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Fair Value of Financial Instruments
 6 Months Ended
Jun. 30, 2013
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments
Fair Value of Financial Instruments
The Company’s financial instruments include cash and cash equivalents, accounts and notes receivable, cash collateral deposited with insurance carriers, cash surrender value of life insurance policies, auction rate securities, cost and equity method investments, deferred compensation plan assets and liabilities, accounts payable and other current liabilities, acquisition-related contingent consideration and debt obligations.
    Fair value is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value guidance establishes a valuation hierarchy, which requires maximizing the use of observable inputs when measuring fair value. The three levels of inputs that may be used are:
Level 1 - Quoted market prices in active markets for identical assets or liabilities.
Level 2 - Observable market based inputs or other observable inputs.
Level 3 - Significant unobservable inputs that cannot be corroborated by observable market data. These values are generally determined using valuation models incorporating management’s estimates of market participant assumptions.
Carrying amounts and estimated fair values of selected financial instruments as of the dates indicated were as follows (in millions):     

June 30, 2013
 
December 31, 2012
 
Carrying
Amount
 
Fair
Value
 
Carrying
Amount
 
Fair
Value
Assets:
 
 
 
 
 
 
 
Cash surrender value of life insurance policies
$
12.9

 
$
12.9

 
$
11.9

 
$
11.9

Auction rate securities
9.3

 
9.3

 
14.4

 
14.4

 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
Deferred compensation plan liabilities
$
3.9

 
$
3.9

 
$
3.3

 
$
3.3

Acquisition-related contingent consideration
165.9

 
165.9

 
143.6

 
143.6

4.875% senior notes
400.0

 
381.8

 
—

 
—

7.625% senior notes
—

 
—

 
150.0

 
154.9

Original 4.0% Notes
9.6

 
20.5

 
9.7

 
15.9

Original 4.25% Notes
3.0

 
6.5

 
3.0

 
5.1

New 4.0% Notes
102.3

 
223.3

 
100.9

 
173.4

New 4.25% Notes
93.3

 
210.3

 
92.1

 
164.9



The following methods and assumptions were used to estimate the fair values of financial instruments:
Cash Surrender Value of Life Insurance Policies. Cash surrender values of life insurance policies are based on current cash surrender values as quoted by insurance carriers. Life insurance policies support the Company’s split dollar agreements and deferred compensation plan assets.
Auction Rate Securities.  The fair value of the Company’s auction rate securities was estimated by an independent valuation firm, Houlihan Capital Advisors, LLC, using a probability weighted discounted cash flow model. During the second quarter of 2013, the Company sold one of its auction rate securities, and the issuer of another of its auction rate securities redeemed the security at its par value. See Note 7 - Securities Available for Sale.
Deferred Compensation Plan Liabilities. Deferred compensation plan liabilities are based on employee deferrals, together with Company matching contributions, which are valued according to employee-directed investment options. The fair value of deferred compensation plan liabilities is based on quoted market prices of the employees' underlying investment selections.
Acquisition-Related Contingent Consideration Acquisition-related contingent consideration in the table above represents the estimated fair value of additional future earn-outs payable for acquisitions of businesses that closed after January 1, 2009, in accordance with U.S. GAAP. The fair value of such acquisition-related contingent consideration is based on management’s estimates and entity-specific assumptions and is evaluated on an on-going basis. See Note 3 - Acquisitions and Other Investments for details of recent acquisitions.
Debt. The estimated fair values of the Company’s 4.875% senior notes, 7.625% senior notes, New Convertible Notes and Original Convertible Notes, which are measured on a nonrecurring basis, are based on quoted market prices, a Level 1 input. During the first quarter of 2013, the Company repurchased and redeemed all of its outstanding 7.625% senior notes. See Note 2 - Earnings per Share and Note 10 - Debt for details regarding the Company's debt instruments, including the value of the premium over the principal amount of the New Convertible Notes.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
As of June 30, 2013, the Company held certain assets and liabilities required to be measured at fair value on a recurring basis. The fair values of financial assets and liabilities measured on a recurring basis were determined using the following inputs as of the dates indicated (in millions):
 
 
 
Fair Value Measurements
Using Inputs Considered as Significant
 
Fair Value as of
June 30, 2013
 
Level 1
 
Level 2
 
Level 3
Assets
 
 
 
 
 
 
 
Cash surrender value of life insurance policies
$
12.9

 
$
12.9

 
 
 
 
Auction rate securities
$
9.3

 
 
 
 
 
$
9.3

 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
Deferred compensation plan liabilities
$
3.9

 
$
3.9

 
 
 
 
Acquisition-related contingent consideration
$
165.9

 
 
 
 
 
$
165.9

 
 
 
 
 
 
 
 


 
 
Fair Value Measurements
Using Inputs Considered as Significant
 
Fair Value as of
December 31, 2012
 
Level 1
 
Level 2
 
Level 3
Assets
 
 
 
 
 
 
 
Cash surrender value of life insurance policies
$
11.9

 
$
11.9

 
 
