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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2021

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 September 30, 2021 and December 31, 2020 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
	September 30, 2021		(Level 1)		(Level 2)		(Level 3)
Interest rate contract liabilities, long-term ⁽¹⁾	$	(2,540)	$	—	$	(2,540)	$	—
Foreign currency contract assets, current and long-term ⁽²⁾	$	2,439	$	—	$	2,439	$	—
Foreign currency contract liabilities, current and long-term ⁽³⁾	$	(3,093)	$	—	$	(3,093)	$	—
Contingent consideration liabilities	$	(48,483)	$	—	$	—	$	(48,483)


			Fair Value Measurements Using
	Total Fair		Quoted prices in		Significant other		Significant
	Value at		active markets		observable inputs		unobservable inputs
	December 31, 2020		(Level 1)		(Level 2)		(Level 3)
Interest rate contract liabilities, current and long-term ⁽¹⁾	$	(4,358)	$	—	$	(4,358)	$	—
Foreign currency contract assets, current and long-term ⁽²⁾	$	3,078	$	—	$	3,078	$	—
Foreign currency contract liabilities, current and long-term ⁽³⁾	$	(8,267)	$	—	$	(8,267)	$	—
Contingent consideration liabilities	$	(55,750)	$	—	$	—	$	(55,750)

(1)	The fair value of the interest rate contracts is determined using Level 2 fair value inputs and is recorded as accrued expenses 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

Changes in the fair value of our contingent consideration liabilities during the three and nine-month periods ended September 30, 2021 and 2020 consisted of the following (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Beginning balance	$	57,477	$	69,100	$	55,750	$	76,709
Contingent consideration expense (benefit)		1,115		(4,356)		3,322		884
Contingent payments made		(10,090)		(130)		(10,579)		(12,991)
Effect of foreign exchange		(19)		51		(10)		63
Ending balance	$	48,483	$	64,665	$	48,483	$	64,665

Fair Value Inputs, Liabilities, Quantitative Information

The recurring Level 3 measurement of our contingent consideration liabilities included the following significant unobservable inputs at September 30, 2021 and December 31, 2020 (amounts in thousands):


	Fair value at
	September 30,		Valuation			Weighted
Contingent consideration liability	2021		technique	Unobservable inputs	Range	Average⁽¹⁾
Revenue-based royalty payments contingent liability	$	3,560	Discounted cash flow	Discount rate	14% - 16%	15.3%
				Projected year of payments	2021-2034	2026

Revenue milestones contingent liability	$	41,051	Monte Carlo simulation	Discount rate	10.5% - 14%	10.6%
				Projected year of payments	2021-2030	2022

Regulatory approval contingent liability	$	3,872	Scenario-based method	Discount rate	1%
				Probability of milestone payment	80%
				Projected year of payment	2024


	Fair value at
	December 31,		Valuation			Weighted
Contingent consideration liability	2020		technique	Unobservable inputs	Range	Average⁽¹⁾
Revenue-based royalty payments contingent liability	$	4,545	Discounted cash flow	Discount rate	12% - 15%	13.5%
				Projected year of payments	2021-2034	2026

Revenue milestones contingent liability	$	46,305	Monte Carlo simulation	Discount rate	7.5% - 12%	9.0%
				Projected year of payments	2021-2030	2022

Regulatory approval contingent liability	$	4,900	Scenario-based method	Discount rate	1%
				Probability of milestone payment	100%
				Projected year of payment	2021-2024	2022

(1)	Unobservable inputs were weighted by the relative fair value of the instruments. No weighted average is reported for contingent consideration liabilities without a range of unobservable inputs.

Schedule of Rollforward of Allowance for Credit Losses

. The table below presents a rollforward of the allowance for current expected credit losses on our notes receivable for the three and nine-month periods ended September 30, 2021 and 2020 (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Beginning balance	$	1,107	$	757	$	730	$	—
Cumulative effect adjustment upon adoption of ASU 2016-13, Credit Losses		—		—		—		575
Provision for credit loss expense		113		46		490		228
Ending balance	$	1,220	$	803	$	1,220	$	803