Fair Value Measurements

3 Months Ended

Apr. 01, 2012

Fair Value Measurements [Abstract]

Fair Value Measurements

Note 3. Fair Value Measurements

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Our financial assets and liabilities subject to fair value measurement provisions as of April 1, 2012 comprised the following (in thousands):

	Level 1		Level 2			Level 3		Fair Value at April  1, 2012
Cash and cash equivalents	$	85,524	$	—		$	—	$	85,524
Money market funds		17,173		—			—		17,173
Certificates of deposit		—		3,643			—		3,643
Stock		203		—			—		203
Derivative instruments – assets		—		799			—		799
Total assets at fair value	$	102,900	$	4,442		$	—	$	107,342
	Level 1		Level 2			Level 3		Fair Value at April 1, 2012
Derivative instruments – liabilities	$	—	$	(1,121	)	$	—	$	(1,121	)
Total liabilities at fair value	$	—	$	(1,121	)	$	—	$	(1,121	)

Our financial assets and liabilities subject to fair value measurement provisions as of December 31, 2011 comprised the following (in thousands):

	Level 1		Level 2			Level 3		Fair Value at December  31, 2011
Cash and cash equivalents	$	95,278	$			$		$	95,278
Money market funds		15,275		—			—		15,275
Certificates of deposit		—		3,555			—		3,555
Stock		170		—			—		170
Derivative instruments – assets		—		985			—		985
Total assets at fair value	$	110,723	$	4,540		$	—	$	115,263
	Level 1		Level 2			Level 3		Fair Value at December 31, 2011
Derivative instruments – liabilities	$	—	$	(1,801	)	$	—	$	(1,801	)
Total liabilities at fair value	$	—	$	(1,801	)	$	—	$	(1,801	)

Our Level 1 financial instrument values are based on quoted market prices for identical assets in active markets. Our Level 2 financial instrument values are based on quoted prices in active markets for similar assets, which we use to value our certificates of deposit, or comparable sales, such as quoted market rates for similar contracts. Specifically, we obtain current pricing from the issuing bank for identical item purchased on the last business day of our reporting period. Level 3 financial instrument values refer to fair values using unobservable inputs that are not corroborated by market data.

There were no transfers between Level 1 and Level 2 assets and liabilities in the three months ended April 1, 2012.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

All other nonfinancial assets and liabilities measured at fair value in the financial statements on a nonrecurring basis are subject to fair value measurements and disclosures. Nonfinancial assets and liabilities included in our condensed consolidated balance sheets and measured on a nonrecurring basis consist of goodwill and long-lived assets, including other acquired intangibles. Goodwill and long-lived assets are measured at fair value to test for and measure impairment, if any, at least annually for goodwill or when necessary for both goodwill and long-lived assets. See Note 16 – Goodwill and other Long-Lived Assets for details of our impairment analysis.

The following fair value hierarchy table presents information about our goodwill assets that were measured at fair value on a non-recurring basis at April 1, 2012:

Goodwill	Level 1		Level 2		Level 3		Fair Value at April 1, 2012
Voice solutions supply chain reporting unit	$	—	$	—	$	115,757	$	115,757
Voice solutions healthcare reporting unit						9,480		9,480
Intermec global solutions reporting unit						3,348		3,348
Total goodwill at fair value	$	—	$	—	$	128,585	$	128,585

The following fair value hierarchy table presents information about our goodwill assets that were measured at fair value on a non-recurring basis at December 31, 2011:

Goodwill	Level 1		Level 2		Level 3		Fair Value at December  31, 2011
Voice solutions supply chain reporting unit	$	—	$	—	$	130,682	$	130,682
Voice solutions healthcare reporting unit						9,480		9,480
Intermec global solutions reporting unit						3,348		3,348
Total goodwill at fair value	$	—	$	—	$	143,510	$	143,510

A goodwill impairment was recorded in the amount of $14.9 million in the first quarter of 2012 against the VSC reporting unit.

The following table presents quantitative information, based on certain empirical data with respect to level 3 fair value measurements for assets and liabilities measured at fair value on a non-recurring basis at April 1, 2012:

Reporting Unit	Fair Value		Valuation Technique(s)	Unobservable Input(s)
Voice Solutions Supply Chain
Goodwill	$	115,757	Income Approach	Financial Forecast
				Terminal Growth Rate
				Capitalization Rate
			Discounted Cash Flow Method	Weighted Average Cost of Capital
				Company Specific Risk Premium
				Expected Cash Flow
			Market Approach	Financial Forecast
				Public Company Multiples
Voice Solutions Healthcare
Goodwill	$	9,480	Income Approach	Financial Forecast
				Terminal Growth Rate
				Capitalization Rate
			Discounted Cash Flow Method	Weighted Average Cost of Capital
				Company Specific Risk Premium
				Expected Cash Flow
Intermec Global Solutions
Goodwill	$	3,348	Income Approach	Financial Forecast
				Terminal Growth Rate
				Capitalization Rate
			Discounted Cash Flow Method	Weighted Average Cost of Capital
				Company Specific Risk Premium
				Expected Cash Flow
Total Goodwill	$	128,585

Fair Value of Financial Instruments

The estimated fair values of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and payroll and related expenses at April 1, 2012 and December 31, 2011, approximate their carrying values due to their short-term nature. The fair value of long-term debt at April 1, 2012 approximates its carrying value.