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FAIR VALUES OF ASSETS AND LIABILITIES (Tables)

3 Months Ended

Jun. 30, 2012

FAIR VALUES OF ASSETS AND LIABILITIES

Schedule of assets and liabilities that are measured and recorded at fair value on a recurring basis

					Estimated Fair Value Measurements
Items Measured at Fair Value on a		Carrying			Quoted Prices in Active Markets			Significant Other Observable Inputs			Significant Unobservable Inputs
Recurring Basis		Value			(Level 1)			(Level 2)			(Level 3)
		(in thousands)
June 30, 2012:
Assets:
Money market funds		$	34		$	34		$	—		$	—
Liabilities:
Contingent consideration (1)		$	11,522		$	—		$	—		$	11,522

December 31, 2011:
Assets:
Money market funds		$	34		$	34		$	—		$	—
Liabilities:
Contingent consideration (1)		$	16,226		$	—		$	—		$	16,226

(1) The contingent consideration represents the estimated fair value of the additional potential earn-out opportunity payable in connection with our acquisition of De Novo that is contingent upon future operating revenue growth. We estimated the fair value using management’s estimate of projected revenue over the earn-out period as well as the probability of earn-out achievement and applied a discount rate to the projected earn-out payments that approximated the weighted average cost of capital.

A hypothetical 1% decrease in the discount rate used in calculating the fair value of the De Novo contingent consideration would have resulted in approximately a $0.2 million increase in the fair value of the contingent consideration and a hypothetical 1% increase related to our revenue assumptions as they relate to the De Novo contingent consideration would have resulted in approximately a $0.2 million increase in the fair value of the contingent consideration.

Schedule of fair value of contingent consideration that are measured using significant unobservable inputs

		Fair Value Measurements Using Significant Unobservable Inputs (Level 3) (in thousands)
		Contingent Consideration

Beginning balance December 31, 2011		$	16,226
Increase in fair value related to accretion		767
Decrease in fair value of contingent consideration obligation		(5,471		)
Ending balance June 30, 2012		$	11,522

Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.

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