Basis of Presentation

9 Months Ended

Sep. 30, 2011

Basis of Presentation

Basis of Presentation

(1)  Basis of Presentation

The accompanying unaudited interim consolidated financial statements of CIBER, Inc. and its subsidiaries (together, “CIBER,” “the Company,” “we,” “our,” or “us”) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by U.S. generally accepted accounting principles for complete financial statements.  These consolidated financial statements should therefore be read in conjunction with the consolidated financial statements and notes thereto for the fiscal year ended December 31, 2010, included in our Annual Report on Form 10-K filed with the SEC.  The accompanying unaudited interim consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and include all adjustments of a normal, recurring nature that are, in the opinion of management, necessary to present fairly the financial position and results of operations for the interim periods presented.  The results of operations for an interim period are not necessarily indicative of the results of operations for a full fiscal year.  We reclassified certain revenues for 2010 periods presented between “consulting services” and “other revenue,” and we reclassified the costs related to these revenues between “cost of consulting services” and “cost of other revenue” to conform to the current period presentation.

Other Income (Expense), Net — Other income (expense), net consisted of the following:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2011		2010			2011			2010
	(In thousands)
Foreign exchange gains (losses), net	$	468	$	(669	)	$	211		$	(48	)
Change in fair value of acquisition-related contingent consideration	—		—			(3,222		)	—
Other	—		61			6			62
Other income (expense), net	$	468	$	(608	)	$	(3,005	)	$	14

Through the second quarter of 2011, the estimated fair value of the acquisition-related contingent consideration was based on a probability-weighted approach derived from management’s estimates of profitability and sales targets, as well as the discount rate of 15% used to determine the present value of the liability, and accordingly, the liability was disclosed as a level 3 fair value measurement.  Based on a revised agreement with the sellers, the value of the future contingent acquisition consideration was fixed at approximately $10 million.  As a result, we calculated the present value of the contingent consideration liability at June 30, 2011, to be $9.2 million, based on a discount rate of 6%.  The change in management’s estimates of the amount to be paid increased the value of the liability by $3.2 million as of June 30, 2011, and this amount was recorded in “other income (expense), net” on the Consolidated Statements of Operations.  The change in the value of the liability from December 31, 2010 through September 30, 2011, was due to the following (in thousands):

Balance at December 31, 2010	$	5,062
Change in fair value of acquisition-related contingent consideration	3,222
Interest expense accretion	555
Foreign exchange rate changes	(122		)
Balance at September 30, 2011	$	8,717

Recently Issued Accounting Pronouncements — In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (“ASU 2011-04”).  ASU 2011-04 amended Accounting Standards Codification Topic 820 (“ASC 820”) to converge the fair value measurement guidance in U.S. GAAP and International Financial Reporting Standards (“IFRSs”).  Some of the amendments clarify the application of existing fair value measurement requirements, while other amendments change a particular principle in ASC 820.  In addition, ASU 2011-04 requires additional fair value disclosures.  The amendments are to be applied prospectively and are effective for annual periods beginning after December 15, 2011.  We are currently evaluating the effect that the provisions of ASU 2011-04 will have on our consolidated financial statements.

In June 2011, the FASB issued Accounting Standards Update No. 2011-05, Presentation of Comprehensive Income (“ASU 2011-05”), which amends the disclosure requirements for the presentation of comprehensive income.  This guidance, effective retrospectively for interim and annual periods beginning on or after December 15, 2011 (early adoption is permitted), requires presentation of total comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate, but consecutive statements.  ASU 2011-05 eliminates the option to present the components of other comprehensive income as part of the statement of changes in equity.  ASU 2011-05 does not change the items that must be reported in other comprehensive income, or when an item of other comprehensive income must be reclassified to net income.  The implementation of this amended accounting guidance is not expected to have a material impact on our consolidated financial position and results of operations.