Fair Value Measurements

9 Months Ended

Sep. 30, 2011

Fair Value Measurements

Fair Value Measurements

(2) Fair Value Measurements

Fair value is 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. In determining fair value, various methods are used including market, income and cost approaches. Based on these approaches, certain assumptions that market participants would use in pricing the asset or liability are used, including assumptions about risk and/or the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market-corroborated, or generally unobservable firm inputs. Valuation techniques that are used maximize the use of observable inputs and minimize the use of unobservable inputs. Based on the observability of the inputs used in the valuation techniques, fair value measured financial instruments are categorized according to the fair value hierarchy prescribed by ASC 820, Fair Value Measurements and Disclosures. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three categories:

· Level 1: Fair value measurements using unadjusted quoted market prices in active markets for identical, unrestricted assets or liabilities.

· Level 2: Fair value measurements using correlation with (directly or indirectly) observable market-based inputs, unobservable inputs that are corroborated by market data, or quoted prices in markets that are not active.

· Level 3: Fair value measurements using significant inputs that are not readily observable in the market.

Level 1 consists of financial instruments whose value is based on quoted market prices such as exchange-traded mutual funds and listed equities.

Level 2 includes financial instruments that are valued using models or other valuation methodologies. These models are primarily standard models that consider various assumptions including time value, yield curve and other relevant economic measures. Substantially all of these assumptions are observable in the marketplace, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Financial instruments in this category include non-exchange-traded derivatives such as currency forward contracts.

Level 3 is comprised of financial instruments whose fair value is estimated based on internally developed models or methodologies utilizing significant inputs that are generally less readily observable.

Fair value measurements for those items measured on a recurring basis are as follows (dollars in thousands):

September 30, 2011	Total		Level 1		Level 2		Level 3
Assets
Cash and cash equivalents:
Tax free money market mutual funds	$	4,590	$	4,590	$	—	$	—
U.S. government money market mutual funds	128,845		128,845		—		—
Money market mutual funds	6,048		6,048		—		—
Securities owned, at fair value:
Corporate stocks - trading securities	1,348		1,348		—		—
Mutual funds	4,542		4,542		—		—
Total	$	145,373	$	145,373	$	—	$	—
Liabilities
Accounts payable and accrued expenses:
Currency forward contracts	$	12	$	—	$	12	$	—
Securities sold, not yet purchased, at fair value:
Common stock	1,395		1,395		—		—
Total	$	1,407	$	1,395	$	12	$	—

December 31, 2010	Total		Level 1		Level 2		Level 3
Assets
Cash and cash equivalents:
Tax free money market mutual funds	$	5,061	$	5,061	$	—	$	—
U.S. government money market mutual funds	192,617		192,617		—		—
Money market mutual funds	7,971		7,971		—		—
Securities owned, at fair value:
Corporate stocks - trading securities	19,051		19,051		—		—
Corporate stocks - available-for-sale securities	1,662		1,662		—		—
Mutual funds	5,076		5,076		—		—
Total	$	231,438	$	231,438	$	—	$	—
Liabilities
Accounts payable and accrued expenses:
Currency forward contracts	$	9	$	—	$	9	$	—
Securities sold, not yet purchased, at fair value:
Common stock	19,362		19,362		—		—
Total	$	19,371	$	19,362	$	9	$	—

Cash and cash equivalents other than bank deposits are measured at fair value and include U.S. government money market mutual funds.

Securities owned, at fair value and securities sold, not yet purchased, at fair value includes common stocks, equity index mutual funds and bond mutual funds, all of which are exchange traded.

Currency forward contracts are valued based upon forward exchange rates and approximate the credit risk adjusted discounted net cash flow that would have been realized if the contracts had been sold at the balance sheet date.

Certain items are measured at fair value on a non-recurring basis. The table below details the portion of those items that were measured at fair value during the nine months ended September 30, 2011 and the resultant loss recorded (dollars in thousands):

			Fair Value Measurements Using
	September30, 2011		Level 1		Level 2		Level 3		Total Losses
Goodwill — U.S. Operations	245,118		—		—		245,118		225,035
Total	$	245,118	$	—	$	—	$	245,118	$	225,035

Goodwill allocated to the Company’s U.S. Operations reporting unit with a carrying value of $470.1 million was written down to its implied fair value of $245.1 million resulting in an impairment charge of $225.0 million in the second quarter of 2011.