Fair Value Of Assets And Liabilities

12 Months Ended

Dec. 31, 2011

Fair Value Of Assets And Liabilities [Abstract]

Fair Value Of Assets And Liabilities

(2)    Fair Value of Assets and Liabilities

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e. "the exit price") in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various valuation approaches, including quoted market prices and discounted cash flows. A hierarchy for inputs is used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are inputs that reflect a company's judgment concerning the assumptions that market participants would use in pricing the asset or liability developed based on the best information available under the circumstances. The fair value hierarchy is broken down into three levels based on the reliability of inputs.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the Company's degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases an asset or liability is classified in its entirety based on the lowest level of input that is significant to the measurement of fair value.

Fair value is a market-based measure considered from the perspective of a market participant who holds the asset or owes the liability rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, the Company's own assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date. The Company uses prices and inputs that are current as of the measurement date, including periods of market dislocation. In periods of market dislocation, the observability of prices and inputs may be reduced for many instruments. This condition has caused, and in the future may cause, the Company's financial instruments to be reclassified from Level 1 to Level 2 or from Level 2 to Level 3. During the years ended December 31, 2011 and 2010, the Company did not have any reclassifications in levels.

The Company estimated the fair value of acquisition-related contingent consideration arrangements by applying the income approach using a probability-weighted discounted cash flow model. This fair value measurement is based on significant inputs not observed in the market and thus represents a Level 3 measurement. Level 3 instruments are valued based on unobservable inputs that are supported by little or no market activity and reflect the Company's own assumptions in measuring fair value.

Each period, the Company evaluates the fair value of the contingent consideration obligations and records any increases in the fair value as contingent consideration expense and decreases in the fair value as a reduction of contingent consideration expense. Contingent consideration of $6.1 million was outstanding at December 31, 2009 related to a business acquisition in 2009. Contingent consideration of $4.2 million was recorded in 2010 in connection with a business acquisition. The fair value of contingent consideration obligations was reduced to zero as of December 31, 2010, pursuant to mutual release agreements executed by the Company and the former owners of the businesses acquired in 2009 and 2010, respectively, that resulted in the payment of $1.0 million to the former owners of the business acquired in 2010 and the discharge of the remaining contingent consideration obligations. Accordingly, the Company recorded a gain of $9.3 million in 2010 which is reported in selling, general and administrative expenses in its consolidated statement of operations. Contingent consideration of $9.6 million, $10.9 million and $1.1 million was recorded in connection with business acquisitions in February 2011, June 2011 and September 2011, respectively, totaling $21.6 million. At December 31, 2011, the amounts recognized for these contingent consideration arrangements, the range of outcomes, and the assumptions used to develop the estimates had not materially changed.

The following table presents the valuation of the Company's financial assets and liabilities as of December 31, 2011 and December 31, 2010, measured at fair value on a recurring basis (in thousands):

	Level 1		Level 2		Level 3		Fair Value
December 31, 2011
Assets
Money Market Funds(1)	$	67	$	0	$	0	$	67
Variable Rate Demand Notes(2)		0		19,939		0		19,939
Total assets measured at fair value	$	67	$	19,939	$	0	$	20,006
Liabilities
Acquisition-related contingent consideration— short-term(3)	$	0	$	0	$	10,483	$	10,483
Acquisition-related contingent consideration— long-term(4)		0		0		11,112		11,112
Total liabilities measured at fair value	$	0	$	0	$	21,595	$	21,595
December 31, 2010
Assets
Money Market Funds(1)	$	101,600	$	0	$	0	$	101,600

(1) Included in cash and cash equivalents in the accompanying consolidated balance sheets.

(2) Included in short-term investments in the accompanying consolidated balance sheets. The interest rates on the variable rate demand notes ("VRDN's") reset every seven days to adjust to current market conditions. The Company can redeem these investments at cost at any time with seven days notice. Therefore, the investments are held at cost, which approximates fair value, and are classified as available-for-sale short-term investments on the accompanying consolidated balance sheets. VRDN's are generally valued using published interest rates for instruments with similar terms and maturities, and, accordingly, are classified as Level 2 instruments of the fair value hierarchy. The Company believes the recorded values of its VRDN's approximate their fair values because of their nature and relatively short maturity dates or durations. The payment of principal and interest on the VRDN's held by the Company is guaranteed by letters of credit from the issuing financial institution.

(3) Included in current installments of long-term obligations in the accompanying consolidated balance sheets.

(4) Included in long-term obligations, excluding current installments in the accompanying consolidated balance sheets.

The following table presents the changes in the estimated fair values of the Company's financial assets and liabilities that are measured using significant unobservable inputs (Level 3) for the years ended December 31, 2011 and 2010:

	Significant Unobservable Inputs (Level 3)
	Assets			Liabilities
	(In thousands)
Balance on December 31, 2009	$	58,650		$	6,070
Unrealized gain—trading securities included in earnings		4,435			0
Unrealized loss—UBS Put Option included in earnings		(4,435	)		0
Redemptions at par		(58,650	)		0
Acquisition-related contingent consideration recorded in 2010		0			4,195
Change in fair value of contingent consideration—included in SG&A		0			(9,265	)
Payments under contingent consideration arrangements		0			(1,000	)
Balance on December 31, 2010		0			0
Acquisition-related contingent consideration recorded in 2011		0			21,595
Balance on December 31, 2011	$	0		$	21,595

Fair Value of Financial Instruments

The estimated fair values of the Company's financial instruments that are not measured at fair value on a recurring basis are as follows in thousands:

	December 31, 2011				December 31, 2010
	Carrying Value		Fair Value		Carrying Value		Fair Value
Assets:
Short-term investments—held to maturity	$	20,000	$	20,000	$	40,000	$	40,000
Restricted cash		0		0		345		345
Liabilities:
2.75% Series A Debentures		265,941		281,188		255,727		302,672
2.75% Series B Debentures		243,668		300,781		234,047		305,422
Short-term debt		100,000		100,000		0		0
Deferred acquisition obligations		20,996		20,996		619		619

Fair values were determined as follows:

• The carrying amounts of time deposits classified as short-term investments, short-term debt, restricted cash and deferred acquisition obligations approximate fair value because of the short-term maturity of these instruments. The time deposits classified as short-term investments are classified as held-to-maturity and are carried at amortized cost.

• The fair value of the Series A and Series B Debentures are estimated based on several standard market variables, including the Company's stock price, yield to put/call through conversion and yield to maturity.

• The Company believes that the recorded values of all of its other financial instruments approximate their fair values because of their nature and respective relatively short maturity dates or durations.