Fair Value Measurements

12 Months Ended

Jun. 30, 2012

Fair Value Measurements [Abstract]

Fair Value Measurements

Note 6 — Fair Value Measurements

We have categorized our financial instruments into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3). In some cases, the inputs used to measure fair value might fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Refer to Note 1 for a description of each fair value measurement category.

The following presents our assets and liabilities measured at fair value on a recurring basis as of June 30, 2012 and 2011:

		Fair Value Measurements on a Recurring Basis at
		June 30, 2012
		Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities:
	U.S. treasury securities and obligations of the U.S. government,
	government agencies and authorities (a)	$	2,035		9,085		-	$	11,120
	U.S. Corporate bonds (a)		-		32,494		-		32,494
	Foreign Corporate bonds (a)		-		3,501		-		3,501
	Obligations of states, municipalities and political subdivisions (a)		-		5,234		-		5,234
	Equity securities (b)		1,437		-		-		1,437
	Mutual funds (c)		5,083		-		-		5,083
Derivatives:
	Foreign exchange forwards (d)		-		713		-		713
Liabilities:
Derivatives
	Foreign exchange forwards (d)		-		329		-		329

		Fair Value Measurements on a Recurring Basis at
		June 30, 2011
		Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities:
	U.S. treasury securities and obligations of the U.S. government,
	government agencies and authorities (a)	$	2,043	$	31,304	$	-	$	33,347
	Corporate bonds (a)		-		46,085		-		46,085
	Obligations of states, municipalities and political subdivisions (a)		-		14,620		-		14,620
	Equity securities (b)		1,383		-		-		1,383
	Mutual funds (c)		7,138		-		-		7,138
Derivatives:									-
	Foreign exchange forwards (d)		-		2,665		-		2,665
									-
Liabilities:									-
Derivatives:									-
	Foreign exchange forwards (d)	$	-	$	137	$	-	$	137

• These assets are included in short-term investments or other assets on the consolidated balance sheet. See Note 3 for the classification of all fixed income securities as current or non-current.
• These assets are included in short-term investments or other assets on the consolidated balance sheet.
• These assets are included in other assets on the consolidated balance sheet.
• These derivative investments are included in other current assets or accounts payable, accrued liabilities and deferred income on the consolidated balance sheet. See Note 7 for further information on our derivative investments.

We recorded an immaterial loss and a gain of $0.6 million, respectively, for the fiscal years ended June 30, 2012 and 2011, in general and administrative expenses in the consolidated statements of operations related to the changes in the fair value of our financial instruments for foreign exchange forward contracts and foreign exchange options accounted for as foreign currency hedges, which were still held at June 30, 2012 and 2011, respectively. No material gain or loss was recorded in the consolidated statements of operations for available-for-sale securities still held at fiscal years ended June 30, 2012 and 2011.

We generally use third-party pricing services in determining the fair value of our investments. The pricing services use observable inputs when available. These values take into account recent market activity as well as other market observable data such as interest rate, spread and prepayment information. We perform various procedures to evaluate the accuracy of the fair values provided by the third-party service. These procedures include obtaining a detailed understanding of the models, inputs, and assumptions used in developing prices provided by the pricing services. This understanding includes a review of the vendors' Service Organization Controls report and as necessary discussions with valuation resources at the pricing services. We obtain the information necessary to assert the model, inputs and assumptions used comply with U.S. GAAP, including disclosure requirements.

We independently review the listing of Level 1 financial assets in the portfolio, including U.S. Treasury securities, equity securities and mutual funds securities, and agree the price received from the third-party pricing service to the closing stock price from a national securities exchange, and on a sample basis.

We also independently review our Level 2 and Level 3 financial assets and liabilities, which include derivative investments, corporate bonds and certain obligations of government agencies or states, municipalities and political subdivisions, pooled funds and mutual funds, limited partnerships and insurance contracts. Corporate bonds and certain obligations of government agencies or states, municipalities and political subdivisions are valued based on yields currently available on comparable securities of issuers with similar credit ratings. Derivative investments are valued using a quoted value from the counterparty for each contract. The quoted price we receive is a Level 2 valuation based on observable quotes in the marketplace for the underlying currency. We use these underlying values to estimate amounts that would be paid or received to terminate the contracts at the reporting date based on current market prices for the underlying currency. See Note 10 for a description of the valuation methodologies used for Level 2 and Level 3 plan assets and liabilities by category.

We perform additional procedures to validate and confirm the accuracy of the prices provided by the pricing service. Stale prices and significant price movements are monitored and investigated. If the price changes significantly, the fluctuation is reviewed for reasonableness based on market factors and adjusted if deemed necessary by management.

If we determine that a price provided to us is outside our expectation, we will further examine the price, including having follow-up discussions with the pricing service. If we conclude that a price is not valid, we will adjust the price with the appropriate documentation and approvals by management. These adjustments do not occur frequently and have not historically been material.

The availability of observable market data is monitored to assess the appropriate classification of financial instruments within the fair value hierarchy. Changes in economic conditions or model-based valuation techniques may require the transfer of financial instruments from one fair value level to another. In such instances, the transfer is reported at the beginning of the reporting period. There were no transfers between Levels 1, 2 or 3 during the year ended June 30, 2012. We also monitor the value of the investments for other-than-temporary impairment on a quarterly basis. No other-than-temporary impairments occurred during the fiscal year ended June 30, 2012.