Quarterly report pursuant to Section 13 or 15(d)

Note 14 - Fair Value Measurements

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Note 14 - Fair Value Measurements
 9 Months Ended
Mar. 31, 2012
Fair Value, Measurement Inputs, Disclosure [Text Block]
(14)   Fair Value Measurements

We determine fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value is calculated based on assumptions that market participants use in pricing the asset or liability, and not on assumptions specific to the Company. In addition, the fair value of liabilities includes consideration of non-performance risk including our own credit risk. Each fair value measurement is reported in one of three levels, determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

 
Level 1
Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.

 
Level 2
Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

 
Level 3
Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.

The following section describes the valuation methodologies we use to measure different financial assets and liabilities at fair value.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents our assets and liabilities measured at fair value on a recurring basis at March 31, 2012 and June 30, 2011 (in thousands):

March 31, 2012
 
   
Level 1
   
Level 2
   
Level 3
   
Balance
 
Cash equivalents
  $ 88,540       -       -     $ 88,540  
Available-for-sale securities
    -       11,259       -       11,259  
Total
  $ 88,540     $ 11,259     $ -     $ 99,799  

June 30, 2011
 
   
Level 1
   
Level 2
   
Level 3
   
Balance
 
Cash equivalents
  $ 94,910       -       -     $ 94,910  
Available-for-sale securities
    -       12,909       -       12,909  
Total
  $ 94,910     $ 12,909     $ -     $ 107,819  

Cash equivalents consist of money market accounts and mutual funds in U.S. government and agency fixed income securities. We use quoted prices in active markets for identical assets or liabilities to determine fair value. At March 31, 2012 and June 30, 2011, $15.4 million and $16.4 million, respectively, of the cash equivalents were restricted, and classified as a long-term asset.

At March 31, 2012, available-for-sale securities consist of $10.1 million in U.S. municipal bonds and $1.2 million of corporate bonds, and at June 30, 2011, available-for-sale securities consisted of $12.9 million in U.S. municipal bonds, all with maturities of less than two years. The bonds are rated A/A2 or better by S&P/Moodys respectively. As of March 31, 2012 and March 31, 2011, there were no material gross unrealized gains or losses on available-for-sale securities.

As of March 31, 2012 and June 30, 2011, the contractual maturities of our available-for-sale investments were as follows:

March 31, 2012
 
   
Cost
   
Estimated Fair Value
 
Due in one year or less
  $ 9,105     $ 9,213  
Due after one year through five years
  $ 2,023     $ 2,046  
                 
June 30, 2011
 
   
Cost
   
Estimated Fair Value
 
Due in one year or less
  $ 7,311     $ 7,393  
Due after one year through five years
  $ 5,428     $ 5,517  

No investments have been in a continuous loss position for more than one year, and no other-than-temporary impairments were recognized. Also see Note 4, "Restricted Cash and Investments", and Note 5, "Marketable Securities".

Assets and Liabilities Measured at Fair Value on a Non-recurring Basis

We measure certain assets at fair value on a non-recurring basis. These assets are recognized at fair value when they are deemed to be impaired. During the nine month periods ended March 31, 2012 and  2011, we did not record any impairments on those assets required to be measured at fair value on a non-recurring basis.