Assets and Liabilities Measured at Fair Value

6 Months Ended

Jun. 30, 2013

Assets and Liabilities Measured at Fair Value [Abstract]

Assets and Liabilities Measured at Fair Value

7.  Assets and Liabilities Measured at Fair Value

Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  A fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements).  The three levels of the fair value hierarchy are described below:

Level 1: Quoted prices in active markets for identical assets or liabilities.

Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The asset or liability's fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.  The valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

Following is a description of the valuation methodologies used for assets and liabilities measured at fair value.  There were no transfers between levels during the three months ended June 30, 2013 and the year ended December 31, 2012.

												2013
												Total
	Assets/Liabilities at Fair Value as of June 30, 2013											Gains
Recurring Fair Value Measurements:	Total		(Level 1)			(Level 2)			(Level 3)			(Losses)
Asset:
Interest rate derivatives (2)	$	55		$	-		$	55		$	-	$	-
	$	55		$	-		$	55		$	-	$	-
Liabilities:
Contingent consideration (1)	$	-		$	-		$	-		$	-	$	7,950
Interest rate derivatives (2)		69			-			69			-		-
	$	69		$	-		$	69		$	-	$	7,950
Non-recurring Fair Value Measurements:
Intangible assets, net (3)	$	57,789		$	-		$	-		$	57,789	$	(4,222	)
	$	57,789		$	-		$	-		$	57,789	$	(4,222	)
	Assets/Liabilities at Fair Value as of December 31, 2012
Recurring Fair Value Measurements:	Total		(Level 1)			(Level 2)			(Level 3)
Liabilities:
Contingent consideration (1)	$	7,950		$	-		$	-		$	7,950

(1)   The Monte Carlo simulation was used with a normal probability distribution of the best estimate of EBITDA for 2013 to approximate fair value.  At June 30, 2013, the EBITDA target is not expected to occur and as such, the $7,950 of contingent consideration was deemed unlikely to be paid, and a benefit was recorded on a separate line in the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2013.

(2)   The fair values of interest rate derivatives are the amount the company would receive or pay to terminate the contracts, considering quoted market prices of comparable agreements. (Also see Note 8)

(3)   At June 30, 2013, a trade name originally determined to have an indefinite life was deemed to be impaired and an expense was recorded on a separate line in the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2013. (Also see Note 5)