Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2011

Classes of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

Fair value measurements for classes of Federated’s assets and liabilities measured at fair value on a recurring basis consisted of the following at December 31:



	2011								2010
	Fair Value Measurements Using								Fair Value Measurements Using
in thousands	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Financial Assets
Cash and cash equivalents	$	49,273	$	0	$	0	$	49,273	$	198,756	$	0	$	0	$	198,756
Available-for-sale equity securities	159,539		0		0		159,539		105,724		0		0		105,724
Trading securities – equity	10,805		18,653		0		29,458		6,937		4,431		0		11,368
Trading securities – debt	216		83,831		0		84,047		10,016		7,777		0		17,793
Foreign currency forward contract	0		55		0		55		0		68		0		68
Total financial assets	$	219,833	$	102,539	$	0	$	322,372	$	321,433	$	12,276	$	0	$	333,709
Financial Liabilities
Interest rate swap	$	0	$	15,241	$	0	$	15,241	$	0	$	11,734	$	0	$	11,734
SunTrust Acquisition future consideration payments liability	0		0		13,404		13,404		0		0		20,058		20,058
Foreign currency forward contracts	0		245		0		245		0		0		0		0
Total financial liabilities	$	0	$	15,486	$	13,404	$	28,890	$	0	$	11,734	$	20,058	$	31,792

Reconciliation of the beginning and ending fair value measurements of a Level 3 financial liability

The following table presents a reconciliation of the beginning and ending fair-value measurements of Federated’s liability for future consideration payments related to the SunTrust Acquisition:



in thousands
Balance at December 31, 2010	$	20,058
Adjustment to reflect final valuation¹	(2,600		)
Changes in fair value²	900
Contingent consideration payments	(4,954		)
Balance at December 31, 2011	$	13,404


1	As a result of finalizing the valuation relating to the SunTrust Acquisition in the first quarter 2011, this adjustment was required in order to revise the preliminary estimate of fair value.


2	Amounts included in Intangible asset related expense on the Consolidated Statements of Income.

- Definition

Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issuances, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.

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