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FINANCIAL INSTRUMENTS | 6 Months Ended
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Jun. 30, 2012
FINANCIAL INSTRUMENTS | 6. FINANCIAL INSTRUMENTS Cash and Cash Equivalents and Investments Cash and cash equivalents and investments from our continuing operations consist of the following as of June 30, 2012 and December 31, 2011:
|  | June 30, 2012 |
|  | (Dollars in thousands) Gross Unrealized |
|  | Cost |  |  | Gain |  |  | (Loss) |  |  | Fair Value |
Cash and cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash |  | $ | 107,304 |  |  | $ | — |  |  | $ | — |  |  | $ | 107,304 |
Money market funds |  |  | 101,636 |  |  |  | 372 |  |  |  | — |  |  |  | 102,008 |
Total cash and cash equivalents |  |  | 208,940 |  |  |  | 372 |  |  |  | — |  |  |  | 209,312 |
Short-term investments (available-for-sale): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury bills |  |  | 133,997 |  |  |  | — |  |  |  | (47 | ) |  |  | 133,950 |
U.S. Government Agencies |  |  | 26,669 |  |  |  | — |  |  |  | (3 | ) |  |  | 26,666 |
Total short-term investments (available-for-sale) |  |  | 160,666 |  |  |  | — |  |  |  | (50 | ) |  |  | 160,616 |
Total cash and cash equivalents and short-term investments |  | $ | 369,606 |  |  | $ | 372 |  |  | $ | (50 | ) |  | $ | 369,928 |
Long-term investments (available-for-sale): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Municipal bonds |  | $ | 11,150 |  |  | $ | — |  |  | $ | (735 | ) |  | $ | 10,415 |
|  | December 31, 2011 |
|  | (Dollars in thousands) Gross Unrealized |
|  | Cost |  |  | Gain |  |  | (Loss) |  |  | Fair Value |
Cash and cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash |  | $ | 157,317 |  |  | $ | — |  |  | $ | — |  |  | $ | 157,317 |
Money market funds |  |  | 122,827 |  |  |  | 448 |  |  |  | — |  |  |  | 123,275 |
Total cash and cash equivalents |  |  | 280,144 |  |  |  | 448 |  |  |  | — |  |  |  | 280,592 |
Short-term investments (available-for-sale): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury bills |  |  | 133,648 |  |  |  | 31 |  |  |  | (5 | ) |  |  | 133,674 |
U.S. Government Agencies |  |  | 26,962 |  |  |  | — |  |  |  | (29 | ) |  |  | 26,933 |
Total short-term investments (available-for-sale) |  |  | 160,610 |  |  |  | 31 |  |  |  | (34 | ) |  |  | 160,607 |
Total cash and cash equivalents and short-term investments |  | $ | 440,754 |  |  | $ | 479 |  |  | $ | (34 | ) |  | $ | 441,199 |
Long-term investments (available-for-sale): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Municipal bonds |  | $ | 11,150 |  |  | $ | — |  |  | $ | (735 | ) |  | $ | 10,415 |
In the table above, unrealized holding losses as of June 30, 2012 relate to short-term investments that have been in a continuous unrealized loss position for less than one year. The table also includes unrealized holding losses that relate to our long-term investments in municipal bonds, which are auction rate securities (“ARS”). When evaluating our investments for possible impairment, we review factors such as the length of time and extent to which fair value has been less than the cost basis, the financial condition of the investee, and our ability and intent to hold the investment for a period of time that may be sufficient for anticipated recovery in fair value. The decline in the fair value of our municipal bonds through June 30, 2012 is attributable to the continued lack of activity in the ARS market, exposing these investments to liquidity risk. Included in cash and cash equivalents above are amounts related to certain of our European campuses that are operated on a not-for-profit basis. The cash and cash equivalents related to these schools have restrictions which require that the funds be utilized for these particular not-for-profit schools. The amount of cash and cash equivalents of our not-for-profit schools with restrictions was $63.3 million and $74.5 million at June 30, 2012 and December 31, 2011, respectively. Restrictions on cash balances have not affected our ability to fund operations. Money market funds: Mutual funds that invest in lower risk securities and generate low yields. Such funds maintain clear investment guidelines and seek to limit credit, market and liquidity risks. U.S. Treasury bills: Debt obligations issued by the U.S. government that pay interest at maturity. U.S. Treasury bills are generally traded at discounts to par value and mature in one year or less. U.S. Government Agencies: Debt obligations issued by a Government Sponsored Enterprise (“GSE”) which pay interest. GSEs are privately-held corporations with public purposes created by the U.S. Congress to reduce the cost of capital for certain borrowing sectors of the economy. Our debt obligations are issued by Federal Home Loan Banks and generally trade at discounts to par value. These obligations mature in one year or less and have the implicit backing of the U.S. Government although they are not direct obligations of the U.S. Government. Municipal bonds: Debt obligations issued by states, cities, counties, and other governmental