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Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

Assets (Liabilities) Measured at Fair Value on a Recurring Basis

Our financial assets and (liabilities) carried at fair value measured on a recurring basis as of December 31, 2019 and 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
	December 31, 2019		(Level 1)		(Level 2)		(Level 3)
Interest rate contract ⁽¹⁾	$	1,192	$	—	$	1,192	$	—
Interest rate contract ⁽¹⁾	$	(290)		—	$	(290)	$	—
Foreign currency contract assets, current and long-term ⁽²⁾	$	2,447	$	—	$	2,447	$	—
Foreign currency contract liabilities, current and long-term ⁽³⁾	$	(4,255)	$	—	$	(4,255)	$	—
Contingent consideration liabilities	$	(76,709)	$	—	$	—	$	(76,709)


			Fair Value Measurements Using
	Total Fair		Quoted prices in		Significant other		Significant
	Value at		active markets		observable inputs		unobservable inputs
	December 31, 2018		(Level 1)		(Level 2)		(Level 3)
Interest rate contract ⁽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 long-term 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 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 liability during the years ended December 31, 2019 and 2018, consisted of the following (in thousands):


	2019		2018
Beginning balance	$	82,236	$	10,956
Contingent consideration liability recorded as the result of acquisitions (see Note 3)		10,517		72,209
Fair value adjustments recorded to income		(304)		(698)
Contingent payments made		(15,740)		(231)
Ending balance	$	76,709	$	82,236

Fair Value Inputs, Liabilities, Quantitative Information

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


	Fair value at
	December 31,		Valuation
Contingent consideration asset or liability	2019		technique	Unobservable inputs	Range
Revenue-based royalty payments contingent liability	$	7,710	Discounted cash flow	Discount rate	13% - 24%
				Projected year of payments	2020-2034

Revenue milestones contingent liability	$	66,114	Monte Carlo simulation	Discount rate	9% - 13.5%
				Projected year of payments	2020-2023

Regulatory approval contingent liability	$	2,885	Scenario-based method	Discount rate	2.4%
				Probability of milestone payment	65%
				Projected year of payment	2022


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

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

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

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