Fair Value Measurements

12 Months Ended

Dec. 31, 2012

Fair Value Measurements [Abstract]

Fair Value Measurements

(4) Fair Value Measurements

The accounting guidance for using fair value to measure certain assets and liabilities establishes a three tier value hierarchy, which prioritizes the inputs to valuation techniques used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little, if any, market data exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing the asset or liability.

The following table summarizes the assets and liabilities measured at fair value on a recurring basis at December 31, 2012 and 201 (in thousands):

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value Measurements
December 31, 2012:
Assets:
Derivatives	$	—	$	—	$	—	$	—
Liabilities:
Derivatives	$	—	$	1,525	$	—	$	1,525
Contingent liabilities		—		—		28,067		28,067
	$	—	$	1,525	$	28,067	$	29,592

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value Measurements
December 31, 2011:
Assets:
Derivatives	$	—	$	—	$	—	$	—
Liabilities:
Derivatives	$	—	$	9,597	$	—	$	9,597
Contingent liability		—		—		22,600		22,600
	$	—	$	9,597	$	22,600	$	32,197

In connection with the acquisition of Allied on November 1, 2012, Allied's former owners are eligible to receive up to an additional $10,000,000 payable in 2013 through 2015, contingent on developments with the sugar provisions in the United States Farm Bill.  The fair value of the contingent liability recorded at the acquisition date was $9,756,000.  The fair value of the contingent liability is based on a valuation of the estimated fair value of the liability after probability weighting and discounting various potential payments.  The increase in the fair value of the contingent liability of $11,000 in 2012 was charged to selling, general and administrative expense.  As of December 31, 2012, the Company had recorded a contingent liability of $9,767,000.

In connection with the acquisition of United on April 15, 2011, United's former owners are eligible to receive a three-year earnout provision for up to an additional $50,000,000 payable in 2014, dependent on achieving certain financial targets. The fair value of the contingent earnout liability recorded at the acquisition date was $16,300,000. The fair value of the earnout is based on a valuation of the estimated fair value of the liability after probability weighting and discounting various potential payments. The decrease in the fair value of the earnout liability of $4,300,000 for 2012 was credited to selling, general and administrative expense. As of December 31, 2012, the Company had recorded an earnout liability of $18,300,000 compared with $22,600,000 as of December 31, 2011.

Cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities have carrying values that approximate fair value due to the short-term maturity of these financial instruments. The Company is of the opinion that amounts included in the consolidated financial statements for outstanding debt materially represent the fair value of such debt due to their variable interest rates.

Certain assets are measured at fair value on a nonrecurring basis and therefore are not included in the table above. These assets are adjusted to fair value when there is evidence of impairment. During the years ended December 31, 2012 and 2011, there was no indication that the Company's long-lived assets were impaired, and accordingly, measurement at fair value was not required.