entities, which earn federally tax-exempt interest. ARS generally have stated terms to maturity of greater than one year. We classify investments in ARS as non-current on our consolidated balance sheets within other assets. Auctions can “fail” when the number of sellers of the security exceeds the buyers for that particular auction period. In the event that an auction fails, the interest rate resets at a rate based on a formula determined by the individual security. The ARS for which auctions have failed continue to accrue interest and are auctioned on a set interval until the auction succeeds, the issuer calls the securities, or they mature. As of June 30, 2012, we have determined these investments are at risk for impairment due to the nature of the liquidity of the market over the past year. Cumulative unrealized losses as of June 30, 2012 amount to $0.7 million and are reflected within accumulated other comprehensive loss as a component of stockholders’ equity. We believe this impairment is temporary, as we do not intend to sell the investments and it is unlikely we will be required to sell the investments before recovery of their amortized cost basis. Fair Value Measurements The fair value measure of accounting for financial instruments establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. As of June 30, 2012, we held investments that are required to be measured at fair value on a recurring basis. These investments (available-for-sale) consist of U.S. Treasury bills and U.S. Government Agencies that are publicly traded and for which market prices are readily available. As of June 30, 2012, our investments in municipal bonds are classified as available-for-sale and reflected at fair value. The auction events for these investments have been failing for over three years. The fair values of these securities are estimated utilizing a discounted cash flow analysis as of June 30, 2012. These analyses consider, among other items, the collateralization underlying the security investments, the credit worthiness of the counterparty, the timing of expected future cash flows, and the expectation of the next time the security is expected to have a successful auction. These securities were also compared, when possible, to other observable market data with similar characteristics. Investments measured at fair value on a recurring basis subject to the disclosure requirements issued by FASB ASC Topic 820 – Fair Value Measurements at June 30, 2012 and December 31, 2011 were as follows:
|  | As of June 30, 2012 |
|  | (Dollars in thousands) |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Municipal bonds |  | $ | — |  |  | $ | — |  |  | $ | 10,415 |  |  | $ | 10,415 |
U.S. Treasury bills |  |  | 133,950 |  |  |  | — |  |  |  | — |  |  |  | 133,950 |
U.S. Government Agencies |  |  | 26,666 |  |  |  | — |  |  |  | — |  |  |  | 26,666 |
Totals |  | $ | 160,616 |  |  | $ | — |  |  | $ | 10,415 |  |  | $ | 171,031 |
|  | As of December 31, 2011 |
|  | (Dollars in thousands) |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Municipal bonds |  | $ | — |  |  | $ | — |  |  | $ | 10,415 |  |  | $ | 10,415 |
U.S. Treasury bills |  |  | 133,674 |  |  |  | — |  |  |  | — |  |  |  | 133,674 |
U.S. Government Agencies |  |  | 26,933 |  |  |  | — |  |  |  | — |  |  |  | 26,933 |
Totals |  | $ | 160,607 |  |  | $ | — |  |  | $ | 10,415 |  |  | $ | 171,022 |
The following table presents a rollforward of our assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as defined in FASB ASC Topic 820 for the year to date ended June 30, 2012:
|  | (Dollars in thousands) |
Balance at December 31, 2011 |  | $ | 10,415 |
Unrealized loss |  |  | — |
Balance at June 30, 2012 |  | $ | 10,415 |
Credit Agreement As of June 30, 2012, we had letters of credit totaling $6.7 million outstanding under our $185.0 million U.S. Credit Agreement. Borrowing availability under our U.S. Credit Agreement as of June 30, 2012, was $178.3 million. Our U.S. Credit Agreement expires on October 31, 2012.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 16 -URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13504-108611 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 107 -Paragraph 15C, 15D -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 133 -Paragraph 44A, 44B -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 107 -Paragraph 15A -Subparagraph a-d -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 107 -Paragraph 3, 10, 14, 15 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13433-108611 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 159 -Paragraph 17-22, 27, 28 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13537-108611 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 107 -Paragraph 15B -Subparagraph a, b -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 157 -Paragraph 32, 33, 34 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7578670&loc=d3e19207-110258 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 28 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612 + Details
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