Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2012

Assets and liabilities carried at fair value measured on a recurring basis

The following tables provide the assets and liabilities carried at fair value measured on a recurring basis as of September 30, 2012 and December 31, 2011 (in thousands):

	Fair Value Measurements at September 30, 2012 Using
	Total Carrying Value at September 30, 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)	$	180,777	$	180,777	$	-	$	-
Restricted Cash (1)		38,700		38,700		-		-
Short-term investments (2)		3,555		-		3,555
Bonds substituted for retainage (3)		14,893		-		14,893		-
Long-term Investments – Auction rate securities (4)		46,283		-		-		46,283
Total	$	284,208	$	219,477	$	18,448	$	46,283

Liabilities:
Interest rate swap contract (5)	$	2,214	$	-	$	2,214	$	-
Contingent Consideration (6)		46,706		-		-		46,706
	$	48,920	$	-	$	2,214	$	46,706

	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 majority of which are rated Aa2 or better. 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 accounts receivable, including retainage and are comprised of U.S. Treasury Notes and other municipal bonds, the majority of which are rated Aa3 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 September 30, 2012 the Company had $46.3 million invested in auction rate securities ("ARS") which the Company considers as available-for-sale long-term investments. The long-term investments ARS held by the Company at September 30, 2012 are in securities collateralized by student loan portfolios. At September 30, 2012 most of the Company's ARS were rated AAA and AA+. The Company estimated the fair value of its ARS utilizing an income approach valuation model which considered, among other items, the following inputs: (i) the underlying structure of each security; (ii) the present value of future principal and interest payments discounted at rates considered to reflect current market conditions (discount rates range from 3% to 7%); (iii) consideration of the probabilities of default or repurchase at par for each period (term periods range from 6 to 8 years); (iv) prices from recent comparable transactions; and (v) other third party pricing information without adjustment. See the Level 3 ARS rollforward below for disclosure of the Company's valuation approach.

(5)

As discussed in Note 10 – Financial Commitments, 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 is classified as a component of other long-term liabilities.

(6)

The liabilities listed as of September 30, 2012 above represent the contingent consideration for the Company's recent acquisitions for which the measurement period for purchase price analysis has concluded. See the Level 3 contingent consideration rollforward below for disclosure of the Company's valuation approach.

Assets measured at fair value on a recurring basis using significant unobservable inputs

Assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three and nine months ended September 30, 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
Purchases		-
Settlements		-
Balance at June 30, 2012	$	46,283
Purchases		-
Settlements		-
Balance at September 30, 2012	$	46,283

	Auction Rate Securities

Balance at December 31, 2010	$	88,129
Purchases		-
Settlements		-
Balance at March 31, 2011	$	88,129
Purchases		-
Settlements		-
Balance at June 30, 2011	$	88,129
Purchases		-
Settlements		-
Balance at September 30, 2011	$	88,129

Liabilities measured at fair value on a recurring basis using significant unobservable inputs

Liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three and nine months ended September 30, 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
Fair value measured at conclusion of purchase price analysis measurement period		3,344
Fair value adjustments included in other income (expense), net		(298	)
Balance at June 30, 2012	$	54,743
Fair value adjustments included in other income (expense), net		(37	)
Contingent consideration settled		(8,000	)
Balance at September 30, 2012	$	46,706

	Contingent Consideration

Balance at December 31, 2010	$	-
Fair value measured prior to conclusion of purchase price analysis measurement period		4,200
Balance at March 31, 2011	$	4,200
Fair value measured prior to conclusion of purchase price analysis measurement period		5,500
Balance at June 30, 2011	$	9,700
Fair value adjustments included in other income (expense), net		(1,432	)
Fair value measured prior to conclusion of purchase price analysis measurement period		40,432
Balance at September 30, 2011	$	48,700

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

+ References+ Details

- Definition

Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.

+ References+ Details