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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2020

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

Our financial assets and (liabilities) carried at fair value and measured on a recurring basis as of June 30, 2020 and December 31, 2019 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
	June 30, 2020		(Level 1)		(Level 2)		(Level 3)
Interest rate contracts ⁽¹⁾	$	(5,310)	$	—	$	(5,310)	$	—
Foreign currency contract assets, current and long-term ⁽²⁾	$	1,986	$	—	$	1,986	$	—
Foreign currency contract liabilities, current and long-term ⁽³⁾	$	(3,913)	$	—	$	(3,913)	$	—
Contingent consideration liabilities	$	(69,100)	$	—	$	—	$	(69,100)


			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)

(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 expenses and other current 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


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Beginning balance	$	68,869	$	82,457	$	76,709	$	82,236
Contingent consideration liability recorded as the result of acquisitions		—		8,400		—		8,380
Contingent consideration expense		343		2,404		5,240		3,199
Contingent payments made		(107)		(57)		(12,861)		(611)
Effect of foreign exchange		(5)		—		12		—
Ending balance	$	69,100	$	93,204	$	69,100	$	93,204

Fair Value Inputs, Liabilities, Quantitative Information

The recurring Level 3 measurement of our contingent consideration liabilities included the following significant unobservable inputs at June 30, 2020 and December 31, 2019 (amounts in thousands):


	Fair value at
	June 30,		Valuation
Contingent consideration liability	2020		technique	Unobservable inputs	Range	Weighted Average⁽¹⁾
Revenue-based royalty payments contingent liability	$	7,930	Discounted cash flow	Discount rate	12% - 24%	16.0%
				Projected year of payments	2020-2034	2026

Revenue milestones contingent liability	$	58,170	Monte Carlo simulation	Discount rate	11% - 15%	12.6%
				Projected year of payments	2020-2023	2022

Regulatory approval contingent liability	$	3,000	Scenario-based method	Discount rate	2.7%
				Probability of milestone payment	65%
				Projected year of payment	2022
⁽¹⁾ Unobservable inputs were weighted by the relative fair value of the instruments. No weighted average is reported for unobservable inputs related to a single financial asset or liability.


	Fair value at
	December 31,		Valuation
Contingent consideration 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

Schedule of Rollforward of Allowance for Credit Losses


	Three Months Ended		Six Months Ended
	June 30, 2020		June 30, 2020
Beginning balance	$	670	$	—
Cumulative effect adjustment upon adoption of ASU 2016-13, Credit Losses		—		575
Provision for credit loss expense		87		182
Ending balance	$	757	$	757