Fair Value Measurements

3 Months Ended

Sep. 30, 2011

Fair Value Measurements [Abstract]

FAIR VALUE MEASUREMENTS

4.       FAIR VALUE MEASUREMENTS

Vanguard's financial assets recorded at fair value on a recurring basis primarily relate to investments in available-for-sale securities held by one of itscaptive insurance subsidiaries. The following tables present information about the assets that are measured at fair value on a recurring basis as of September 30, 2011 and June 30, 2011 (in millions). The following tables also indicate the fair value hierarchy of the valuation techniques Vanguard utilized to determine such fair values. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets. Vanguard considers a security that trades at least weekly to have an active market. Fair values determined by Level 2 inputs utilize data points that are observable, such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs are unobservable data points for the asset, and include situations where there is little, if any, market activity for the asset.Vanguard's policy is to recognize transfers between levels as of the actual date of the event or change in circumstances that caused the transfer.

				Quoted Prices		Significant
				in Active		Other		Significant
				Markets for		Observable		Unobservable
				Identical Assets		Inputs		Inputs
		September 30, 2011		(Level 1)		(Level 2)		(Level 3)
United States short-term treasury bills	$	21.0	$	0.1	$	20.9	$	-
Auction rate securities		10.0		-		-		10.0
Corporate bonds		11.4		-		11.4		-
Common stock - domestic		8.3		0.1		8.2		-
Common stock - international		7.6		7.4		0.2		-
Preferred stock - international		0.1		0.1		-		-
Investments in securities	$	58.4	$	7.7	$	40.7	$	10.0
				Quoted Prices		Significant
				in Active		Other		Significant
				Markets for		Observable		Unobservable
				Identical Assets		Inputs		Inputs
		June 30, 2011		(Level 1)		(Level 2)		(Level 3)
United States short-term treasury bills	$	20.8	$	0.3	$	20.5	$	-
Auction rate securities		8.8		-		-		8.8
Corporate bonds		14.1		-		14.1		-
Common stock - domestic		9.7		0.1		9.6		-
Common stock - international		9.7		9.4		0.3		-
Preferred stock - international		0.2		0.2		-		-
Investments in securities	$	63.3	$	10.0	$	44.5	$	8.8

       The following tables provide reconciliations of the beginning and ending balances for the threemonths ended September 30, 2011 and the year ended June 30, 2011 for those fair value measurements using significant Level 3 unobservable inputs (in millions).

								Increase in
		Balance at				Realized loss		fair value,		Balance at
		June 30, 2011		Redemptions		on redemptions		pre tax		September 30, 2011
Auction rate securities	$	8.8	$	-	$	-	$	1.2	$	10.0
								Increase in
		Balance at				Realized loss		fair value,		Balance at
		June 30, 2010		Redemptions		on redemptions		pre tax		June 30, 2011
Auction rate securities	$	19.8	$	(14.3)	$	0.5	$	2.8	$	8.8

Investments in securities

As of September 30, 2011, Vanguard held $58.4 million in total available-for-sale investments in debt and equity securities, which are included in investments in securities on the condensed consolidated balance sheets. Investments in corporate bonds, valued at approximately $11.4 million at September 30, 2011, consist of corporate bonds and other fixed income investments with maturities ranging from approximately 4 to 15years.

As of September 30, 2011, approximately $48.4 million of the acquired DMC investments were reflected on the accompanying condensed consolidated balance sheet in investments in securities. Vanguardcalculates realized gain or loss on sales of investments using the amortized cost basis, as determined by specific identification. The amortized cost basis of these investments was approximately $51.1 million as of September 30, 2011.

The investmentsacquired from DMC are classified as “available-for-sale” and are recorded at fair value. The investment securities are held for the purpose of providing the funding source to pay professional liability claims covered by the captive insurance subsidiary. Vanguard adjusts the book value of these investments to fair value on a quarterly basis.

The following table provides a reconciliation of the beginning and ending balances for the three months ended September 30, 2011 (in millions).

								Realized gain		Decrease in
		Fair value at		Proceeds from		Purchases of		on sales,		fair value,		Fair value at
		June 30, 2011		sales		securities		pre tax		pre tax		September 30, 2011
DMC securities	$	54.5	$	(22.7)	$	20.9	$	0.1	$	(4.4)	$	48.4

       Vanguard determines whether an other-than-temporary decline in market value has occurred by considering the duration that, and extent to which, the fair value of the investment is below its amortized cost, the financial condition and near-term prospects of the issuer or underlying collateral of a security; and Vanguard's intent and ability to retain the security in order to allow for an anticipated recovery in fair value. Other-than-temporary declines in fair value from amortized cost for available for sale equity and debt securities that Vanguard intends to sell or would be more-likely-than-not be required to sell before the expected recovery of the amortized cost basis are charged to other (income) and expense in the period in which the loss occurs. The gross unrealized loss for the DMC securities was approximately $2.7 million ($1.5 million, net of taxes) at September 30, 2011.

As of September 30, 2011, Vanguard held $10.0 million in total available-for-sale investments in auction rate securities (“ARS”) backed by student loans, which are included in investments in securities on the accompanying condensed consolidated balance sheets. These ARS are accounted for as long-term available for sale securities. The par value of the remaining interest in ARS was $10.0 million at September 30, 2011. Subsequent to September 30, 2011, the remaining $10.0 million of ARS were redeemed for cash at par.Accordingly, as of September 30, 2011, Vanguard reversed the $1.2 million ($0.7 million, net of taxes) temporary impairment previously included in accumulated other comprehensive income (loss) on the accompanying condensed consolidated balance sheets.

Cash and Cash Equivalents and Restricted Cash

       The carrying amounts reported for cash and cash equivalents and restricted cash approximate fair value because of the short-term maturity of these instruments.

Accounts Receivable and Accounts Payable

       The carrying amounts reported for accounts receivable and accounts payable approximate fair value because of the short-term maturity of these instruments.

Long-Term Debt

       The fair values of the 8.0% Senior Unsecured Notes, the 2010 term loan facility, the 7.750% Senior Notes and the 10.375% Senior Discount Notes as of September 30, 2011 were approximately $1,068.8 million, $788.7 million, $323.8 million and $13.9 million,respectively, based upon stated market prices.