MULTIPLE-ELEMENT REVENUE ARRANGEMENT

3 Months Ended

Jun. 30, 2011

MULTIPLE-ELEMENT REVENUE ARRANGEMENT [Abstract]

6. REVENUE ARRANGEMENTS WITH MULTIPLE DELIVERABLES

In October 2009, the FASB issued an update to amend Revenue Recognition in the Codification. This update removed the fair value criterion from the separation criteria for multiple deliverables arrangements. It also replaces references to “fair value” with “selling price” to distinguish from the fair value measurements required under Fair Value Measurements and Disclosures in the Codification, provides a hierarchy that entities must use to estimate the selling price, eliminates the use of the residual method for allocation, and expands the ongoing disclosure requirements. This update was effective for us beginning April 1, 2011 and we adopted it on a prospective basis.

Prior to adopting this update, we generally accounted for arrangements with multiple deliverables (products and services bundled together) as one unit of accounting, as we could not establish reliable evidence of the fair value of the undelivered services when the products were delivered. Revenue from these bundled arrangements was recognized when the services were complete and we received an acceptance certificate from the customer. The update to Revenue Recognition in the Codification removed the requirement to establish reliable evidence of fair value of undelivered items for these arrangements. Therefore, multiple deliverables arrangements whereby we delivered the product to our customers and subsequently provide services meet the criteria to be accounted for as separate units of accounting, as delivered item(s), or product(s), have value to the customer on a stand-alone basis, and delivery of the services is probable and substantially under our control.

For bundled arrangements entered into after March 31, 2011, we allocated the total arrangement consideration to the deliverables based on an estimated selling price of our products and services. We determined the estimated selling price using cost plus a reasonable margin for each deliverable, which was based on our established policies for providing customers with quotes, as well as historical gross margins for our products and services. Revenue for the sales of products is generally recognized upon delivery to the customers and revenue for the services is generally recognized when the services are complete, which normally occurs within 90 days after the products are delivered to the customer.

Summarized below is what our reported revenues and earnings before tax for the quarter ended June 30, 2011 would have been had we continued to account for these multiple deliverables arrangements as a single unit of accounting and deferred the revenue until the services were complete (in thousands):

	Total revenues		Total costs and expenses		Earnings before provision for tax
As reported	$	211,544	$	205,261	$	6,283
Pro forma	$	206,645	$	201,163	$	5,482