Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2019

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 June 30, 2019 and December 31, 2018, 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	June 30, 2019			(Level 1)		(Level 2)			(Level 3)
Interest rate contracts ⁽¹⁾	$	1,907		$	—	$	1,907		$	—
Foreign currency contract assets, current and long-term ⁽²⁾	$	1,433		$	—	$	1,433		$	—
Foreign currency contract liabilities, current and long-term ⁽³⁾	$	(2,418	)	$	—	$	(2,418	)	$	—
Contingent receivable asset	$	625		$	—	$	—		$	625
Contingent consideration liabilities	$	(93,204	)	$	—	$	—		$	(93,204	)

				Fair Value Measurements Using
	Total Fair			Quoted prices in		Significant other			Significant
	Value at			active markets		observable inputs			unobservable inputs
Description	December 31, 2018			(Level 1)		(Level 2)			(Level 3)
Interest rate contracts ⁽¹⁾	$	5,772		$	—	$	5,772		$	—
Foreign currency contract assets, current and long-term ⁽²⁾	$	1,578		$	—	$	1,578		$	—
Foreign currency contract liabilities, current and long-term ⁽³⁾	$	(1,608	)	$	—	$	(1,608	)	$	—
Contingent receivable asset	$	607		$	—	$	—		$	607
Contingent consideration liabilities	$	(82,236	)	$	—	$	—		$	(82,236	)

(1) The fair value of the interest rate contracts is determined using Level 2 fair value inputs and is recorded as other assets or other long-term obligations in the consolidated balance sheets.

(2) The fair value of the foreign currency contract assets (including those designated as hedging instruments and those not designated as hedging instruments) is determined using Level 2 fair value inputs and is recorded as prepaid expenses and other assets or other long-term assets in the consolidated balance sheets.

(3) The fair value of the foreign currency contract liabilities (including those designated as hedging instruments and those not designated as hedging instruments) is determined using Level 2 fair value inputs and is recorded as accrued expenses or other long-term obligations in the consolidated balance sheets.

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

Changes in the fair value of our contingent consideration liabilities during the three and six-month periods ended June 30, 2019 and 2018, consisted of the following (in thousands):



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Beginning balance	$	82,457		$	10,928		$	82,236		$	10,956
Contingent consideration liability recorded as the result of acquisitions (see Note 5)	8,400			—			8,380			—
Fair value adjustments recorded to income	2,404			99			3,199			86
Contingent payments made	(57		)	(115		)	(611		)	(130		)
Ending balance	$	93,204		$	10,912		$	93,204		$	10,912

Fair Value Inputs, Liabilities, Quantitative Information

The recurring Level 3 measurement of our contingent consideration liability and contingent receivable included the following significant unobservable inputs at June 30, 2019 and December 31, 2018 (amounts in thousands):



Contingent consideration asset or liability	Fair value at June 30, 2019		Valuation technique	Unobservable inputs	Range
Revenue-based royalty	$	9,843	Discounted cash flow	Discount rate	14% - 25%
payments contingent liability			Discounted cash flow	Projected year of payments	2019-2034

Supply chain milestone	$	15,000	Scenario-based method	Discount rate	3.9%
contingent liability				Probability of milestone payment	100%
				Projected year of payments	2019

Revenue milestones	$	65,661	Monte Carlo simulation	Discount rate	3.1% - 19.5%
contingent liability			Monte Carlo simulation	Projected year of payments	2019-2022

Regulatory approval	$	2,700	Scenario-based method	Discount rate	5.3%
contingent liability				Probability of milestone payment	65%
				Projected year of payment	2022

Contingent receivable	$	625	Discounted cash flow	Discount rate	10%
asset			Discounted cash flow	Probability of milestone payment	54%
				Projected year of payments	2019



Contingent consideration asset or liability	Fair value at December 31, 2018		Valuation technique	Unobservable inputs	Range
Revenue-based royalty	$	10,661	Discounted cash flow	Discount rate	9.9% - 25%
payments contingent liability			Discounted cash flow	Projected year of payments	2018-2037

Supply chain milestone	$	13,593	Discounted cash flow	Discount rate	5.3%
contingent liability			Discounted cash flow	Probability of milestone payment	95%
				Projected year of payments	2019

Revenue milestones	$	57,982	Discounted cash flow	Discount rate	3.3% - 13%
contingent liability			Discounted cash flow	Projected year of payments	2019-2023

Contingent receivable	$	607	Discounted cash flow	Discount rate	10%
asset			Discounted cash flow	Probability of milestone payment	67%
				Projected year of payments	2019