Fair Value Measurement

3 Months Ended

Mar. 31, 2013

Fair Value Disclosures [Abstract]

Fair value measurement

4. Fair Value Measurement

Accounting guidance on fair value measurements for certain financial assets and liabilities requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories:

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

Level 2 — Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3 — Unobservable inputs reflecting the reporting entity’s own assumptions or external inputs from inactive markets.

A financial asset’s or liability’s classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement.

The following table presents information, as of March 31, 2013 and December 31, 2012, about the Company’s financial liabilities. The carrying value of the Company’s long-term debt under the third amended and restated credit agreement approximates fair value as the debt agreement bears interest based on prevailing variable market rates currently available. As a result, the Company categorized the long-term debt as Level 2 in the fair value hierarchy. Contingent purchase price related to acquisitions are measured at fair value on a recurring basis, according to the valuation techniques the Company used to determine their fair values (in thousands):

	March 31, 2013
	Level 1		Level 2		Level 3		Fair Value
Contingent purchase price related to acquisitions	$	—	$	—	$	21,613	$	21,613
Total liabilities at fair value	$	—	$	—	$	21,613	$	21,613

	December 31, 2012
	Level 1		Level 2		Level 3		Fair Value
Contingent purchase price related to acquisitions	$	—	$	—	$	20,907	$	20,907
Total liabilities at fair value	$	—	$	—	$	20,907	$	20,907

In measuring the fair value of the contingent payment liability, the Company used an income approach that considers the expected future earnings of the acquired businesses and the resulting contingent payments, discounted at a risk-adjusted rate.

The table below sets forth a reconciliation of the Company’s beginning and ending Level 3 financial liability balance for the three months ended March 31, 2013 and twelve months ended December 31, 2012 (in thousands):

	March 31, 2013		December 31, 2012
Balance, beginning of period	$	20,907	$	3,015
Earnouts and adjustments related to acquisitions	430		17,733
Payment of contingent purchase obligations	—		(284		)
Adjustment to contingent purchase obligation	276		443
Balance, end of period	$	21,613	$	20,907