Nutrisystem 2011 Annual Report Download - page 58

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At December 31, 2010, cash, cash equivalents and marketable securities of continuing operations consisted of the
following:
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair
Value
Cash .................................................. $15,283 $0 $ 0 $15,283
Money market account .................................... 5,093 0 0 5,093
U.S. government bond fund ................................ 20,877 0 34 20,843
$41,253 $0 $34 $41,219
4. FAIR VALUE MEASUREMENTS
A three-tier fair value hierarchy has been established by the Financial Accounting Standards Board (“FASB”) to
prioritize the inputs used in measuring fair value. These tiers are as follows:
Level 1—Valuations based on quoted prices for identical assets and liabilities in active markets.
Level 2—Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted
prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and
liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable
market data.
Level 3—Valuations based on unobservable inputs reflecting the Company’s own assumptions, consistent with
reasonably available assumptions made by other market participants. These valuations require significant
judgment.
The fair values of the Company’s cash equivalents and marketable securities are based on quoted prices in active
markets for identical assets. The fair values of the Company’s derivative instruments are determined using
pricing models that take into account contract terms and certain observable current market information such as
London Inter-Bank Offered Rate (“LIBOR”) interest rates.
The following table summarizes the Company’s financial assets and liabilities measured at fair value at
December 31, 2011:
Total Fair Value
Quoted Prices in Active
Markets for Identical
Assets (Level 1)
Significant Other
Observable Inputs
(Level 2)
Money market account .......................... $35,129 $35,129 $ 0
U.S. government bond fund ...................... 10,013 10,013 0
Total assets ................................... $45,142 $45,142 $ 0
Interest rate swap .............................. $ (22) $ 0 $(22)
The following table summarizes the Company’s financial assets and liabilities measured at fair value at
December 31, 2010:
Total Fair Value
Quoted Prices in Active
Markets for Identical
Assets (Level 1)
Significant Other
Observable
Inputs (Level 2)
Money market account ........................... $ 5,093 $ 5,093 $ 0
U.S. government bond fund ....................... 20,843 20,843 0
Total assets .................................... $25,936 $25,936 $ 0
Interest rate swap ............................... $ (44) $ 0 $(44)
54