FAIR VALUE MEASUREMENTS |
(11) FAIR VALUE
MEASUREMENTS
The Company
measures certain financial assets and liabilities at fair value on
a recurring basis, including available-for-sale fixed income
securities and foreign currency derivatives. The tables below
present the fair value of these financial assets and liabilities
determined using the following input levels at June 30, 2012
and December 31, 2011.
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Fair Value Measurements
at June 30, 2012 |
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Total |
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Quoted Price in
Active
Markets
for Identical Assets
(Level 1) |
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Significant Other
Observable Inputs
(Level 2) |
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Significant
Unobservable
Inputs
(Level 3) |
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Assets:
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Cash and cash
equivalents
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Overnight
deposits
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$ |
62,337 |
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$ |
62,337 |
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$ |
0 |
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$ |
0 |
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Money market
instruments
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115,420 |
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0 |
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115,420 |
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0 |
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Total cash and cash
equivalents
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$ |
177,757 |
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$ |
62,337 |
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$ |
115,420 |
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$ |
0 |
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Available-for-sale
securities
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Short-term
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Certificates of
deposit
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$ |
45,684 |
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$ |
0 |
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$ |
45,684 |
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$ |
0 |
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Commercial paper
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49,327 |
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0 |
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49,327 |
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0 |
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Corporate notes
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55,126 |
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0 |
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55,126 |
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Corporate
securities
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66,143 |
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0 |
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66,143 |
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0 |
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U.S. Government agency
securities
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8,549 |
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0 |
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8,549 |
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0 |
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Long-term
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Certificates of
deposit
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9,802 |
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0 |
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9,802 |
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0 |
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Corporate
securities
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40,049
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0 |
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40,049
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Corporate notes
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37,966 |
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0 |
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37,966
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0 |
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U.S. Government agency
securities
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34,119 |
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0 |
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34,119 |
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0 |
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Greek government-issued
bonds
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34 |
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0 |
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34 |
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0 |
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Total available-for-sale
securities
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$ |
346,799 |
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$ |
0 |
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$ |
346,799 |
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$ |
0 |
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Restricted investments
(1)
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5,717 |
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0 |
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5,717 |
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Nonqualified Deferred
Compensation Plan assets (2)
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4,075 |
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0 |
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4,075 |
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0 |
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Forward foreign currency
exchange contract asset (3)
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7,048 |
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0 |
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7,048 |
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0 |
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Total assets
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$ |
541,396 |
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$ |
62,337 |
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$ |
479,059 |
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$ |
0 |
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Liabilities:
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Nonqualified Deferred
Compensation Plan liability (4)
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$ |
13,311 |
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$ |
9,236 |
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$ |
4,075 |
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$ |
0 |
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Forward foreign currency
exchange contract liability (3)
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|
980 |
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0 |
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|
980 |
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0 |
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Contingent acquisition
consideration payable (5)
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34,673 |
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0 |
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0 |
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34,673 |
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Asset retirement obligation
(6)
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3,357 |
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0 |
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0 |
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3,357 |
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Total
liabilities
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$ |
52,321 |
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$ |
9,236 |
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$ |
5,055 |
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$ |
38,030 |
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Fair Value Measurements
at December 31, 2011 |
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Total |
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Quoted Price in
Active
Markets
for Identical Assets
(Level 1) |
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|
Significant Other
Observable Inputs
(Level 2) |
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Significant
Unobservable
Inputs
(Level 3) |
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Assets:
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Cash and cash
equivalents
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Overnight
deposits
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$ |
44,212 |
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$ |
44,212 |
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$ |
0 |
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$ |
0 |
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Money market
instruments
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2,060 |
