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FAIR VALUE MEASUREMENTS
6 Months Ended
Jun. 30, 2012
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.

 

     Fair Value Measurements at June 30, 2012  
     Total      Quoted Price in
Active Markets
for Identical Assets
(Level 1)
     Significant Other
Observable  Inputs
(Level 2)
     Significant
Unobservable
Inputs
(Level 3)
 

Assets:

           

Cash and cash equivalents

           

Overnight deposits

   $ 62,337       $ 62,337       $ 0       $ 0   

Money market instruments

     115,420         0         115,420         0   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total cash and cash equivalents

   $ 177,757       $ 62,337       $ 115,420       $ 0   
  

 

 

    

 

 

    

 

 

    

 

 

 

Available-for-sale securities

           

Short-term

           

Certificates of deposit

   $ 45,684       $ 0       $ 45,684       $ 0   

Commercial paper

     49,327         0         49,327         0   

Corporate notes

     55,126         0         55,126      

Corporate securities

     66,143         0         66,143         0   

U.S. Government agency securities

     8,549         0         8,549         0   

Long-term

           

Certificates of deposit

     9,802         0         9,802         0   

Corporate securities

    
40,049
  
     0        
40,049
  
  

Corporate notes

     37,966         0        
37,966
  
     0   

U.S. Government agency securities

     34,119         0         34,119         0   

Greek government-issued bonds

     34         0         34         0   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total available-for-sale securities

   $ 346,799       $ 0       $ 346,799       $ 0   
  

 

 

    

 

 

    

 

 

    

 

 

 

Restricted investments (1)

     5,717         0         5,717      

Nonqualified Deferred Compensation Plan assets (2)

     4,075         0         4,075         0   

Forward foreign currency exchange contract asset (3)

     7,048         0         7,048         0   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total assets

   $ 541,396       $ 62,337       $ 479,059       $ 0   
  

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities:

           

Nonqualified Deferred Compensation Plan liability (4)

   $ 13,311       $ 9,236       $ 4,075       $ 0   

Forward foreign currency exchange contract liability (3)

     980         0         980         0   

Contingent acquisition consideration payable (5)

     34,673         0         0         34,673   

Asset retirement obligation (6)

     3,357         0         0         3,357   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total liabilities

   $ 52,321       $ 9,236       $ 5,055       $ 38,030   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

     Fair Value Measurements at December 31, 2011  
     Total      Quoted Price in
Active Markets
for Identical Assets
(Level 1)
     Significant Other
Observable  Inputs
(Level 2)
     Significant
Unobservable
Inputs
(Level 3)
 

Assets:

           

Cash and cash equivalents

           

Overnight deposits

   $ 44,212       $ 44,212       $ 0       $ 0   

Money market instruments

     2,060         0         2,060         0   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total cash and cash equivalents

   $ 46,272       $ 44,212       $ 2,060       $ 0   
  

 

 

    

 

 

    

 

 

    

 

 

 

Available-for-sale securities

           

Short-term

           

Certificates of deposit

   $ 38,564       $ 0       $ 38,564       $ 0   

Commercial paper

     24,721         0         24,721         0   

Corporate securities

     85,535         0         85,535         0   

Long-term

           

Certificates of deposit

     17,191         0         17,191         0   

Corporate securities

     44,112         0         44,112         0   

U.S. Government agency securities

     32,890         0         32,890         0   

Greek government-issued bonds

     192         0         192         0   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total available-for-sale securities

   $ 243,205       $ 0       $ 243,205       $ 0   
  

 

 

    

 

 

    

 

 

    

 

 

 

Nonqualified Deferred Compensation Plan assets (2)

     3,505         0         3,505         0   

Forward foreign currency exchange contract asset (3)

     6,682         0         6,682         0   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total assets

   $ 299,664       $ 44,212       $ 255,452       $ 0   
  

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities:

           

Nonqualified Deferred Compensation Plan liability (4)

   $ 9,450       $ 5,945       $ 3,505       $ 0   

Forward foreign currency exchange contract liability (3)

     220         0         220         0   

Contingent acquisition consideration payable (5)

     38,614         0         0         38,614   

Asset retirement obligation (6)

     2,991         0         0         2,991   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total liabilities

   $ 51,275       $ 5,945       $ 3,725       $ 41,605   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(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.