Fair Value Measurements

9 Months Ended

Sep. 30, 2011

Fair Value Measurements [Abstract]

Fair Value Measurements

Note 4 – Fair Value Measurements

Fair Value Hierarchy Tables. The fair value measurement accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability. Level 3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company's assessment of the significance of a particular input to the fair value in its entirety requires judgment and considers factors specific to the asset or liability.

The following table presents fair value measurements for recurring financial assets as of September 30, 2011 (in thousands):

	Fair Value Measurements						Liability at fair value
	Level 1		Level 2		Level 3
Acquisition related contingent consideration	$	—	$	—	$	1,000	$	1,000
Interest rate swap agreement				343				343
Total	$	—	$	343	$	1,000	$	1,343

The following table presents changes to the Company's financial liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the nine months ended September 30, 2011 (in thousands) :

	Acquisition- related Contingent Consideration
Balance at beginning of period	$	—
Amounts acquired		1,000
Balance at end of period	$	1,000

The following table presents fair value measurements for recurring financial assets as of December 31, 2010 (in thousands):

	Fair Value Measurements						Liability at fair value
	Level 1		Level 2		Level 3
Interest rate swap agreement	$	—	$	793	$	—	$	793
Total	$	—	$	793	$	—	$	793

Acquisition-related contingent consideration is initially measured and recorded at fair value as an element of consideration paid in connection with an acquisition with subsequent adjustments recognized in other operating expenses in the Consolidated Statements of Income. The Company determines the fair value of acquisition-related contingent consideration, and any subsequent changes in fair value, using a discounted probability-weighted approach, as determined using Level 3 inputs.

The Company measures the value of its interest rate swap agreement relying on a mark-to-market valuation based on yield curves using observable market interest rates for the interest rate swap agreement. As of December 31, 2010 and September 30, 2011, the fair value of the interest rate swap agreement was a liability of $793,000 and $343,000, respectively. For the three months and nine months ended September 30, 2011 the Company recorded unrealized gains of $142,000 and $450,000 respectively, on the interest rate swap agreement in other comprehensive income. For the three months and nine months ended September 30, 2010 the Company recorded unrealized gains of $50,000 and $171,000 respectively, on the interest rate swap agreement in other comprehensive income. On October 3, 2011, the Company terminated the swap agreement and settled its liability for $343,000. For additional information on the interest rate swap agreement, see Notes 12 and 13.

Fair Value Measurements on a Non-Recurring Basis. The Company also measures the fair value of certain assets on a non-recurring basis when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.