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CASH AND CASH EQUIVALENTS AND INVESTMENTS | 12 Months Ended
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Dec. 31, 2012
CASH AND CASH EQUIVALENTS AND INVESTMENTS | 6. CASH AND CASH EQUIVALENTS AND INVESTMENTS Cash and cash equivalents and investments from our continuing operations consist of the following as of December 31, 2012 and 2011:
|  | December 31, 2012 |
|  | (Dollars in thousands) |
|  |  |  |  | Gross Unrealized |  |  |  |
|  | Cost |  |  | Gain |  |  | (Loss) |  |  | Fair Value |
Cash and cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash |  | $ | 136,784 |  |  | $ | — |  |  | $ | — |  |  | $ | 136,784 |
Money market funds |  |  | 103,764 |  |  |  | 12 |  |  |  | — |  |  |  | 103,776 |
Cash and cash equivalents, unrestricted |  |  | 240,548 |  |  |  | 12 |  |  |  | — |  |  |  | 240,560 |
Restricted cash |  |  | 97,878 |  |  |  | — |  |  |  | — |  |  |  | 97,878 |
Total cash and cash equivalents |  |  | 338,426 |  |  |  | 12 |  |  |  | — |  |  |  | 338,438 |
Short-term investments (available-for-sale): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury bills |  |  | 63,879 |  |  |  | 4 |  |  |  | (7 | ) |  |  | 63,876 |
Total short-term investments (available-for-sale) |  |  | 63,879 |  |  |  | 4 |  |  |  | (7 | ) |  |  | 63,876 |
Total cash and cash equivalents and short-term investments |  | $ | 402,305 |  |  | $ | 16 |  |  | $ | (7 | ) |  | $ | 402,314 |
Long-term investments (available-for-sale): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Municipal bonds |  | $ | 7,850 |  |  | $ | — |  |  | $ | (468 | ) |  | $ | 7,382 |
|  | 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 |
Cash and cash equivalents, unrestricted |  |  | 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 December 31, 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 investment in municipal bonds, which is an auction rate security (“ARS”). When evaluating our investment 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 unrealized loss attributable to our municipal bonds at December 31, 2012 is attributable to the continued lack of activity in the ARS market, exposing this investment to liquidity risk. Included in cash and cash equivalents within our consolidated balance sheets are amounts related to certain of our European campuses that are operated as not-for-profit schools. The cash and cash equivalents related to these schools require that the funds be utilized for these particular not-for-profit schools. The amount of not-for-profit cash and cash equivalents was $87.2 million and $74.5 million at December 31, 2012 and December 31, 2011, respectively. In addition, restricted cash balances as of December 31, 2012 total approximately $97.9 million and are comprised of $88.0 million to provide securitization for borrowings under our Credit Agreement, $7.4 million of certificates of deposit to provide securitization for our letters of credit and $2.5 million of funds related to a legal matter. 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. Our investment in ARS has a stated term to maturity of greater than one year, and as such, we classify our investment 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 continues to accrue interest and is auctioned on a set interval until the auction succeeds, the issuer calls the security, or it matures. As of December 31, 2012, we have determined this investment is at risk for impairment due to the nature of the liquidity of the market over the past year. Cumulative unrealized losses as of December 31, 2012 amount to $0.5 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 investment and it is unlikely we will be required to sell the investment before recovery of its amortized cost basis. During the fourth quarter of 2012, we sold one ARS investment for a loss of $0.2 million. We do not have the intent to sell our remaining ARS investment as of December 31, 2012. A schedule of available-for-sale investments segregated by their original stated terms to maturity as of December 31, 2012 and 2011, are as follows:
|  | Less than one year |  |  | One to five years |  |  | Five to ten years |  |  | Greater than ten years |  |  | Total |
|  | (Dollars in thousands) |
Original stated term to maturity of available-for-sale-investments as of December- 31, 2012 |  | $ | 63,876 |  |  | $ | — |  |  | $ | — |  |  | $ | 7,382 |  |  | $ | 71,258 |
Original stated term to maturity of available-for-sale-investments as of December- 31, 2011 |  | $ | 160,607 |  |  | $ | — |  |  | $ | — |  |  | $ | 10,415 |  |  | $ | 171,022 |
Realized gains or losses resulting from sales of investments during the years ended December 31, 2012, 2011 and 2010 were not significant. 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 December 31, 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 that are publicly traded and for which market prices are readily available. As of December 31, 2012, our investment in municipal bonds is classified as available-for-sale and reflected at fair value. The auction event for this investment has been failing for over three years. The fair value of this security is estimated utilizing a discounted cash flow analysis as of December 31, 2012. This analysis considers, among other items, the collateralization underlying the security investment, 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. This security was 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 December 31, 2012 and December 31, 2011 were as follows:
|  | As of December 31, 2012 |
|  | (Dollars in thousands) |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Municipal bonds |  | $ | — |  |  | $ | — |  |  | $ | 7,382 |  |  | $ | 7,382 |
U.S. Treasury bills |  |  | 63,876 |  |  |  | — |  |  |  | — |  |  |  | 63,876 |
Totals |  | $ | 63,876 |  |  | $ | — |  |  | $ | 7,382 |  |  | $ | 71,258 |
|  | 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 December 31, 2012:
|  | (Dollars in thousands) |
Balance at December 31, 2011 |  | $ | 10,415 |
Unrealized gain |  |  | 267 |
Realized loss |  |  | (188 | )
Settlements |  |  | (600 | )
Sale of securities |  |  | (2,512 | )
Balance at December 31, 2012 |  | $ | 7,382 |

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- Definition The entire disclosure for cash and cash equivalent footnotes, which may include the types of deposits and money market instruments, applicable carrying amounts, restricted amounts and compensating balance arrangements. Cash and equivalents include: (1) currency on hand (2) demand deposits with banks or financial institutions (3) other kinds of accounts that have the general characteristics of demand deposits (4) short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Generally, only investments maturing within three months from the date of acquisition qualify. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 6 -Section H -Subsection 3 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Glossary Cash Equivalents -URI http://asc.fasb.org/extlink&oid=6507016 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 230 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6367179&loc=d3e4273-108586 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 95 -Paragraph 8, 9, 10 -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 Accounting Standards Codification -Glossary Cash -URI http://asc.fasb.org/extlink&oid=6506951 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 1 -Article 5 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB TOPIC 6.H.3) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13728-122682 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.1) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 95 -Paragraph 7 -Footnote 1 -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. + Details
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