Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2014

Note 7 – Fair Value of Financial Instruments

Assets and Liabilities Measured at Fair Value on a Recurring Basis

As of December 31, 2014 and 2013, financial instruments required to be measured at fair value on a recurring basis consisted primarily of acquisition-related contingent consideration liabilities, which represent the estimated fair value of additional future earn-outs payable for acquisitions of businesses that closed after January 1, 2009 (“ASC 805 contingent consideration”), in accordance with U.S. GAAP. The fair value of ASC 805 contingent consideration is based on management estimates and entity-specific assumptions, which are Level 3 inputs, and is evaluated on an ongoing basis. As of December 31, 2014 and 2013, the fair value of the Company’s ASC 805 contingent consideration totaled $146.1 million and $165.4 million, respectively.

Additions to ASC 805 contingent consideration from new business combinations for the years ended December 31, 2014, 2013 and 2012 totaled $33.6 million, $32.5 million and $66.7 million, respectively. The Company paid approximately $48.4 million, $8.5 million and $3.8 million of ASC 805 contingent consideration for the years December 31, 2014, 2013 and 2012, respectively. Foreign currency translation gains and/or losses associated with ASC 805 contingent consideration are included in other comprehensive income. For the years ended December 31, 2014, 2013 and 2012, foreign currency translation gains associated with ASC 805 contingent consideration totaled $4.5 million, $2.2 million and $0.1 million, respectively.

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

Assets and liabilities recognized or disclosed at fair value on a non-recurring basis, for which remeasurement occurs in the event of an impairment or other measurement event, if applicable, include items such as cost and equity method investments, life insurance assets, long-lived assets, goodwill, other intangible assets and liabilities, including off-market contracts and debt. Carrying amounts and estimated fair values of selected financial instruments measured on a non-recurring basis as of the dates indicated were as follows (in millions):



	December 31, 2014				December 31, 2013
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
4.875% Senior Notes	$	400.0	$	375.0	$	400.0	$	380.0
2009 Convertible Notes	$	—	$	—	$	12.6	$	26.6
2011 Convertible Notes	$	—	$	—	$	198.3	$	428.3

The estimated fair values of the Company’s 4.875% Senior Notes, 2009 Convertible Notes and 2011 Convertible Notes are based on quoted market prices in active markets, a Level 1 input. During the year ended December 31, 2014, the Company’s 2009 and 2011 Convertible Notes matured.

Cost and Equity Method Investments. The aggregate carrying value of the Company’s cost and equity method investment assets, including long-term receivables from investees and contractual joint ventures, totaled approximately $17.7 million and $15.0 million as of December 31, 2014 and 2013, respectively. In addition, as of December 31, 2014, the Company had approximately $32.4 million of other current liabilities relating to an equity method investment. The fair values of the Company’s cost and equity method investments are not readily available. The Company is not aware of events or changes in circumstances that would have a significant adverse effect on the carrying values of its cost and/or equity method investments as of December 31, 2014 or 2013.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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