Fair Value Measurements

3 Months Ended

Mar. 31, 2012

Fair Value Measurements [Abstract]

Fair Value Measurements

(5)  Fair Value Measurements

The Company measures certain financial instruments, including cash and cash equivalents, such as money market funds, at their fair value.  The fair value was determined based on a three-tier valuation hierarchy for disclosure of significant inputs.  These hierarchical tiers are defined as follows:

Level 1 - inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 - inputs are other than quoted prices in active markets that are either directly or indirectly observable through market corroboration.

Level 3 - inputs are unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions based on the best information available in the circumstances.

The following tables provide the assets and liabilities carried at fair value measured on a recurring basis as of March 31, 2012 and December 31, 2011 (in thousands):  

				Fair Value Measurements at March 31, 2012 Using
		Total Carrying Value at March 31, 2012		Quoted prices in active markets (Level 1)		Significant  other  observable  inputs (Level 2)		Significant  unobservable  inputs  (Level 3)
Assets:
Cash and Cash Equivalents (1)	$	190,414	$	190,414	$	-	$	-
Restricted Cash (1)		35,450		35,450		-		-
Short-term investments (2)		3,080		-		3,080		-
Bonds substituted for retainage (3)		12,791		-		12,791		-
Long-term Investments -Auction rate securities (4)		46,283		-		-		46,283
Total	$	288,018	$	225,864	$	15,871	$	46,283
Liabilities:
Interest rate swap contract (5)	$	1,368	$	-	$	1,368	$	-
Contingent Consideration (6)		51,697		-		-		51,697
	$	53,065	$	-	$	1,368	$	51,697

				Fair Value Measurements at December 31, 2011 Using
		Total Carrying Value at December 31, 2011		Quoted prices in active markets (Level 1)		Significant  other  observable  inputs (Level 2)		Significant  unobservable  inputs  (Level 3)
Assets:
Cash and Cash Equivalents (1)	$	204,240	$	204,240	$	-	$	-
Restricted Cash (1)		35,437		35,437		-		-
Short-term investments (2)		3,465		1,026		2,439		-
Bonds substituted for retainage (3)		12,488		-		12,488		-
Long-term Investments - Auction rate securities (4)		62,311		-		-		62,311
Total	$	317,941	$	240,703	$	14,927	$	62,311
Liabilities:
Interest rate swap contract (5)	$	-	$	-	$	-	$	-
Contingent Consideration (6)		51,555		-		-		51,555
	$	51,555	$	-	$	-	$	51,555

(1) Cash, cash equivalents and restricted cash consist primarily of money market funds with original maturity dates of three months or less, for which fair value is determined through quoted market prices.

(2) Short-term investments are classified as other current assets and are comprised of municipal bonds.  The fair values of the municipal bonds are obtained from readily-available pricing sources for comparable instruments, and as such, the Company has classified these assets as Level 2.

(3) Bonds substituted for retainage are classified as account receivables, including retainage and are comprised of U.S. Treasury Notes and other municipal bonds, the majority of which are rated Aa2 or better.  The fair values of these assets are obtained from readily-available pricing sources for comparable instruments, and as such, the Company has classified these assets as Level 2.

(4) At March 31, 2012 the Company had $46.3 million invested in ARS which the Company considers as available-for-sale long-term investments.  The long-term investments ARS held by the Company at March 31, 2012 are in securities collateralized by student loan portfolios.  At March 31, 2012 most of the Company's ARS are rated AAA.  The Company estimated the fair value of its ARS utilizing an income approach valuation model which considered, among other items, the following inputs: (i) prices from recent comparable transactions; (ii) other third-party pricing information without adjustment; (iii) the underlying structure of each security; (iv) the present value of future principal and interest payments discounted at rates considered to reflect current market conditions; (discount rates range from 3-7%) and (v) consideration of the probabilities of default or repurchase at par for each period (term periods range from 6-8 years).

(5) As discussed in Note 10, the Company entered into a swap agreement with Bank of America, N.A. to establish a long-term interest rate for its $200 million five-year term loan.  The swap agreement became effective for the term loan principal balance outstanding at January 31, 2012 and will remain effective through the maturity date of the term loan.  The Company values the interest rate swap liability utilizing a discounted cash flow model that takes into consideration forward interest rates observable in the market and the counterparty's credit risk.  This liability as classified as a component of other long-term liabilities.

(6) The liabilities listed as of March 31, 2012 above represent the contingent consideration for the acquisitions of Fisk, Anderson, GreenStar, and Lunda for which the measurement period for purchase price analysis has concluded.  The liabilities listed as of March 31, 2011 represent the contingent consideration for the acquisition of Fisk, as each of the other acquisitions listed above were closed subsequent to March 31, 2011.  See the level 3 rollforward below for disclosure of the Company's valuation approach.   

Assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three months ended March 31, 2012 and 2011 are as follows (in thousands):

	Auction Rate
	Securities
Balance at December 31, 2011	$	62,311
Purchases		-
Settlements		(16,553	)
Realized loss included in other income (expense), net		(2,699	)
Reversal of pretax impairment charges included in accumulated other comprehensive income (loss)		3,224
Balance at March 31, 2012	$	46,283

	Auction Rate
	Securities
Balance at December 31, 2010	$	88,129
Purchases		-
Settlements		-
Balance at March 31, 2011	$	88,129

The Company has classified its $46.3 million ARS investment as long-term investments in the Consolidated Condensed Balance Sheet at March 31, 2012, due to the Company's belief that the market for government-backed student loans may take in excess of twelve months to fully recover.

Liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three months ended March 31, 2012 and 2011 are as follows (in thousands):

	Contingent
	Consideration
Balance at December 31, 2011	$	51,555
Fair value adjustments included in other income (expense), net		142
Balance at March 31, 2012	$	51,697

	Contingent
	Consideration
Balance at December 31, 2010	$	-
Fair value measured at conclusion of purchase price analysis measurement period		4,200
Balance at March 31, 2011	$	4,200

The fair values of the contingent consideration were estimated based on an income approach which is based on the cash flows that the acquired entity is expected to generate in the future. This approach requires management to project revenues, operating expenses, working capital investment, capital spending and cash flows for the reporting unit over a multi-year period, as well as determine the weighted-average cost of capital to be used as a discount rate (weighted-average cost of capital inputs have ranged from 14-18%).  As a result of this analysis, the Company increased liabilities accrued at the conclusion of the measurement period by approximately $0.1 million, and the adjustments were included in other income (expense), net in the Consolidated Condensed Statements of Operations.

The carrying amount of cash and cash equivalents approximates fair value due to the short-term nature of these items. The carrying value of receivables, payables, other amounts arising out of normal contract activities, including retainage, which may be settled beyond one year, is estimated to approximate fair value.  Of the Company's long-term debt, the fair value of the fixed rate senior unsecured notes as of March 31, 2012 is $303 million, compared to its carrying value of $298.1 million.  The fair value of the senior unsecured notes was estimated based on market quotations at March 31, 2012.  For the remainder of the Company's long-term debt, the carrying value is estimated to approximate fair value. 

There were no significant transfers between level 1 and level 2 financial assets and liabilities that are fair valued on  a recurring basis during the three months ended March 31, 2012 and 2011.