and liabilities measured at fair value on a recurring basis are summarized below:

		Fair Value Measurements at Reporting Date Using
(In thousands)		(Unaudited)
Description		March 31, 2013		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Cash and cash equivalents available for sale:
Money Market Funds	$	38,001	$	38,001	$	-	$	-
U.S. treasuries and agencies		-		-		-		-
Short-term investments available for sale:
Municipal bonds		1,434		-		1,434		-
Corporate bonds		15,487		-		15,487		-
U.S. treasuries and agencies		119,025		-		119,025		-
Foreign government bonds		16,392		-		16,392		-
Time deposits		2,912		2,912		-		-
Derivatives		7,667		-		7,667		-
Total Assets	$	200,918	$	40,913	$	160,005	$	-
Liabilities
Derivatives	$	(2,792)	$	-	$	(2,792)	$	-
Total Liabilities	$	(2,792)	$	-	$	(2,792)	$	-
(In thousands)		Fair Value Measurements at Reporting Date Using
Description		December 31, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Cash and cash equivalents available for sale:
Money Market Funds	$	20,656	$	20,656	$	-	$	-
U.S. Treasuries and Agencies		-		-		-		-
Short-term investments available for sale:
Municipal bonds		1,466		-		1,466		-
Corporate bonds		7,778		-		7,778		-
U.S. treasuries and agencies		135,925		-		135,925		-
Foreign government bonds		25,085		-		25,085		-
Time deposits		2,912		2,912		-		-
Derivatives		4,246		-		4,246		-
Total Assets	$	198,068	$	23,568	$	174,500	$	-
Liabilities
Derivatives	$	(2,804)	$	-	$	(2,804)	$	-
Total Liabilities	$	(2,804)	$	-	$	(2,804)	$	-

We value our available-for-sale short-term investments based on pricing from third party pricing vendors, who may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs) in determining fair value. We classify all of our fixed income available-for-sale securities as having Level 2 inputs. The valuation techniques used to measure the fair value of our financial instruments having Level 2 inputs were derived from non-binding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricing models, such as discounted cash flow techniques. We believe all of these sources reflect the credit risk associated with each of our available-for-sale short-term investments. Short-term investments available-for-sale consists of debt securities issued by states of the U.S. and political subdivisions of the U.S., corporate debt securities and debt securities issued by U.S. government corporations and agencies as well as debt securities issued by foreign governments. All short-term investments available-for-sale have contractual maturities of less than 24 months.  

Derivatives include foreign currency forward and option contracts. Our foreign currency forward contracts are valued using an income approach (Level 2) based on the spot rate less the contract rate multiplied by the notional amount. Our foreign currency option contracts are valued using a market approach based on the quoted market prices which are derived from observable inputs including current and future spot rates, interest rate spreads as well as quoted market prices of similar instruments. We consider counterparty credit risk in the valuation of our derivatives. However, counterparty credit risk did not impact the valuation of our derivatives during the three month period ended March 31, 2013. There were not any transfers in or out of Level 1 or Level 2 during the three month period ended March 31, 2013.  

Our foreign government bonds consist of German government sovereign debt denominated in Euro with maximum maturities of 24 months. Our short-term investments do not involve sovereign debt from any other country in Europe.  

We did not have any items that were measured at fair value on a nonrecurring basis at March 31, 2013 and December 31, 2012.  

The carrying value of net accounts receivable and accounts payable contained in the Consolidated Balance Sheets approximates fair value.