Financial Instruments and Fair Value Measurements

9 Months Ended

Jun. 30, 2012

Financial Instruments and Fair Value Measurements [Abstract]

Financial Instruments and Fair Value Measurements

Note 13 – Financial Instruments and Fair Value Measurements

The fair values of financial instruments, including those not recognized on the statement of financial position at fair value, carried at June 30, 2012 and September 30, 2011 are classified in accordance with the fair value hierarchy in the tables below:

	June 30, 2012 Total		Basis of Fair Value Measurement
			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Institutional money market investments	$	1,166,769	$	1,166,769	$	—	$	—
Forward exchange contracts		5,733		—		5,733		—
Interest rate swap		3,252		—		3,252		—
Total Assets	$	1,175,754	$	1,166,769	$	8,985	$	—
Liabilities
Forward exchange contracts	$	15,693	$	—	$	15,693	$	—
Contingent consideration liability		8,077		—		—		8,077
Total Liabilities	$	23,770	$	—	$	15,693	$	8,077
	September 30,  2011 Total		Basis of Fair Value Measurement
			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Institutional money market investments	$	590,515	$	590,515	$	—	$	—
Forward exchange contracts		37,198		—		37,198		—
Interest rate swap		5,959		—		5,959		—
Total Assets	$	633,672	$	590,515	$	43,157	$	—
Liabilities
Forward exchange contracts	$	39,589	$	—	$	39,589	$	—
Interest rate swaps		69,103		—		69,103		—
Total Liabilities	$	108,692	$	—	$	108,692	$	—

The Company’s institutional money market accounts permit daily redemption and the fair values of these investments are based upon the quoted prices in active markets provided by the holding financial institutions. The Company’s remaining cash equivalents were $491,950 and $584,767 at June 30, 2012 and September 30, 2011, respectively. Short-term investments are held to their maturities and are carried at cost, which approximates fair value. The cash equivalents consist of liquid investments with a maturity of three months or less and the short-term investments consist of instruments with maturities greater than three months and less than one year.

The Company measures the fair value of forward exchange contracts and currency options using an income approach with significant observable inputs, specifically spot currency rates, market designated forward currency prices and a discount rate. The fair value of interest rate swaps is provided by the financial institutions that are counterparties to these arrangements.

Long-term debt is recorded at amortized cost. The fair value of long-term debt is measured based upon quoted prices in active markets for similar instruments, which are considered Level 2 inputs in the fair value hierarchy. The fair value of long-term debt was $4,222,308 and $2,839,697 at June 30, 2012 and September 30, 2011, respectively. The fair value of $200,000 of 4.55% notes due on April 15, 2013, that were reclassified from long-term debt to short-term debt during the third quarter of fiscal year 2012, was $206,374 at June 30, 2012.

The contingent consideration liability was recognized as part of the consideration transferred in the Company’s acquisition of KIESTRA, which occurred in the second quarter of fiscal year 2012. The fair value of the contingent consideration liability was estimated using a probability-weighted discounted cash flow model that was based upon the probabilities assigned to the contingent events. The estimated fair value of the contingent consideration liability is remeasured at each reporting period based upon increases or decreases in the probability of the contingent payments. The change to the contingent liability as of June 30, 2012 since the acquisition date is primarily attributable to foreign currency translation. Additional disclosures regarding the contingent consideration liability are included in Note 9.

The Company’s policy is to recognize any transfers into fair value measurement hierarchy levels and transfers out of levels at the beginning of each reporting period. There were no transfers in and out of Level 1, Level 2 or Level 3 measurements for the three months and nine months ended June 30, 2012.