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Fair Value Measurements (Tables)
9 Months Ended
Sep. 30, 2013
Fair Value Disclosures [Abstract]  
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis
Our financial assets (liabilities) carried at fair value measured on a recurring basis as of September 30, 2013 and December 31, 2012, 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
Description
 
September 30, 2013
 
(Level 1)
 
(Level 2)
 
(Level 3)
 
 
 
 
 
 
 
 
 
Interest rate swap (1)
 
$
745

 
$

 
$
745

 
$

 
 
 
 
 
 
 
 
 
 
 
 
 
Fair Value Measurements Using
 
 
Total Fair
 
Quoted prices in
 
Significant other
 
Significant
 
 
Value at
 
active markets
 
observable inputs
 
Unobservable inputs
Description
 
December 31, 2012
 
(Level 1)
 
(Level 2)
 
(Level 3)
 
 
 
 
 
 
 
 
 
Interest rate swap (1)
 
$
(1,788
)
 
$

 
$
(1,788
)
 
$

 
 
 
 
 
 
 
 
 


(1)    The fair value of the interest rate swap is determined based on forward yield curves.
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation
Changes in the fair value of our contingent liability during the three and nine-month periods ended September 30, 2013, were as follows (in thousands):

 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2013
 
2013
Beginning balance
$
6,692

 
$
6,697

Fair value adjustments recorded to income during the period
(4,108
)
 
(4,075
)
Contingent payments made
(22
)
 
(60
)
Ending balance
$
2,562

 
$
2,562

Fair Value Inputs, Liabilities, Quantitative Information
The recurring Level 3 measurement of our contingent consideration liability includes the following significant unobservable inputs (amount in thousands):
Contingent consideration liability
 
Fair value at September 30, 2013
 
Valuation technique
 
Unobservable inputs
 
Range
Revenue-based payments
 
$
2,266

 
Discounted Cash Flow

 
Discount rate
 
11.0% - 15.0%
 
 


 
 
Probability of milestone payment
 
90%
 
 
 
 
 
 
Projected year of payments
 
2013-2028
 
 
 
 
 
 
 
 
 
Other payments
 
296

 
Discounted cash flow

 
Discount rate
 
5.4%
 
 
 
 
 
Probability of milestone payment
 
100%
 
 
 
 
 
 
Projected year of payments
 
2013-2015