FAIR VALUE MEASUREMENTS

12 Months Ended

Feb. 29, 2012

FAIR VALUE MEASUREMENTS [Abstract]

FAIR VALUE MEASUREMENTS

3. FAIR VALUE MEASUREMENTS

The following table summarizes the composition of the Company's investments at February 29, 2012 and February 28, 2011 (in thousands):

								Classification on Balance Sheet
February 29, 2012	Cost		Gross Unrealized Losses			Aggregate Fair value		Cash		Long-Term Investments
Auction rate securities	$	27,775	$	(2,095	)	$	25,680	$	-	$	25,680
Money market funds		16,834		-			16,834		16,834		-
	$	44,609	$	(2,095	)	$	42,514	$	16,834	$	25,680

								Classification on Balance Sheet
February 28, 2011	Cost		Gross Unrealized Losses			Aggregate Fair value		Cash		Long-Term Investments
Auction rate securities	$	31,400	$	(1,910	)	$	29,490	$	-	$	29,490
Money market funds		134,007		-			134,007		134,007		-
	$	165,407	$	(1,910	)	$	163,497	$	134,007	$	29,490

As of February 29, 2012, the Company held approximately $25.7 million (net of $2.1 million in gross unrealized losses) of investments in auction rate securities with maturities ranging from 9 to 29 years, all classified as available-for-sale. Auction rate securities are long-term variable rate bonds tied to short-term interest rates that were, until February 2008, reset through a “Dutch auction” process. As of February 29, 2012, 100 percent of the Company's auction rate securities were “AAA” rated by one or more of the major credit rating agencies.

The cost basis and fair values of available-for-sale securities at February 29, 2012 by contractual maturity are shown below (in thousands):

	Cost		Estimated Fair Value
Due in one year or less	$	-	$	-
Due in one year through five years		-		-
Due in five years through ten years		6,100		5,614
Due in ten through twenty years		5,450		5,056
Due in over twenty years		16,225		15,010
Total	$	27,775	$	25,680

Expected maturities of securities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without prepayment penalties.

The following tables detail the fair value measurements within the three levels of fair value hierarchy of the Company's financial assets, including investments, equity securities, cash surrender value of life insurance policies and cash equivalents at February 29, 2012 and February 28, 2011 (in thousands):

	Total Fair Value at 2/29/2012		Level 1		Level 2		Level 3
Assets:
Auction rate securities	$	25,680	$	-	$	-	$	25,680
Money market funds		16,833		16,833		-		-
Other assets-cash surrender value		1,650		-		1,650		-
Total Assets	$	44,163	$	16,833	$	1,650	$	25,680
Liabilities:
Contingent consideration	$	4,251	$	-	$	-	$	4,251
Total Liabilities	$	4,251	$	-	$	-	$	4,251

	Total Fair Value at 2/28/2011		Level 1		Level 2		Level 3
Assets:
Auction rate securities	$	29,490	$	-	$	-	$	29,490
Money market funds		134,007		134,007		-		-
Other assets-cash surrender value		1,666		-		1,666		-
Total Assets	$	165,163	$	134,007	$	1,666	$	29,490
Liabilities:
Contingent consideration	$	2,778	$	-	$	-	$	2,778
Total Liabilities	$	2,778	$	-	$	-	$	2,778

At February 29, 2012 and February 28, 2011, the Company grouped money market funds using a Level 1 valuation because market prices are readily available. Level 2 financial assets and liabilities represent the fair value of cash surrender value of life insurance policies. The assets grouped for Level 3 valuation were auction rate securities consisting of AAA rated securities mainly collateralized by student loans guaranteed by the U.S. Department of Education under the Federal Family Education Loan Program (“FFELP”), as well as auction rate preferred securities ($6.1 million at par) which are AAA rated and part of a closed end fund that must maintain an asset ratio of 2 to 1. Level 3 liabilities consist of contingent consideration on acquisitions. See Note 15 - Commitments and Contingencies, for further discussion on contingent consideration arrangements, including fair value inputs.

When a determination is made to classify a financial instrument within Level 3, the determination is based upon the lack of significance of the observable parameters to the overall fair value measurement. However, the fair value determination for Level 3 financial instruments may consider some observable market inputs.

The following table reflects the activity for the Company's major classes of assets and liabilities (contingent acquisition expense) measured at fair value using Level 3 inputs (in thousands):

Assets:	Three Months Ended February 29, 2012			Twelve Months Ended February 29, 2012
Balance at beginning of period	$	26,262		$	29,490
Transfers out to Level 2 (Auction Rate Securities with market inputs)		-			(1,100	)
Sales of Level 3 investments		(478	)		(2,528	)
Unrealized losses included in accumulated other comprehensive income		(104	)		(182	)
Balance as of February 29, 2012	$	25,680		$	25,680

Liabilities:	Three Months Ended February 29, 2012			Twelve Months Ended February 29, 2012
Balance at beginning of period	$	8,632		$	2,778
Level 3 liabilities acquired		-			8,800
Level 3 liabilities settled		(4,519	)		(5,909	)
Total (gains) and losses:
Included in earnings (realized)		126			(1,365	)
Unrealized losses (gains) included in accumulated other comprehensive income		12			(53	)
Balance as of February 29, 2012	$	4,251		$	4,251

The par (invested principal) value of the auction rate securities associated with failed auctions will not be accessible to the Company until a successful auction occurs, a buyer is found outside of the auction process, the securities are called or the underlying securities have matured. In light of these liquidity constraints, the Company performed a valuation analysis to determine the estimated fair value of these investments. The fair value of these investments was based on a trinomial discount model. This model considers the probability of three potential occurrences for each auction event through the maturity date of the security. The three potential outcomes for each auction are (i) successful auction/early redemption, (ii) failed auction and (iii) issuer default. Inputs in determining the probabilities of the potential outcomes include, but are not limited to, the security's collateral, credit rating, insurance, issuer's financial standing, contractual restrictions on disposition and the liquidity in the market. The fair value of each security was then determined by summing the present value of the probability weighted future principal and interest payments determined by the model. The discount rate was determined using a proxy based upon the current market rates for successful auctions within the AAA-rated auction rate securities market. The expected term was based on management's estimate of future liquidity. The illiquidity discount was based on the levels of federal insurance or FFELP backing for each security as well as considering similar preferred stock securities ratings and asset backed ratio requirements for each security.

As a result, as of February 29, 2012, the Company recorded an estimated cumulative unrealized loss of $2.0 million (net of taxes) related to the temporary impairment of the auction rate securities, which was included in accumulated other comprehensive income within shareholders' equity. The Company deemed the loss to be temporary because the Company does not plan to sell any of the auction rate securities prior to maturity at an amount below the original purchase value and, at this time, does not deem it probable that it will receive less than 100 percent of the principal and accrued interest from the issuer. Further, the credit ratings of auction rate securities held by the Company remain at AAA levels. The Company continues to liquidate investments in auction rate securities as opportunities arise. In fiscal 2012, $3.6 million of such investments were liquidated at par in connection with issuer calls and redemptions.

The Company does not believe it will be necessary to access these investments to support current working capital requirements. However, the Company may be required to record additional unrealized losses in other comprehensive income in future periods based on then current facts and circumstances. Specifically, if the credit rating of the security issuers deteriorates, or if active markets for such securities are not reestablished, the Company may be required to adjust the carrying value of these investments through impairment charges recorded in the consolidated statements of operations, and any such impairment adjustments may be material.