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0 |
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2,060 |
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0 |
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Total cash and cash
equivalents
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$ |
46,272 |
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$ |
44,212 |
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$ |
2,060 |
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$ |
0 |
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Available-for-sale
securities
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Short-term
|
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|
|
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Certificates of
deposit
|
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$ |
38,564 |
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$ |
0 |
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$ |
38,564 |
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$ |
0 |
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Commercial paper
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|
24,721 |
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0 |
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24,721 |
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0 |
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Corporate
securities
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|
85,535 |
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0 |
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85,535 |
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0 |
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Long-term
|
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Certificates of
deposit
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17,191 |
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0 |
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17,191 |
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0 |
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Corporate
securities
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44,112 |
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0 |
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44,112 |
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0 |
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U.S. Government agency
securities
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32,890 |
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0 |
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32,890 |
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0 |
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Greek government-issued
bonds
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|
192 |
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0 |
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|
192 |
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0 |
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Total available-for-sale
securities
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$ |
243,205 |
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$ |
0 |
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$ |
243,205 |
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$ |
0 |
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Nonqualified Deferred
Compensation Plan assets (2)
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3,505 |
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0 |
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3,505 |
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0 |
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Forward foreign currency
exchange contract asset (3)
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6,682 |
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0 |
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6,682 |
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0 |
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Total assets
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$ |
299,664 |
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$ |
44,212 |
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$ |
255,452 |
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$ |
0 |
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Liabilities:
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Nonqualified Deferred
Compensation Plan liability (4)
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$ |
9,450 |
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$ |
5,945 |
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$ |
3,505 |
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$ |
0 |
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Forward foreign currency
exchange contract liability (3)
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|
220 |
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0 |
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|
220 |
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0 |
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Contingent acquisition
consideration payable (5)
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38,614 |
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0 |
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0 |
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38,614 |
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Asset retirement obligation
(6)
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2,991 |
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|
0 |
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|
0 |
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2,991 |
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Total
liabilities
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$ |
51,275 |
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$ |
5,945 |
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$ |
3,725 |
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$ |
41,605 |
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(1) |
At June 30, 2012, 63%
and 37% of the restricted investments were included in other assets
and other current assets, respectively. The restricted investments
secure the Company’s irrevocable standby letters of credit
obtained in connection with the Company’s new corporate
facility lease agreements and certain other commercial
arrangements. See Note 26 to the Consolidated Financial Statements
included in the Company’s Annual Report on Form 10-K for the
year ended December 31, 2011 for additional
discussion. |
(2) |
At June 30, 2012 and
December 31, 2011, 95% and 96%, respectively, of the
Nonqualified Deferred Compensation Plan assets balance were
included in other assets and the remainder of the balance was
included in other current assets on the Condensed Consolidated
Balance Sheets. |
(3) |
See Note 9 for further
information regarding the derivative instruments. |
(4) |
At June 30, 2012 and
December 31, 2011, 93% of the Nonqualified Deferred
Compensation Plan liability balance was included in other long-term
liabilities and the remainder was included in accounts payable and
accrued liabilities on the Condensed Consolidated Balance
Sheets. |
(5) |
At June 30, 2012 and
December 31, 2011, 83% and 86%, respectively, of the
contingent acquisition consideration payable was included in other
long-term liabilities and 17% and 14%, respectively, was included
in accounts payable and accrued liabilities. |
(6) |
At June 30, 2012 and
December 31, 2011, the asset retirement obligation liability
was included in other long-term liabilities. |
The
Company’s level 2 securities are valued using third-party
pricing sources, which generally use observable market prices,
interest rates and yield curves observable at commonly quoted
intervals of similar assets as observable inputs for pricing. The
Company validates the prices provided by its third-party pricing
services by understanding the models used, obtaining market values
from other pricing sources, analyzing pricing data in certain
instances and confirming those securities traded in active markets.
Due to the continued volatility associated with market conditions
in Greece and reduced trading activity in its sovereign debt, the
Company classified its Greek government-issued bonds as level 2 on
June 30, 2012 and December 31, 2011. See Note 5 for
further information regarding the Company’s financial
instruments.
The
Company’s level 3 liabilities are estimated using a
probability-based income approach utilizing an appropriate discount
rate. Subsequent changes in the fair value of the contingent
acquisition consideration payable, resulting from the revision of
key assumptions, will be recorded in intangible asset amortization
and contingent consideration on the Condensed Consolidated
Statements of Comprehensive Loss.
During the
three and six months ended June 30, 2012, the fair value of
the contingent acquisition consideration payable increased by $1.2
million and decreased $3.9 million, respectively, due to changes in
estimated probability and assumed timing of attaining certain
milestones. Key assumptions used by management to estimate the fair
value of contingent acquisition consideration payable include
assumed probabilities, timing of when a milestone may be attained
and assumed discount periods and rates.
See Notes 5, 6
and 7 to the Consolidated Financial Statements included in the
Company’s Annual Report on Form 10-K for the year ended
December 31, 2011 for additional discussion related to
business acquisitions and contingent acquisition consideration
payable.
|