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Fair Value Measurements
 6 Months Ended
Jun. 30, 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 June 30, 2012 and December 31, 2011 (in thousands):
 
      
Fair Value Measurements at June 30, 2012 Using
 
   
Total
Carrying
Value at
June 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)
 $185,386  $185,386  $-  $- 
Restricted Cash (1)
  38,684   38,684   -   - 
Short-term investments (2)
  3,666   -   3,666   - 
Bonds substituted for retainage (3)
  15,182   -   15,182   - 
Long-term Investments - Auction rate securities (4)
  46,283   -   -   46,283 
Total
 $289,201  $224,070  $18,848  $46,283 
                  
Liabilities:
                
Interest rate swap contract (5)
 $1,916  $-  $1,916  $- 
Contingent Consideration (6)
  54,743   -   -   54,743 
   $56,659  $-  $1,916  $54,743 
 
      
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 accounts receivable, 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 June 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 June 30, 2012 are in securities collateralized by student loan portfolios. At June 30, 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 is classified as a component of other long-term liabilities.
(6)
The liabilities listed as of June 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 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 and six months ended June 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 

   
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 
      
 
The Company has classified its $46.3 million ARS investment as long-term investments in the Consolidated Condensed Balance Sheet at June 30, 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 and six months ended June 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 
      

   
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 

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%).

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 June 30, 2012 is $302.3 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 June 30, 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 six months ended June 30, 2012 and 2011.