Acquisitions

Contingent Consideration

In connection with certain of the Company’s acquisitions, contingent consideration is payable in cash or common stock upon the achievement of certain performance measures over future periods. The Company recorded the acquisition date fair value of the contingent consideration liability as additional purchase price. As discussed in Note 12, the process for determining the fair value of the contingent consideration liability consists of reviewing financial forecasts and assessing the likelihood of reaching the required performance measures based on factors specific to each acquisition as well as the Company’s historical experience with similar arrangements. Subsequent to the acquisition date, the Company estimates the fair value of the contingent consideration liability each reporting period, and any adjustments made to the fair value are recorded in the Company’s results of operations.

The Company has recorded $22.2 million in contingent consideration at December 31, 2015 related to these arrangements. During the years ended December 31, 2015, 2014 and 2013, the Company recorded income of $0.3 million, $37.9 million and $31.3 million for changes in the fair value of contingent consideration, reflecting the net reductions in the liability for each of those periods.

For the years ended December 31, 2014 and 2013, the Company’s fair value adjustment to the contingent consideration liability includes adjustments of $7.2 million and $26.6 million, respectively, to reduce the liability relating to the Productions Graphics acquisition in 2011. See Note 9 for more information on Productions Graphics.

For the year ended December 31, 2014, the Company’s fair value adjustment to the contingent consideration liability also includes an adjustment of $30.4 million to reduce the liability relating to the DB Studios acquisition in 2013 due to a decrease in forecasted results. As of December 31, 2015, the fair value of the potential remaining $44.3 million contingent consideration payments for DB Studios was estimated to be $3.3 million.

As of December 31, 2015, the potential maximum contingent consideration payments and their respective fair values are payable as follows (in thousands):



	Maximum Potential Payment		Fair Value of Liability
2016	$	39,653	$	11,387
2017	46,201		10,775
Total	$	85,854	$	22,162

If the performance measures required by the purchase agreements are not achieved, the Company may pay less than the maximum amounts presented in the table above, depending on the terms of the agreement. While the maximum potential payments shown in the table are $85.9 million, the Company estimates the fair value of the payments that will be made is $22.2 million.

Shares Issued as Consideration for Acquisitions

Purchase agreements entered by the Company for business combinations often state that the purchase price, including contingent consideration, is to be paid in shares of the Company’s common stock. The value of the shares for each issuance is determined by the closing price of the Company’s common stock on dates specified in each separate agreement. Generally, the date that determines the share value is the date of the purchase agreement, the last date in a contingent consideration measurement period, or the date of issuance to the sellers.

The following table presents the number of shares issued as consideration for acquisitions and contingent consideration and the corresponding value of those shares during the years ended December 31, 2015, 2014 and 2013 (in thousands, except per share amounts):



	Shares of Common Stock Issued	Value of Shares		Average Share Value
Year ended December 31, 2015:
Payments for acquisitions	—	$	—	$	—
Payments of contingent consideration	238	1,570		6.59
Total	238	$	1,570	$	6.59

Year ended December 31, 2014:
Payments for acquisitions	—	$	—	$	—
Payments of contingent consideration	1,092	9,034		8.27
Total	1,092	$	9,034	$	8.27

Year ended December 31, 2013:
Payments for acquisitions	223	$	2,489	$	11.17
Payments of contingent consideration	199	2,723		13.66
Total	422	$	5,212	$	12.35