 
 
Auction rate securities
$
14.4

 
 
 
 
 
$
14.4



 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
Deferred compensation plan liabilities
$
3.3

 
$
3.3

 
 
 
 
Acquisition-related contingent consideration
$
143.6

 
 
 
 
 
$
143.6


The following tables provide a reconciliation between the beginning and ending balances of items measured at fair value on a recurring basis using significant unobservable inputs for the periods indicated (in millions):
Three Months Ended June 30, 2013 and 2012:
Auction Rate Securities

Assets
Student
Loan
 
Structured
Finance
Securities
 
Total
Balance as of March 31, 2012
$
12.0

 
$
2.0

 
$
14.0

Changes in fair value recorded in earnings
—

 
—

 
—

Changes in fair value recorded in other comprehensive income
(0.3
)
 
(0.2
)
 
(0.5
)
Balance as of June 30, 2012
$
11.7

 
$
1.8

 
$
13.5

 
 
 
 
 
 
Balance as of March 31, 2013
$
11.7

 
$
3.0

 
$
14.7

Changes in fair value recorded in earnings
—

 
—

 
—

Changes in fair value recorded in other comprehensive income
(0.0
)
 
—

 
(0.0
)
Redemption or sale of securities (See Note 7 - Securities Available For Sale)
$
(2.4
)
 
$
(3.0
)
 
$
(5.4
)
Balance as of June 30, 2013
$
9.3

 
$
—

 
$
9.3

 
 
 
 
 
 
Liabilities
Acquisition-Related
Contingent Consideration
 
 
 
 
Balance as of March 31, 2012
$
80.9

 
 
 
 
Payments of contingent consideration
(1.6
)
 
 
 
 
Valuation changes recorded in earnings
—

 
 
 
 
Balance as of June 30, 2012
$
79.3

 
 
 
 
 
 
 
 
 
 
Balance as of March 31, 2013
$
142.6

 
 
 
 
Payments of contingent consideration
(2.0
)
 
 
 
 
Valuation changes recorded in earnings
—

 
 
 
 
Additions from new business combinations
26.7

 
 
 
 
Currency translation adjustments included in other comprehensive income
(1.4
)
 
 
 
 
Balance as of June 30, 2013
$
165.9

 
 
 
 


Six Months Ended June 30, 2013 and 2012:
Auction Rate Securities

Assets
Student
Loan
 
Structured
Finance
Securities
 
Total
Balance as of December 31, 2011
$
11.9

 
$
1.7

 
$
13.6

Changes in fair value recorded in earnings
—

 
—

 
—

Changes in fair value recorded in other comprehensive income
(0.2
)
 
0.1

 
(0.1
)
Balance as of June 30, 2012
$
11.7

 
$
1.8

 
$
13.5

 
 
 
 
 
 
Balance as of December 31, 2012
$
11.7

 
$
2.7

 
$
14.4

Changes in fair value recorded in earnings
—

 
—

 
—

Changes in fair value recorded in other comprehensive income
(0.0
)
 
0.3

 
0.3

Redemption or sale of securities (See Note 7 - Securities Available For Sale)
(2.4
)
 
(3.0
)
 
(5.4
)
Balance as of June 30, 2013
$
9.3

 
$
—

 
$
9.3

 
 
 
 
 
 
Liabilities
Acquisition-Related
Contingent Consideration
 
 
 
 
Balance as of December 31, 2011
$
80.9

 
 
 
 
Payments of contingent consideration
(1.6
)
 
 
 
 
Valuation changes recorded in earnings
—

 
 
 
 
Balance as of June 30, 2012
$
79.3

 
 
 
 
 
 
 
 
 
 
Balance as of December 31, 2012
$
143.6

 
 
 
 
Payments of contingent consideration
(2.6
)
 
 
 
 
Valuation changes recorded in earnings
—

 
 
 
 
Additions from new business combinations
26.7

 
 
 
 
Currency translation adjustments included in other comprehensive income
(1.8
)
 
 
 
 
Balance as of June 30, 2013
$
165.9

 
 
 
 


Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
Assets and liabilities recognized or disclosed at fair value on a nonrecurring basis, which are initially measured at fair value, and are subsequently remeasured in the event of an impairment or other measurement event, if applicable, include items such as cost and equity method investments, goodwill and other intangible assets, long-lived assets and debt instruments.
During the first quarter of 2013, the Company repurchased and redeemed its 7.625% Senior Notes. A debt extinguishment loss of $5.6 million was recorded in connection with the transaction. During the second quarter of 2012, the Company sold the assets and liabilities of DirectStar and incurred a $0.2 million loss on disposal.
As of the dates indicated, the Company held the following assets and liabilities required to be remeasured on a nonrecurring basis:
 
June 30,
2013
 
December 31,
2012
Assets of discontinued operations, classified as held for sale
$
29.3

 
$
26.3

Liabilities of discontinued operations, classified as held for sale
$
9.9

 
$
10.7



See Note 4 - Discontinued Operations and Note 10 - Debt for additional details.