Fair Value Measurement

3 Months Ended

Apr. 30, 2012

Notes To Financial Statements [Abstract]

Fair Value Measurement

Fair Value Measurement— The FASB's authoritative guidance for the hierarchy of valuation techniques is based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources. Unobservable inputs reflect our market assumptions. The fair value hierarchy consists of the following three levels:

•Level 1—Quoted prices for identical instruments in active markets;

• Level 2—Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations whose significant inputs are observable; and

•Level 3—One or more significant inputs to the valuation model are unobservable.

We use an income approach to determine the fair value of our foreign currency exchange contracts. The net gains or losses for foreign currency exchange contracts designated as cash flow hedges, which are linked to a specific transaction, are reported in accumulated other comprehensive income in stockholders' equity until the forecasted transaction occurs or the hedge is no longer effective. Once the forecasted transaction occurs or the hedge is no longer effective, we reclassify the gains or losses attributable to the foreign currency exchange contracts to our consolidated statement of operations. Foreign currency exchange contracts are recorded at fair value utilizing observable market inputs at measurement date and standard valuation techniques.

We recognize changes in fair value for foreign currency exchange contracts entered into to offset the variability in exchange rates on certain short-term monetary assets and liabilities in other income (expense), net, in our consolidated statement of operations. The fair value of foreign currency exchange contracts is included in other receivables, if the balance is an asset, or accrued liabilities, if the balance is a liability, on our consolidated balance sheet.

The following table presents information about financial assets and liabilities measured at fair value on a recurring basis as of April 30, 2012:

	Fair Value			Level 1		Level 2		Level 3
Foreign currency exchange contracts	$	328		$	—	$	328	$	—
Contingent consideration	(5,153		)	—		—		(5,153		)
Total	$	(4,825	)	$	—	$	328	$	(5,153	)

The following table presents information about financial assets and liabilities measured at fair value on a recurring basis as of January 31, 2012:

	Fair Value			Level 1		Level 2		Level 3
Foreign currency exchange contracts	$	882		$	—	$	882	$	—
Contingent consideration	(6,120		)	—		—		(6,120		)
Total	$	(5,238	)	$	—	$	882	$	(6,120	)

In connection with certain acquisitions, payment of a portion of the purchase price is contingent upon the acquired business’ achievement of certain revenue goals. As of April 30, 2012, of the total recorded balance, $772 was included in accrued liabilities and $4,381 was included in other long-term liabilities on our condensed consolidated balance sheet. As of January 31, 2012, of the total recorded balance, $510 was included in accrued liabilities and $5,610 was included in other long-term liabilities on our condensed consolidated balance sheet.

We have estimated the fair value of our contingent consideration as the present value of the expected payments over the term of the arrangements. The fair value measurement of our contingent consideration as of April 30, 2012 encompasses the following significant unobservable inputs:

Unobservable Inputs	Range
Total estimated contingent consideration	$0		-	$7,686
Discount rate	14	%	-	16%
Timing of cash flows (in years)	1		-	6

Changes in the fair value of our contingent consideration are primarily driven by changes in the estimated amount and timing of payments, resulting from changes in the forecasted revenues of the acquired businesses. Significant changes in any of the inputs in isolation could result in a fluctuation in the fair value measurement of contingent consideration. Changes in fair value are recognized in operating income in the period in which the change is identified. During the three months ended April 30, 2012, we recorded decreases in contingent consideration resulting in a net gain of $537 to special charges in our condensed consolidated statement of operations. The adjustments to the liability were due to changes in the timing and amounts of the expected payments.

The following table summarizes contingent consideration activity:

Balance as of January 31, 2012	$	6,120
Payments	(478		)
Adjustments	(537		)
Interest accretion	48
Balance as of April 30, 2012	$	5,153

The following table summarizes the fair value and carrying value of notes payable:

As of	April 30, 2012		January 31, 2012
Fair value of notes payable	$	273,190	$	259,821
Carrying value of notes payable	$	215,876	$	214,573

We based the fair value of notes payable on the quoted market price or rates available to us for instruments with similar terms and maturities. Of the total carrying value of notes payable, $1,357 as of April 30, 2012 and $1,349 as of January 31, 2012 was classified as current on our condensed consolidated balance sheets.

The carrying amounts of cash equivalents, short-term investments, trade accounts receivable, net, term receivables, short-term borrowings, accounts payable, and accrued liabilities approximate fair value because of the short-term nature of these instruments or because amounts have been appropriately discounted.