Fair Value Measurement

6 Months Ended

Jun. 30, 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 June 30, 2013 and December 31, 2012, about the Company’s financial liabilities. 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):

	June 30, 2013
	Level 1		Level 2		Level 3		Fair Value
Contingent purchase price related to acquisitions	$	—	$	—	$	23,698	$	23,698
Total liabilities at fair value	$	—	$	—	$	23,698	$	23,698

	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 and six months ended June 30, 2013 and 2012 and the twelve months ended December 31, 2012 (in thousands):

	Three Months Ended June 30,					Six Months Ended June 30,						Twelve Months Ended December 31,
	2013			2012		2013			2012			2012
Balance, beginning of period	$	21,613		$	3,480	$	20,907		$	3,015		$	3,015
Earnouts and adjustments related to acquisitions	5,348			3,668		5,778			4,362			17,733
Payment of contingent purchase obligations	(2,407		)	—		(2,407		)	(284		)	(284		)
Adjustment to contingent purchase obligation	(856		)	62		(580		)	117			443
Balance, end of period	$	23,698		$	7,210	$	23,698		$	7,210		$	20,907