FAIR VALUE MEASUREMENT

12 Months Ended

Dec. 31, 2011

FAIR VALUE MEASUREMENT

NOTE 4—FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

• Level 1—Valuations based on quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.

• Level 2—Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.

• Level 3—Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of assets and liabilities and their placement within the fair value hierarchy levels. The impact of our creditworthiness has been considered in the fair value measurements noted below. In addition, the fair value measurement of a liability must reflect the nonperformance risk of an entity.

In thousands
	Total as of December 31, 2011		Fair Value Measurements Using
			Level 1 Inputs		Level 2 Inputs		Level 3 Inputs
Assets:
Cash and cash equivalents	$	22,511	$	22,511	$	0	$	0
Short-term investments		416		416		0		0
Total assets	$	22,927	$	22,927	$	0	$	0
Liabilities:
Contingent consideration	$	9,921	$	0	$	0	$	9,921
Total liabilities	$	9,921	$	0	$	0	$	9,921

In thousands
	Total as of December 31, 2010		Fair Value Measurements Using
			Level 1 Inputs		Level 2 Inputs		Level 3 Inputs
Assets:
Cash and cash equivalents	$	79,276	$	79,276	$	0	$	0
Short-term investments		16,248		16,248		0		0
Total assets	$	95,524	$	95,524	$	0	$	0
Liabilities:
Contingent consideration	$	16,450	$	0	$	0	$	16,450
Total liabilities	$	16,450	$	0	$	0	$	16,450

Level 1: At December 31, 2011, we have $22.5 million in cash and cash equivalents, and $0.4 million in money market accounts, which we recorded at fair value using Level 1 inputs. At December 31, 2010, we had $79.3 million in cash and cash equivalents, $15.8 million in certificates of deposit, and $0.4 million in money market accounts. In 2010, we financed a portion of our Japan acquisitions through local borrowings of ¥1.2 billion which required us to deposit the equivalent USD amount of $15.8 million in one year certificates of deposit with an affiliated bank located in the United States which was redeemed in September 2011.

Level 2: We had no assets or liabilities measured at fair value using Level 2 inputs at December 31, 2011 or December 31, 2010.

Level 3: We had contingent consideration liabilities recorded in the amounts of $9.9 million at December 31, 2011, and $16.5 million at December 31, 2010. Contingent consideration represents amounts to be paid as part of acquisition consideration only if certain future events occur. These events are usually acquisition targets for revenues or earnings. We arrive at the fair value of contingent consideration by applying a weighted probability of potential outcomes to the maximum possible payout. The calculation of these potential outcomes is dependent on both past financial performance and management assumptions about future performance. Contingent consideration liabilities are reassessed each quarter and are reflected in the balance sheet as part of “Other current liabilities” or “Other liabilities”. Changes to contingent consideration are reflected in the table below:

In thousands
Contingent consideration at December 31, 2010	$	16,450
Increases due to acquisitions		13,264
Decreases due to payments		(11,535	)
Changes due to currency fluctuations		(1,037	)
Changes in fair value reflected in income statement (SG&A)		(7,221	)
Contingent consideration at December 31, 2011	$	9,921

Fair Value of Debt: At December 31, 2011, the fair value of the Company’s debt obligations was estimated at $1.41 billion compared to a carrying amount of $1.38 billion. At December 31, 2010, the fair value of the Company’s debt obligations was estimated at $1.108 billion, compared to a carrying amount of $1.106 billion. The fair values were estimated using market interest rates for comparable instruments. The Company has no current plans to retire a significant amount of its debt prior to maturity.

There have been no movements of items between fair value hierarchies.