Fair Value Measurements

6 Months Ended

Jun. 30, 2011

Fair Value Measurements

Fair Value Measurements

(10) FAIR VALUE MEASUREMENTS

The Company measures certain financial assets and liabilities at fair value on a recurring basis, including available-for-sale fixed income securities and foreign currency derivatives. The tables below present the fair value of these financial assets and liabilities determined using the following input levels at June 30, 2011 and December 31, 2010.

	Fair Value Measurements at June 30, 2011
	Total		Quoted Price in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash and cash equivalents
Overnight deposits	$	98,192	$	98,192	$	0	$	0
Money market instruments		14,764		0		14,764		0
Total cash and cash equivalents	$	112,956	$	98,192	$	14,764	$	0
Available-for-sale securities
Short-term
Certificates of deposit	$	26,762	$	0	$	26,762	$	0
Commercial paper		35,725		0		35,725		0
Corporate securities		73,466		0		73,466		0
U.S. Government agency securities		10,011		0		10,011		0
Long-term
Certificates of deposit		33,474		0		33,474		0
Commercial paper		0		0		0		0
Corporate securities		66,366		0		66,366		0
U.S. Government agency securities		53,366		0		53,366		0
Total available-for-sale securities	$	299,170	$	0	$	299,170	$	0
Deferred compensation asset (1)		3,379		0		3,379		0
Total assets	$	415,505	$	98,192	$	317,313	$
Liabilities:
Deferred compensation liability (3)	$	8,070	$	4,692	$	3,378	$	0
Forward foreign currency exchange contract liability (2)		6,265		0		6,265		0
Contingent acquisition consideration payable (4)		38,786		0		0		38,786
Total liabilities	$	53,121	$	4,692	$	9,643	$	38,786

	Fair Value Measurements at December 31, 2010
	Total		Quoted Price in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash and cash equivalents
Overnight deposits	$	51,647	$	51,647	$	0	$	0
Money market instruments		36,432		0		36,432		0
Total cash and cash equivalents	$	88,079	$	51,647	$	36,432	$	0
Available-for-sale securities
Short-term
Certificates of deposit	$	29,845	$	0	$	29,845	$	0
Commercial paper		27,457		0		27,457		0
Corporate securities		80,186		0		80,186		0
U.S. Government agency securities		48,545		0		48,545		0
Long-term
Certificates of deposit		25,848		0		25,848		0
Commercial paper		0		0		0		0
Corporate securities		72,329		0		72,329		0
U.S. Government agency securities		29,994		0		29,994		0
Total available-for-sale securities	$	314,204	$	0	$	314,204	$	0
Deferred compensation asset (1)		2,748		0		2,748		0
Forward foreign currency exchange contract asset (2)		1,496		0		1,496		0
Total assets	$	406,527	$	51,647	$	354,880	$	0
Liabilities:
Deferred compensation liability (3)	$	5,560	$	2,812	$	2,748	$	0
Forward foreign currency exchange contract liability (2)		1,673		0		1,673		0
Contingent acquisition consideration payable (4)		43,718		0		0		43,718
Total liabilities	$	50,951	$	2,812	$	4,421	$	43,718

(1) At June 30, 2011 and December 31, 2010, 93% and 97% of the deferred compensation asset balance was included in other assets and the remainder of the balance was included in other current assets on the Company's Condensed Consolidated Balance Sheets.

(2) See Note 8 for further information regarding the Company's derivative instruments.

(3) At June 30, 2011 and December 31, 2010, 92% and 94%, respectively, of the deferred compensation liability balance was included in other long-term liabilities and the remainder was included in accounts payable and accrued liabilities on the Condensed Company's Consolidated Balance Sheets.

(4) At June 30, 2011 and December 31, 2010, 92% and 80%, respectively, of the contingent acquisition consideration payable was included in other long-term liabilities, respectively, and 8% and 20%, respectively, was included in accounts payable, accrued liabilities and other current assets.

The Company's level 2 securities are valued using third-party pricing sources, which generally use interest rates and yield curves observable at commonly quoted intervals of similar assets as observable inputs for pricing. See Note 4 for further information regarding the Company's financial instruments.

The Company's level 3 liabilities are estimated using a probability-based income approach utilizing an appropriate discount rate. Subsequent changes in the fair value of the contingent acquisition consideration payable, resulting from the revision of key assumptions, will be recorded in intangible asset amortization and contingent consideration on the Company's Condensed Consolidated Statements of Operations.

During the three and six months ended June 30, 2011, the fair value of the contingent acquisition consideration payable decreased by $4.1 million and $4.9 million, respectively, due to changes in estimated probability and assumed timing of achievement of certain milestones. Approximately $0.3 million of this change was recorded as a reduction to goodwill during the first quarter of 2011 due to an adjustment to the original assumptions related to the acquisition of LEAD Therapeutics, Inc. Key assumptions used by management to estimate the fair value of contingent acquisition consideration payable include assumed probabilities, timing of when a milestone may be attained and assumed discount periods and rates.

See Notes 5, 6 and 7, to the Company's Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2010 for additional discussion related to business acquisitions and contingent acquisition consideration payable.