Fair Value Measurements

12 Months Ended

Dec. 31, 2011

Fair Value Measurements [Abstract]

Fair Value Measurements

(3) Fair Value Measurements

Assets and liabilities recorded at fair value in the audited Consolidated Balance Sheets are categorized based upon a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:

Level 1 — Observable inputs such as quoted prices in active markets: The Company’s Level 1 securities consist of debt securities of government sponsored entities, equity index funds, money market funds and U.S. Treasury securities. The Company’s Level 1 securities also consisted of federally insured corporate bonds at December 31, 2010. Level 1 securities are included in cash equivalents, short-term investments, long-term investments and investments on deposit for licensure in the accompanying audited Consolidated Balance Sheets. These securities are actively traded and therefore the fair value for these securities is based on quoted market prices on one or more securities exchanges.

Level 2 — Inputs other than quoted prices in active markets that are either directly or indirectly observable: The Company’s Level 2 securities consist of certificates of deposit, commercial paper, corporate bonds and municipal bonds and are included in cash equivalents, short-term investments, long-term investments and investments on deposit for licensure in the accompanying audited Consolidated Balance Sheets. The Company’s investments in securities classified as Level 2 are traded frequently though not necessarily daily. Fair value for these securities, except certificates of deposit, is determined using a market approach based on quoted prices for similar securities in active markets or quoted prices for identical securities in inactive markets. Fair value of certificates of deposit is determined using a discounted cash flow model comparing the stated rates of the certificates of deposit to current market interest rates for similar instruments.

Level 3 — Unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions: The Company’s Level 3 securities consist of auction rate securities issued by student loan corporations established by various state governments. The auction events for these securities failed during early 2008 and have not resumed. Therefore, the estimated fair values of these securities have been determined utilizing an income approach, specifically discounted cash flow analyses. These analyses consider among other items, the creditworthiness of the issuer, the timing of the expected future cash flows, including the final maturity associated with the securities, and an assumption of when the next time the security is expected to have a successful auction. These securities were also compared, when possible, to other observable and relevant market data. As the timing of future successful auctions, if any, cannot be predicted, auction rate securities are classified as long-term investments in the accompanying audited Consolidated Balance Sheets.

The Company has not elected to apply the fair value option available under current guidance for any financial assets and liabilities that are not required to be measured at fair value. Transfers between levels, as a result of changes in the inputs used to determine fair value, are recognized as of the beginning of the reporting period in which the transfer occurs. There were no transfers between levels for the years ended December 31, 2011 and 2010.

Assets

The Company’s assets measured at fair value on a recurring basis at December 31, 2011 were as follows:

							Fair Value Measurements at Reporting Date Using
	Fair Value of Cash Equivalents		Fair Value of Available-for- Sale Securities		Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Auction rate securities	$	—	$	11,551	$	11,551	$	—	$	—	$	11,551
Certificates of deposit		105,017		118,094		223,111		—		223,111		—
Commercial paper		26,617		172,564		199,181		—		199,181		—
Corporate bonds		—		566,724		566,724		—		566,724		—
Debt securities of government sponsored entities		—		290,543		290,543		290,543		—		—
Equity index funds		—		40,843		40,843		40,843		—		—
Money market funds		404,757		15,067		419,824		419,824		—		—
Municipal bonds		3,121		399,026		402,147		—		402,147		—
U.S. Treasury securities		—		26,124		26,124		26,124		—		—
Total assets measured at fair value	$	539,512	$	1,640,536	$	2,180,048	$	777,334	$	1,391,163	$	11,551

The Company’s assets measured at fair value on a recurring basis at December 31, 2010 were as follows:

							Fair Value Measurements at Reporting Date Using
	Fair Value of Cash Equivalents		Fair Value of Available-for- Sale Securities		Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Auction rate securities	$	—	$	21,293	$	21,293	$	—	$	—	$	21,293
Certificates of deposit		137,215		13,651		150,866		—		150,866		—
Commercial paper		34,742		14,793		49,535		—		49,535		—
Corporate bonds		1,002		237,916		238,918		—		238,918		—
Debt securities of government sponsored entities		—		332,051		332,051		332,051		—		—
Federally insured corporate bonds		—		21,454		21,454		21,454		—		—
Money market funds		564,112		20,315		584,427		584,427		—		—
Municipal bonds		3,764		300,817		304,581		—		304,581		—
U.S. Treasury securities		1,000		21,721		22,721		22,721		—		—
Total assets measured at fair value	$	741,835	$	984,011	$	1,725,846	$	960,653	$	743,900	$	21,293

The following table presents the changes in the Company’s assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3), for the years ended December 31, 2011 and 2010:

	2011			2010
Balance at beginning of period	$	21,293		$	58,003
Total net realized loss included in investment income and other		(162	)		(290	)
Total net unrealized gain included in other comprehensive income		358			2,790
Sales		—			(12,000	)
Calls by issuers		(9,938	)		(27,210	)
Balance at end of period	$	11,551		$	21,293

During the years ended December 31, 2011 and 2010, proceeds from the sale or call of certain investments in auction rate securities, the net realized (loss) gain and the amount of prior period unrealized losses reclassified from accumulated other comprehensive income on a specific-identification basis were as follows (excludes the impact of the forward contract discussed below):

	December 31,
	2011			2010
Proceeds from sale or call of auction rate securities	$	9,938		$	39,210
Total net realized (loss) gain recorded in investment income and other		(162	)		875
Unrealized loss reclassified from accumulated other comprehensive income, included in net realized (loss) gain above		(162	)		(290	)

During the fourth quarter of 2008, the Company entered into a forward contract with a registered broker-dealer, at no cost, which provided the Company with the ability to sell certain auction rate securities to the registered broker-dealer at par within a defined timeframe, beginning June 30, 2010. These securities were classified as trading securities because the Company did not intend to hold these securities until final maturity. Trading securities are carried at fair value with changes in fair value recorded in earnings. The value of the forward contract was estimated using a discounted cash flow analysis taking into consideration the creditworthiness of the counterparty to the agreement. The forward contract was included in other long-term assets. As of June 30, 2010, all of the remaining trading securities under the terms of this forward contract were repurchased by the broker-dealer; therefore, the forward contract expired and a realized loss of $1,165 was recorded during the year ended December 31, 2010, which was largely offset by recovery of the related auction rate securities at par.

Liabilities

The 7.5% Senior Notes (see Note 9) are carried at face value in the accompanying audited Consolidated Balance Sheets. The estimated fair value of the 7.5% Senior Notes is determined based upon a quoted market price. As of December 31, 2011, the fair value of the borrowings under the 7.5% Senior Notes was $414,048 compared to the face value of $400,000. The 7.5% Senior Notes were issued November 16, 2011.

The 2.0% Convertible Senior Notes (see Note 9) are carried at cost plus the value of the accreted discount in the accompanying audited Consolidated Balance Sheets, or $256,995 and $245,750 as of December 31, 2011 and 2010, respectively. The estimated fair value of the 2.0% Convertible Senior Notes is determined based upon a quoted market price. As of December 31, 2011 and 2010, the fair value of the borrowings under the 2.0% Convertible Senior Notes was $371,005 and $303,550, respectively, compared to the face value of $259,880 and $260,000, respectively.