Fair Value

9 Months Ended

Dec. 31, 2011

Fair Value [Abstract]

Fair Value

Note 2 - Fair Value

The Company measures its cash equivalents, short-term investments and long-term investments at fair value. Fair value is defined as the price that would be received from selling an asset and paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.

A three-tiered fair value hierarchy has been established as the basis for considering the above assumptions and determining the inputs used in the valuation methodologies in measuring fair values.  The three levels of inputs are defined as follows:

Level 1 - Unadjusted quoted market prices for identical assets or liabilities in active markets that the Company has the ability to access.

Level 2 - Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets.

Level 3 - Valuations based on models where significant inputs are not observable. The unobservable inputs reflect the Company's own assumptions about the assumptions that market participants would use.

The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs. If a financial instrument uses an input that is significant to the fair value calculation, the instrument will be categorized based upon the lowest level of input that is significant to the fair value calculation.  The Company's financial assets and liabilities measured at fair value on a recurring basis include cash equivalents and investment securities, both short-term and long-term.

The Company's long-term investments consist entirely of AAA rated auction rate securities ("ARS"), which are collateralized by student loans. Due to the lack of availability of observable market quotes for the Company's investment portfolio of these ARS, the fair value was estimated based on a discounted cash flow model and included a discount factor for illiquidity of the ARS market. The assumptions used in the discounted cash flow model include estimates for interest rates, timing and amounts of cash flows, liquidity of the underlying security, expected holding periods, and contractual terms of the security. In light of the current market condition for ARS, the Company developed different scenarios for the significant inputs used in the discounted cash flow model, including but not limited to a liquidity discount of 125 and 150 basis points per year for the current ARS market, and the timing of recovery of the ARS market from three to five years. The estimated fair value of those of the Company's ARS classified as level 3 assets ranges from $25,600,000 to $26,700,000. The Company believes this estimated range of fair values of its ARS is appropriate taking into consideration historical ARS market data, the possibility of development of a secondary market for ARS, recent market participant behavior, and public policy implications associated with the student loan based ARS market. The Company concluded that the fair value of those of its ARS which are classified as level 3 assets was $26,000,000 as of December 31, 2011 net of a temporary impairment of $2,050,000 to par value.

The Company also considered the quality, amount of collateral, and US government guarantee for the ARS and looked to other marketplace transactions and information received from other third party brokers in order to assess whether the fair value based on the discounted cash flow model is reasonable. The valuation of the Company's investment portfolio is subject to uncertainties that are difficult to predict. Factors that may affect the Company's valuation include changes to credit ratings of the securities as well as the underlying assets supporting those securities, rates of default of the underlying assets, underlying collateral values, discount rates, counterparty risk and ongoing strength, and quality of market credit and liquidity. Significant inputs to the investment valuations are unobservable in the active markets and therefore the Company's ARS are classified as Level 3 in the hierarchy.

The following tables summarize assets and liabilities measured at fair value on a recurring basis as of December 31, 2011 and April 2, 2011, excluding accrued interest (in thousands):

	December 31, 2011
	Fair value measurements
Assets	Level 1			Level 2		Level 3		Total
Money market funds	$	12,301	(2)	$	-	$	-	$	12,301
Municipal bonds		-			31,537		-		31,537
Discount notes		-			1,250		-		1,250
Corporate bonds		-			38,256		-		38,256
Government agency bonds		-			21,136		-		21,136
Certificate of deposits		-			12,186		-		12,186
Equity mutual funds related to NQDCP (1)		7,986			-		-		7,986
Long-term investments in ARS		-			-		26,000		26,000
Total assets at fair value	$	20,287		$	104,365	$	26,000	$	150,652
Liabilities
Obligation related to NQDCP (1)	$	7,986		$	-	$	-	$	7,986

	April 2, 2011
	Fair value measurements
Assets	Level 1			Level 2			Level 3		Total
Money market funds	$	10,681	(2)	$	-		$	-	$	10,681
Municipal bonds		-			62,768	(3)		-		62,768
Discount notes		-			3,998			-		3,998
Corporate bonds		-			28,177	(4)		-		28,177
Government agency bonds		-			10,816	(5)		-		10,816
Certificate of deposits		-			748			-		748
Equity mutual funds related to NQDCP (1)		8,157			-			-		8,157
Long-term investments in ARS		-			-			30,200		30,200
Total assets at fair value	$	18,838		$	106,507		$	30,200	$	155,545
Liabilities
Obligation related to NQDCP (1)	$	8,157		$	-		$	-	$	8,157

_________________________

(1)Non-qualified Deferred Compensation Plan.

(2) The money market funds of $12,301,000 and $10,681,000 were classified as cash equivalents as of December 31, 2011 and April 2, 2011, respectively.

(3) Included in municipal bonds was $151,000, which was classified as cash equivalents as of April 2, 2011.

(4) Included in corporate bonds was $253,000, which was classified as cash equivalents as of April 2, 2011.

(5) Included in government agency bonds was $4,500,000, which was classified as cash equivalents as of April 2, 2011.

The following table summarizes the change in fair value of the Company's level 3 assets during the nine months ended December 31, 2011 (in thousands):

Fair value measurements of assets using level 3 inputs	Long-term investments in ARS
Balance as of April 2, 2011	$	30,200
Redemption of investments in ARS		(4,700	)
Reduction in unrealized loss recorded in "Accumulated other comprehensive loss"		500
Balance as of December 31, 2011	$	26,000

During the nine months ended December 31, 2011, the Company received $4,700,000 relating to ARS with a carrying value at the time of $4,357,000 redeemed at par value. See Note 3 for further discussion of the Company's ARS.