Memorex 2012 Annual Report Download - page 89

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Other Assets and Liabilities
Contingent Consideration. Contingent consideration recorded for earn-out payments related to our acquisitions is
recorded at fair value and remeasured on a recurring basis. We use the income approach in calculating the fair value of our
contingent consideration. Changes in the fair value of our contingent consideration obligations are recognized as a fair value
adjustment within restructuring and other in our Consolidated Statements of Operations. These fair value measurements are
calculated using the income approach with cash flow projections based on significant inputs not observable in the market and
therefore represent Level 3 measurements. See Note 4 — Acquisitions for further discussion of the fair value calculation of
our contingent consideration as of December 31, 2012. The following table sets forth a summary of changes in the fair value
of our contingent consideration Level 3 liabilities:
MXI Security Encryptx Total
(In millions)
Balance as of December 31, 2010 ................................. $ — $ — $ —
Addition from acquisitions ....................................... 9.2 1.3 10.5
Balance as of December 31, 2011 ................................. 9.2 1.3 10.5
Fair value adjustment .......................................... (8.6) — (8.6)
Payments ................................................... — (0.7) (0.7)
Balance as of December 31, 2012 ................................. $0.6 $0.6 $ 1.2
Other
The carrying value of accounts receivable and accounts payable approximate their fair values due to the short-term
duration of these items. Additionally, our borrowings of $20.0 million of outstanding debt under the Amended Credit
Agreement at December 31, 2012, as further described in Note 11 — Debt, approximates fair value due to the short nature of
this debt.
Note 13 — Shareholders’ Equity
Shareholder Rights Plan
Effective February 11, 2013, our Board of Directors amended the Rights Agreement dated as of June 21, 2006 to
change the final expiration date from July 1, 2016 to February 11, 2013, effectively terminating the Rights Agreement. This
amendment had no accounting implications to the Company.
Treasury Stock
On May, 2, 2012 our Board of Directors authorized a share repurchase program that allowed for the repurchase of
5.0 million shares of common stock. Since the inception of this authorization we have repurchased 1.2 million shares of
common stock for $6.5 million and, as of December 31, 2012 we had authorization to repurchase up to 3.8 million additional
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