Fair Value Measurements

6 Months Ended

Sep. 30, 2013

We estimate the fair value of financial instruments using available market information and generally accepted valuation methodologies. We assess the inputs used to measure fair value using a three-tier hierarchy. The hierarchy indicates the extent to which pricing inputs used in measuring fair value are observable in the market. Level 1 inputs include unadjusted quoted prices for identical assets or liabilities and are the most observable. Level 2 inputs include unadjusted quoted prices for similar assets and liabilities that are either directly or indirectly observable, or other observable inputs such as interest rates, foreign currency exchange rates, commodity rates, and yield curves. Level 3 inputs are not observable in the market and include our own judgments about the assumptions market participants would use in pricing the asset or liability. The use of observable and unobservable inputs is reflected in the hierarchy assessment disclosed in the tables below.

There were no significant transfers between Levels 1, 2, and 3 during the six months ended September 30, 2013.

The following tables present information about our financial assets and liabilities measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation techniques utilized to determine such fair value:



	Fair value measurement used
	Recorded value as of		Active markets for identical assets or liabilities		Quoted prices in similar instruments and observable inputs		Active markets for unobservable inputs
(In thousands)	September 30, 2013		(Level 1)		(Level 2)		(Level 3)
Assets:
Corporate-owned life insurance — non-current	$	3,721	$	—	$	—	$	3,721
Liabilities:
Contingent consideration — current	180		—		—		180
Contingent consideration — non-current	1,620		—		—		1,620



	Fair value measurement used
	Recorded value as of	Active markets for identical assets or liabilities	Quoted prices in similar instruments and observable inputs	Active markets for unobservable inputs
(In thousands)	March 31, 2013	(Level 1)	(Level 2)	(Level 3)
Assets:
Corporate-owned life insurance — non-current	3,673	—	—	3,673

The recorded value of the corporate-owned life insurance policies is adjusted to the cash surrender value of the policies obtained from the third party life insurance providers, which are not observable in the market, and therefore, are classified within Level 3 of the fair value hierarchy. Changes in the cash surrender value of these policies are recorded within “Other expenses (income), net” in the Condensed Consolidated Statements of Operations.

The fair value of the contingent consideration was determined by calculating the probability-weighted earn-out payments based on the assessment of the likelihood that certain milestones would be achieved.

The following table presents a summary of changes in the fair value of the Level 3 assets:



	Six months ended
	September 30,
(In thousands)	2013		2012
Corporate-owned life insurance:
Balance on April 1, 2013	$	3,673	$	3,458
Unrealized gain relating to instruments held at reporting date	6		55
Purchases, sales, issuances and settlements, net	42		42
Balance on September 30, 2013	$	3,721	$	3,555

The following tables present information about our financial and nonfinancial assets and liabilities measured at fair value on a nonrecurring basis and indicate the fair value hierarchy of the valuation techniques utilized to determine such fair value:



	Fair value measurement used
	Recorded value as of		Active markets for identical assets or liabilities		Quoted prices in similar instruments and observable inputs		Active markets for unobservable inputs
(In thousands)	September 30, 2013		(Level 1)		(Level 2)		(Level 3)
Assets:
Goodwill	$	17,701	$	—	$	—	$	17,701
Intangible assets	11,267		—		—		11,267
Liabilities:
Restructuring liabilities — current	$	438	$	—	$	—	$	438
Other employee benefit plan obligations — non-current	195		—		—		195



	Fair value measurement used
	Recorded value as of		Active markets for identical assets or liabilities		Quoted prices in similar instruments and observable inputs		Active markets for unobservable inputs
(In thousands)	March 31, 2013		(Level 1)		(Level 2)		(Level 3)
Assets:
Goodwill	$	14,128	$	—	$	—	$	14,128
Intangible assets	11,283		—		—		11,283
Liabilities:
Restructuring liabilities — current	584		—		—		584
Other employee benefit plans obligations — non-current	195		—		—		195

Intangible assets are valued at their estimated fair value at time of acquisition. We evaluate the fair value of our definite-lived and indefinite-lived intangible assets on an annual basis, or in interim periods if indicators of potential impairment exist. The income approach using “the relief from royalty method” was used to value indefinite-lived intangible assets.

Restructuring liabilities primarily consist of one-time termination benefits to former employees and ongoing costs related to long-term operating lease obligations. The recorded value of the termination benefits to employees is adjusted to the expected remaining obligation each period based on the arrangements made with the former employees. The recorded value of the ongoing lease obligations is based on the remaining lease term and payment amount, net of sublease income plus interest, discounted to present value. Changes in subsequent periods resulting from revisions to either the timing or amount of estimated cash flows over the remaining future periods are measured using the credit-adjusted, risk-free rate that was used to measure the restructuring liabilities initially.

The inputs used to value the our goodwill, intangible assets, capitalized software development, and restructuring liabilities are not observable in the market and therefore, these amounts are classified within Level 3 in the fair value hierarchy.

The following tables present a summary of changes in the fair value of the Level 3 assets and liabilities:



	Level 3 assets and liabilities
	Six months ended September 30, 2013
(In thousands)	Goodwill		Intangible assets			Contingent consideration		Other employee benefit plans obligations		Restructuring liabilities
Balance at April 1, 2013	$	14,128	$	11,283		$	—	$	195	$	584
Foreign currency translation adjustments	129		—			—		—		—
Amortization	—		(621		)	—		—		—
Provisions	—		—			—		—		512
Purchases	3,444		605			—		—		—
Activity, payments and other charges (net)	—		—			1,800		—		(658		)
Balance at September 30, 2013	$	17,701	$	11,267		1,800		$	195	$	438



	Level 3 assets and liabilities
	Six months ended September 30, 2012
(In thousands)	Goodwill		Intangible assets			SERP obligations			Other employee benefit plans obligations		Restructuring liabilities
Balance at April 1, 2012	$	15,198	$	12,444		$	3,323		$	195	$	6,047
Foreign currency translation adjustments	25		—			—			—		—
Amortization	—		(581		)	—			—		—
Provisions	—		—			—			—		1,213
Activity, payments and other charges (net)	—		—			(3,323		)	—		(5,690		)
Balance at September 30, 2012	$	15,223	$	11,863		$	—		$	195	$	1,570

Unrealized losses related to goodwill represent fluctuations due to the movement of foreign currencies relative to the U.S. dollar and are recorded within “Accumulated other comprehensive (loss) income” in the Condensed Consolidated Balance Sheets.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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