Fair Value Disclosures

3 Months Ended

Mar. 31, 2012

Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract]

Fair Value Disclosures

Fair Value Disclosures

The following table shows our liabilities accounted for at fair value on a recurring basis:

			Fair Value Measurements at Reporting Date Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Description	March 31, 2012		(Level 1)		(Level 2)		(Level 3)
Liabilities:
Foreign currency forward (Euro)	$	1,128	$	—	$	1,128	$	—
Interest rate swap agreements	330		—		330		—
Contingent consideration payable	12,081		$	—	—		12,081
Total	$	13,539	$	—	$	1,458	$	12,081

We use significant other observable inputs to value derivative instruments used to hedge foreign currency and interest rate risk; therefore, they are classified within Level 2 of the valuation hierarchy. The fair value for these contracts is determined based on exchange rates and interest rates, respectively.  Our valuation techniques and Level 3 inputs used to estimate the fair value of contingent consideration payable in connection with our acquisition of Rahu are described below. There were no transfers into or out of Levels 1, 2 or 3 in 2012.

The following table summarizes changes in Level 3 liabilities measured at fair value on a recurring basis:

	Contingent consideration
Fair Value at December 31, 2011	$	14,104
Change in estimate	(2,737		)
Accretion expense	324
Foreign exchange	390
Fair Value at March 31, 2012	$	12,081

We acquired Rahu on December 22, 2011. The purchase price included contingent consideration of up to an additional €20.0 million ($26.7 million at March 31, 2012) based on achieving certain volume targets over a fifteen year period ending on December 31, 2026. We estimated the fair value of the contingent consideration liability using probability-weighted expected future cash flows and applied a discount rate that appropriately captures a market participant’s view of the risk associated with the liability. This fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement within the fair value hierarchy.

During the first quarter of 2012, the estimate of the contingent consideration liability decreased by $2.7 million as we revised the purchase price allocation reflecting information known as of the acquisition date. This adjustment, and any other adjustments arising out of the finalization of the purchase price allocation, will not impact cash flows. The final allocation is expected to be completed no later than 12 months after the acquisition date. The liability for contingent consideration is included in Other non-current liabilities in the Unaudited Condensed Consolidated Balance Sheet and may differ from the amount that is ultimately payable based on achieving volume targets (discussed above). See Note 4 - Acquisitions for further discussion regarding the Rahu acquisition.

We also hold financial instruments consisting of cash, accounts receivable, and accounts payable. The carrying amounts of cash, accounts receivable and accounts payable approximate fair value due to the short-term maturities of these instruments. Long-term debt and the current portion of long-term debt had a carrying value of $678.3 million and a fair value of $681.9 million at March 31, 2012, respectively, based on quoted market prices which are Level 1 inputs. Derivative instruments are recorded at fair value as indicated above.