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Fair Value Measurements (Tables)
12 Months Ended
Dec. 31, 2012
Fair Value Disclosures [Abstract]  
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis
Our financial assets and (liabilities) carried at fair value measured on a recurring basis as of December 31, 2012 and 2011, consisted of the following (in thousands):

 
 
 
 
Fair Value Measurements Using
 
 
Total Fair
 
Quoted prices in
 
Significant other
 
Significant
 
 
Value at
 
active markets
 
observable inputs
 
Unobservable inputs
Description
 
December 31, 2012
 
(Level 1)
 
(Level 2)
 
(Level 3)
 
 
 
 
 
 
 
 
 
Interest rate swap (1)
 
$
(1,788
)
 
$

 
$
(1,788
)
 
$

 
 
 
 
 
 
 
 
 
 
 
 
 
Fair Value Measurements Using
 
 
Total Fair
 
Quoted prices in
 
Significant other
 
Significant
 
 
Value at
 
active markets
 
observable inputs
 
Unobservable inputs
Description
 
December 31, 2011
 
(Level 1)
 
(Level 2)
 
(Level 3)
 
 
 
 
 
 
 
 
 
Marketable securities (2)
 
$
2,798

 
$
2,798

 
$

 
$

 
 
 
 
 
 
 
 
 



(1)    The fair value of the interest rate swap is determined based on forward yield curves.

(2)    Our marketable securities, which consist entirely of available-for-sale equity securities, are valued using market prices in active markets. Level 1 instrument valuations are obtained from real-time quotes for transactions in active exchange markets involving identical assets.

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation
Changes in the fair value of our contingent liability during the years ended December 31, 2012 and 2011 consisted of the following (in thousands):

 
2012
 
2011
Beginning balance
$
1,290

 
$

Contingent consideration liability recorded as the result of acquisitions (see Note 2)
4,704

 
1,270

Initial purchase price adjustments finalized over the period (see Note 2)
280

 

Fair value adjustments recorded to expense during the period
480

 
20

Contingent payments made
(57
)
 

Ending balance
$
6,697

 
$
1,290

Fair Value Inputs, Liabilities, Quantitative Information
The recurring Level 3 measurement of our contingent consideration liability includes the following significant unobservable inputs at December 31, 2012 and 2011 (amount in thousands):
Contingent consideration liability
 
Fair value at December 31, 2012
 
Valuation technique
 
Unobservable inputs
 
Range
Revenue-based payments
 
$
6,370

 
Discounted cash flow

 
Discount rate
 
10% - 14.5%
 
 
 
 
 
Probability of milestone payment
 
90%
 
 
 
 
 
 
Projected year of payments
 
2013-2028
 
 
 
 
 
 
 
 
 
Other payments
 
327

 
Discounted cash flow

 
Discount rate
 
4.5%
 
 
 
 
 
Probability of milestone payment
 
100%
 
 
 
 
 
 
Projected year of payments
 
2013-2015
 
 
 
 
 
 
 
 
 
Contingent consideration liability
 
Fair value at December 31, 2011
 
Valuation technique
 
Unobservable inputs
 
Range
Revenue-based payments
 
$
1,290

 
Discounted cash flow

 
Discount rate
 
10% - 14.5%
 
 
 
 
 
Probability of milestone payment
 
90%
 
 
 
 
 
 
Projected year of payments
 
2012-2028