ARS not as bad as we expected.....
At May 31, 2010, the fair value of our auction rate securities was estimated at $5.1 million based on a valuation by Houlihan Smith & Company, Inc. which reflects a temporary unrealized loss of $416,165. We have concluded that the unrealized losses on these investments are temporary because (i) we believe that the decline in market value and absence of liquidity that has occurred is due to general market conditions, (ii) the auction rate securities continue to be of a high credit quality and interest is paid as due and (iii) we do not intend to sell our auction rate securities before we are able to recover our cost basis and it is more likely than not that we will not have to sell our auction rate securities before recovery of our cost basis. Since this valuation adjustment is deemed to be temporary, it did not affect our earnings for the fiscal years ended May 31, 2010 and 2009.
