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Fair Value Measurements
 3 Months Ended
Mar. 31, 2012
Fair Value Measurements [Abstract]  
Fair Value Measurements
3. Fair Value Measurements

The Company records its financial assets and liabilities at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability, in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants at the measurement date.

The authoritative guidance establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. These levels are: Level 1 (inputs are quoted prices in active markets for identical assets or liabilities); Level 2 (inputs are other than quoted prices that are observable, either directly or indirectly through corroboration with observable market data); and Level 3 (inputs are unobservable, with little or no market data that exists, such as internal financial forecasts). The Company is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

 

The following table summarizes information regarding the Company's financial assets and financial liabilities that are measured at fair value (in thousands):

 

     Balance at
March 31,
2012		     Level 1      Level 2     Level 3  

Description

          

Financial Assets

          

Escrow account

    $ 897      $ 897       $ —        $ —     

Deferred compensation plan assets

      4,616        4,616         —          —     

Derivatives

      4        —           4        —     
  

 

 

    

 

 

     

 

 

    

 

 

  

Total Assets

    $ 5,517      $ 5,513       $ 4      $ —     
  

 

 

    

 

 

     

 

 

    

 

 

  

Financial Liabilities

          

Derivatives

    $ (213 )    $ —         $ (213 )    $ —     
  

 

 

    

 

 

     

 

 

    

 

 

  
     Balance at
December 31,
2011		     Level 1      Level 2     Level 3  

Description

          

Financial Assets

          

Escrow account

    $ 897      $ 897       $ —        $ —     

Deferred compensation plan assets

      4,575        4,575         —          —     

Derivatives

      153        —           153        —     
  

 

 

    

 

 

     

 

 

    

 

 

  

Total Assets

    $ 5,625      $ 5,472       $ 153      $ —     
  

 

 

    

 

 

     

 

 

    

 

 

  

Financial Liabilities

          

Derivatives

    $ (108 )    $ —         $ (108 )    $ —     
  

 

 

    

 

 

     

 

 

    

 

 

  

The escrow account, consisting of a money market mutual fund, is valued using quoted market prices in active markets classified as Level 1 within the fair value hierarchy. The deferred compensation plan assets consists of cash and several publicly traded stock and bond mutual funds, valued using quoted market prices in active markets classified as Level 1 within the fair value hierarchy. The Company's derivatives consist of foreign currency cash flow hedges and are valued using various pricing models or discounted cash flow analyses that incorporate observable market parameters, such as interest rate yield curves and currency rates, and are classified as Level 2 within the valuation hierarchy. Derivative valuations incorporate credit risk adjustments that are necessary to reflect the probability of default by the counterparty or the Company.

The net carrying amounts of cash and cash equivalents, trade and other receivables, accounts payable, accrued liabilities and note payable to financial institution approximate fair value due to the short-term nature of these instruments. The fair value of our debt is calculated using a coupon rate on borrowings with similar maturities, current remaining average life to maturity, borrower credit quality, and current market conditions, all of which are classified as Level 2 within the valuation hierarchy. The fair value of the Company's long-term debt, including the current portion, was $13.6 million and the carrying value was $15.0 million at March 31, 2012, and $16.1 million with a carrying value of $17.8 million at December 31, 2011.

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

We measure our financial assets, including loans receivable and non-marketable equity method investments, at fair value on a non-recurring basis when they are determined to be other-than-temporarily impaired. The fair value of these assets is determined using Level 3 unobservable inputs due to the absence of observable market inputs and the valuations requiring management judgment. There were no impairment charges taken during the three months ended March 31, 2012 or March 31, 2011. All loans receivable are categorized as Level 3 in the fair value hierarchy.