Fair Value Measurements

12 Months Ended

Jan. 01, 2012

Fair Value Measurements [Abstract]

Fair Value Measurements

2. Fair Value Measurements

Trade accounts receivable, accounts payable, accrued liabilities, accrued payroll and related taxes and short-term borrowings approximate their fair values due to the short-term maturities of these assets and liabilities.

Assets Measured at Fair Value on a Recurring Basis

The following tables present the assets carried at fair value as of January 1, 2012 and January 2, 2011 on the consolidated balance sheet by fair value hierarchy level, as described below.

	Fair Value Measurements on a Recurring Basis
	As of January 1, 2012
Description	Total		Level 1		Level 2		Level 3
	(In millions of dollars)
Money market funds	$	2.0	$	2.0	$	—	$	—
Available-for-sale investment		27.1		27.1		—		—
Total assets at fair value	$	29.1	$	29.1	$	—	$	—

	Fair Value Measurements on a Recurring Basis
	As of January 2, 2011
Description	Total		Level 1		Level 2		Level 3
	(In millions of dollars)
Money market funds	$	4.1	$	4.1	$	—	$	—
Available-for-sale investment		27.8		27.8		—		—
Forward exchange contracts, net		0.7		—		0.7		—
Total assets at fair value	$	32.6	$	31.9	$	0.7	$	—

Level 1 measurements consist of quoted prices in active markets for identical assets or liabilities. Level 2 measurements include quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 3 measurements include significant unobservable inputs.

Money market funds as of January 1, 2012 represent investments in money market accounts, all of which are restricted cash and are included in prepaid expenses and other current assets on the consolidated balance sheet. Money market funds as of January 2, 2011 represent investments in money market accounts, of which $2.9 million is included in cash and equivalents and $1.2 million of restricted cash is included in prepaid expenses and other current assets on the consolidated balance sheet. The valuations were based on quoted market prices of those accounts as of the respective period end.

Available-for-sale investment represents the Company’s investment in Temp Holdings Co., Ltd. (“Temp Holdings”) and is included in other assets on the consolidated balance sheet. The valuation is based on the quoted market price of Temp Holdings stock on the Tokyo Stock Exchange as of the period end. The unrealized loss of $2.1 million pretax and net of tax for the year ended January 1, 2012 and unrealized gain of $1.0 million pretax and net of tax for the year ended January 2, 2011 was recorded in other comprehensive income, as well as in accumulated other comprehensive income, a component of stockholders’ equity.

During 2010, the Company entered into two forward foreign currency exchange contracts to offset the variability in exchange rates on its yen-denominated debt. One contract matured in May, 2011 and the other contract matured in November, 2010. During the first quarter of 2011, the yen-denominated debt was paid in full. As a result, the Company entered into an additional forward foreign currency exchange contract during the first quarter of 2011 to offset the remaining open contract that was purchased during 2010.

Prior to maturity, these contracts, which were included in prepaid expenses and other current assets on the consolidated balance sheet, were valued using market exchange rates and were not designated as hedging instruments. Accordingly, gains and losses resulting from recording the foreign exchange contracts at fair value were reported in other expense, net on the consolidated statement of earnings, and amounted to a minor loss for the year ended January 1, 2012 and a gain of $1.6 million for the year ended January 2, 2011.

The two aforementioned forward currency exchange contracts, one to buy Japanese yen with a U.S. dollar equivalent of $6.1 million and one to sell Japanese yen with a U.S. dollar equivalent of $6.8 million, matured in May, 2011. At January 1, 2012, the Company had no open forward foreign currency exchange contracts. At January 2, 2011, the Company had one open forward foreign currency exchange contract with an expiration date of less than one year to buy foreign currencies with a U.S. dollar equivalent of $6.1 million.

During 2011, the Company entered into one non-deliverable forward foreign currency exchange contract to economically hedge the anticipated acquisition of Tradição by selling U.S. dollars and buying Brazilian real that matured on October 13, 2011. The acquisition was deferred until November 16, 2011, and the forward settled upon maturity with the counterparty. The resulting gain of $0.4 million was reported in other expense, net on the consolidated statement of earnings for the year ended January 1, 2012. As of the year end January 1, 2012, the Company had no open forward foreign currency exchange contracts. The Company does not use financial instruments for trading or speculative purposes.

Assets Measured at Fair Value on a Nonrecurring Basis

We completed our annual impairment test for all reporting units in the fourth quarter for the fiscal year ended January 1, 2012 and January 2, 2011 and determined that goodwill was not impaired. The estimated fair value of each reporting unit exceeded its related carrying value. During the second quarter of 2010, continuing operating losses in the Company’s OCG reporting unit were deemed to be a triggering event for purposes of assessing goodwill for impairment. Accordingly, we tested goodwill related to OCG and determined that OCG goodwill was not impaired.

Our analysis used significant assumptions by segment, including: expected future revenue and expense growth rates, profit margins, cost of capital, discount rate and forecasted capital expenditures. Our revenue projections assumed near-term growth consistent with current year results, followed by long-term modest growth. Assumptions and estimates about future cash flows and discount rates are complex and subjective. They can be affected by a variety of factors, including external factors such as industry and economic trends, and internal factors such as changes in our business strategy and internal forecasts. For example, a 10% reduction in our growth rate assumptions would not result in the estimated fair value falling below book value for any of our segments.

In the second quarter of 2009, due to significantly worse than anticipated economic conditions and the impacts to our business, we revised our internal forecasts for all of our segments, which we deemed to be a triggering event for purposes of assessing goodwill for impairment. Accordingly, goodwill at all of our reporting units was tested for impairment in the second quarter of 2009. As a result, we recorded a goodwill impairment loss of $50.5 million, of which $16.4 million related to the Americas Commercial reporting unit, $22.0 million related to the EMEA PT reporting unit and $12.1 million related to the APAC Commercial reporting unit. The expense was recorded in the asset impairments line on the consolidated statement of earnings.

We evaluate long-lived assets, including intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable, based on estimated undiscounted future cash flows. In 2010, management assessed the viability of certain incomplete software projects in Europe and the U.S. Based on the estimated costs to complete, management terminated the projects and recorded impairment charges of $2.0 million. After the impairment charges, the remaining balance related to these software projects was zero, which represented the fair value at January 2, 2011.

The Company’s estimates as of June 28, 2009 resulted in a $2.1 million reduction in the carrying value of long-lived assets and intangible assets in Japan. Additionally, the Company’s estimates as of September 27, 2009 resulted in a $0.5 million reduction in the carrying value of long-lived assets and intangible assets in Europe.