Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2013

Assets and Liabilities Measured at Fair Value on a Recurring Basis

As of December 31, 2013 and 2012, the Company held certain assets and liabilities required to be measured at fair value on a recurring basis. The fair value hierarchy requires the use of observable market data when available. In instances in which the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement classification below has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. Management’s assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability. 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 December 31, 2013		Level 1		Level 2	Level 3
Assets
Life insurance surrender values	$	5.3	$	5.3

Liabilities
Acquisition-related contingent consideration	$	162.9				$	162.9

			Fair Value Measurements Using Inputs Considered as Significant
	Fair Value as of December 31, 2012		Level 1		Level 2	Level 3
Assets
Life insurance surrender values	$	11.9	$	11.9
Auction rate securities	$	14.4				$	14.4

Liabilities
Acquisition-related contingent consideration	$	143.6				$	143.6

Life Insurance Policies, Cash Surrender Values. 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 deferred compensation plan assets and certain of its split dollar agreements.

Auction Rate Securities. During the years ended December 31, 2013 and 2012, the Company held available-for-sale auction rate securities, which were classified as long-term assets in the consolidated financial statements. In 2013, one of the Company's student loan auction rate securities was redeemed at its par value. Also in 2013, the Company sold its structured finance and remaining student loan auction rate securities. Proceeds from the Company's sold and redeemed securities totaled $15.0 million, for which the Company realized a net gain of $0.4 million. As of December 31, 2012, estimated fair value and unrealized losses, net of unrealized gains, associated with the Company’s available-for-sale auction rate securities totaled $14.4 million and $0.2 million, respectively. Due to liquidity issues in the auction rate securities market, there was insufficient observable market data to determine the fair values of the Company’s auction rate securities as of December 31, 2012. Therefore, their respective fair values were estimated by an independent valuation firm, Houlihan Capital Advisors, LLC, using a probability weighted discounted cash flow model.

Acquisition-Related Contingent Consideration. Acquisition-related contingent consideration presented 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. The Company completed six acquisitions during 2013 and 2012, as described in Note 3 - Acquisitions, most of which include earn-out agreements. Additions to acquisition-related contingent consideration totaled $30.0 million and $66.7 million for the years ended December 31, 2013, and 2012, respectively. Payments related to acquisition-related contingent consideration obligations measured at fair value on a recurring basis totaled $8.5 million and $3.8 million for the years ended December 31, 2013, and 2012, respectively and foreign currency translation gains included in other comprehensive income totaled $2.2 million and $0.1 million for the years ended December 31, 2013 and 2012.

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

Assets and liabilities recognized or disclosed at fair value on a non-recurring 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, other intangible assets, long-lived assets and debt.

Carrying amounts and estimated fair values of selected financial instruments measured on a non-recurring basis as of the dates indicated were as follows (in millions):



	December 31, 2013				December 31, 2012
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
4.875% Senior Notes	$	400.0	$	380.0
7.625% Senior Notes					$	150.0	$	154.9
2009 Convertible Notes	$	12.6	$	26.6	$	12.7	$	21.0
2011 Convertible Notes	$	198.3	$	428.3	$	193.0	$	338.3

The estimated fair values of the Company’s 4.875% Senior Notes, 7.625% Senior Notes, 2009 Convertible Notes and 2011 Convertible Notes are based on quoted market prices, a Level 1 input. 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. See Note 9 - Debt for additional information.

- 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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