Fair Value Measurement

3 Months Ended

Mar. 31, 2014

Fair Value Measurement [Abstract]

Fair Value Measurement

7. Fair Value Measurement

Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets and liabilities carried at fair value are classified in one of three categories which are described below.

• Level 1 — Quoted prices in active markets for identical assets or liabilities.

• Level 2 — Inputs, other than quoted market prices in active markets, that are observable either directly or indirectly.

• Level 3 — Unobservable inputs based on our own assumptions.

The following table sets forth our assets and liabilities that are measured at fair value on a recurring basis at March 31, 2014:

( in thousands )
	Total		Level 1		Level 2		Level 3
Assets -
Cash equivalents	$	128,142	$	128,142
Liabilities -
Derivative liability	$	1,284			$	1,284
Temporary equity -
Redeemable noncontrolling interest	$	131,670					$	131,670

The following table sets forth our assets and liabilities that are measured at fair value on a recurring basis at December 31, 2013:

( in thousands )
	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	408,142	$	408,142
Derivative asset		252			$	252
Total assets	$	408,394	$	408,142	$	252
Temporary equity -
Redeemable noncontrolling interest	$	133,000					$	133,000

Derivatives include freestanding foreign currency forward contracts which are marked to market at each reporting period. We classify our foreign currency forward contracts within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments.

We determine the fair value of the redeemable noncontrolling interest using a combination of a discounted cash flow valuation model and a market approach that applies revenues and EBITDA estimates against the calculated multiples of comparable companies. Operating revenues and EBITDA are key assumptions utilized in both the discounted cash flow valuation model and the market approach. The selected discount rate of approximately 11% is also a key assumption in our discounted cash flow valuation model (Refer to Note 12—Redeemable Noncontrolling Interest and Noncontrolling Interest for additional information).

The following table summarizes the activity for account balances whose fair value measurements are estimated utilizing level 3 inputs:

( in thousands )	Redeemable Noncontrolling Interest
	Three months ended
	March 31,
	2014			2013
Beginning period balance	$	133,000		$	136,500
Dividends paid to noncontrolling interest		(5,250	)
Net income		3,920			4,505
End period balance	$	131,670		$	141,005

The net income amounts reflected in the table above are reported within the “net income attributable to noncontrolling interests” line in our condensed consolidated statements of operations.

Other Financial Instruments—The carrying values of our financial instruments do not materially differ from their estimated fair values as of 2014 and 2013 except for debt, which is disclosed in note 9.