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Note 20 - Financial Instruments

12 Months Ended

Dec. 31, 2011

Financial Instruments Disclosure [Text Block]

20.	Financial instruments

Concentration of credit risk

The Company is subject to credit risk with respect to its cash and cash equivalents, accounts receivable and other receivables. Concentrations of credit risk with respect to the receivables are limited due to the large number of entities comprising the Company’s customer base and their dispersion across many different service lines in various countries.

Interest rate risk

The Company maintains an interest rate risk management strategy that uses interest rate hedging contracts from time to time. The Company’s specific goals are to: (i) manage interest rate sensitivity by modifying the characteristics of its debt and (ii) lower the long-term cost of its borrowed funds. Fluctuations in interest rates affect the fair value of the hedging contracts as their value depends on the prevailing market interest rate. Hedging contracts are monitored on a monthly basis.

As of December 31, 2011, the Company was party to an interest rate swap agreement to exchange the fixed rate on a portion of its debt to a floating rate. On the 5.44% Senior Notes, an interest rate swap exchanges the fixed rate on $40,000 of principal for LIBOR (6 month in arrears) + 387 basis points. The terms of the swap match the term of the 5.44% Senior Notes with a maturity of April 1, 2015.

The interest rate swap is being accounted for as a fair value hedge. The swap is carried at fair value on the balance sheet, with gains or losses recognized in earnings. The carrying value of the hedged debt is adjusted for changes in fair value attributable to the hedged interest rate risk; the associated gain or loss is recognized concurrently in earnings. So long as the hedge is considered highly effective, the net impact on earnings is nil.

The following tables provide fair value information of the hedging instrument and the effect of the hedging instrument during the period:

	2011
Derivative designated as hedging instrument	Balance sheet location	Fair Value

Interest rate swaps	Other assets (non-current)	$	332

During 2010, the Company settled two interest rate swap agreements for a cash gain in the amount of $669. This gain is amortized over the remaining life of the underlying debt which has a final maturity of April 1, 2015.

Fair values of financial instruments

The following table provides the financial assets and liabilities carried at fair value measured on a recurring basis as of December 31, 2011:

	Carrying value at		Fair value measurements
	December 31, 2011		Level 1		Level 2		Level 3


Interest rate swap asset	$	332	$	-	$	332	$	-
Contingent consideration liability		12,844		-		-		12,844

The fair value of the interest rate swap liability was determined using widely accepted valuation techniques. The inputs to the measurement of the fair value of contingent consideration related to acquisitions made after December 31, 2008 are Level 3 inputs. The fair value measurements were made using a discounted cash flows approach; significant model inputs were expected future operating cash flows and discount rates. Changes in the fair value of the contingent consideration liability are comprised of the following:

Balance, December 31, 2010	$	13,312
Amounts recognized on acquisitions		3,482
Fair value adjustments (note 5)		969
Resolved and settled in cash		(1,806)
Resolved and recorded in "Accrued liabilities"		(3,109)
Foreign exchange		(4)
Balance, December 31, 2011	$	12,844

Less: current portion	$	2,678
Non-current portion	$	10,166

The carrying amounts for cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair values due to the short maturity of these instruments, unless otherwise indicated. The following are estimates of the fair values for other financial instruments:

	2011				2010
	Carrying amount		Fair value		Carrying amount		Fair value

Other receivables	$	6,684	$	6,684	$	8,452	$	8,452
Investment in Colliers International UK plc		-		-		8,993		12,677
Long-term debt		316,415		332,918		240,740		258,930
Convertible debentures		77,000		83,930		77,000		95,865

Other receivables include notes receivable from minority shareholders and other non-current receivables. The investment in Colliers International UK plc is included under the balance sheet caption “Other assets”.