XML 74 R13.htm IDEA: XBRL DOCUMENT
v2.4.1.9

Fair Value Measurements | 3 Months Ended
--- | ---
Mar. 31, 2015
Fair Value Disclosures [Abstract] |
Fair Value Measurements | Financial Assets and Liabilities Measured at Fair Value We use the market and income approaches to value our financial assets and liabilities, and during the three months ended March 31, 2015, there were no significant changes in valuation techniques or inputs related to the financial assets or liabilities that we have historically recorded at fair value. The tiers in the fair value hierarchy include: Level 1, defined as observable inputs such as quoted market prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The following tables present information about our financial assets and liabilities measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation inputs we utilized to determine such fair value as of March 31, 2015 and December 31, 2014 (in thousands):
| Balance as of March 31, 2015 |  | Fair Value Measurements as of March 31, 2015
Level 1 |  | Level 2 |  | Level 3
Assets: |  |  |  |  |  |  |
Cash surrender value of life insurance | $ | 31,077 |  |  | $ | — |  |  | $ | 31,077 |  |  | $ | — |
Total Assets | $ | 31,077 |  |  | $ | — |  |  | $ | 31,077 |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |
Contingent consideration liabilities | $ | 5,561 |  |  | $ | — |  |  | $ | — |  |  | $ | 5,561 |
Deferred compensation liabilities | 30,074 |  |  | — |  |  | 30,074 |  |  | — |
Interest rate swaps | 4,723 |  |  | — |  |  | 4,723 |  |  | — |
Total Liabilities | $ | 40,358 |  |  | $ | — |  |  | $ | 34,797 |  |  | $ | 5,561 |
| Balance as of December 31, 2014 |  | Fair Value Measurements as of December 31, 2014
| Level 1 |  | Level 2 |  | Level 3
Assets: |  |  |  |  |  |  |
Cash surrender value of life insurance | $ | 28,242 |  |  | $ | — |  |  | $ | 28,242 |  |  | $ | — |
Total Assets | $ | 28,242 |  |  | $ | — |  |  | $ | 28,242 |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |
Contingent consideration liabilities | $ | 7,295 |  |  | $ | — |  |  | $ | — |  |  | $ | 7,295 |
Deferred compensation liabilities | 27,580 |  |  | — |  |  | 27,580 |  |  | — |
Interest rate swaps | 5,218 |  |  | — |  |  | 5,218 |  |  | — |
Total Liabilities | $ | 40,093 |  |  | $ | — |  |  | $ | 32,798 |  |  | $ | 7,295 |
The cash surrender value of life insurance and deferred compensation liabilities are included in Other Assets and Other Noncurrent Liabilities, respectively, on our Unaudited Condensed Consolidated Balance Sheets. The current portion of contingent consideration liabilities is included in Other Current Liabilities and the noncurrent portion is included in Other Noncurrent Liabilities on our Unaudited Condensed Consolidated Balance Sheets based on the expected timing of the related payments. The balance sheet classification of the interest rate swaps is presented in Note 5, "Derivative Instruments and Hedging Activities." Our Level 2 assets and liabilities are valued using inputs from third parties and market observable data. We obtain valuation data for the cash surrender value of life insurance and deferred compensation liabilities from third party sources, which determine the net asset values for our accounts using quoted market prices, investment allocations and reportable trades. We value our derivative instruments using a third party valuation model that performs a discounted cash flow analysis based on the terms of the contracts and market observable inputs such as current and forward interest rates. Our contingent consideration liabilities are related to our business acquisitions as further described in Note 8, "Business Combinations." Under the terms of the contingent consideration agreements, payments may be made at specified future dates depending on the performance of the acquired business subsequent to the acquisition. The liabilities for these payments are classified as Level 3 liabilities because the related fair value measurement, which is determined using an income approach, includes significant inputs not observable in the market. These unobservable inputs include internally-developed assumptions of the probabilities of achieving specified targets, which are used to determine the resulting cash flows and the applicable discount rate. Our Level 3 fair value measurements are established and updated quarterly by our corporate accounting department using current information about these key assumptions, with the input and oversight of our operational and executive management teams. We evaluate the performance of the business during the period compared to our previous expectations, along with any changes to our future projections, and update the estimated cash flows accordingly. In addition, we consider changes to our cost of capital and changes to the probability of achieving the earnout payment targets when updating our discount rate on a quarterly basis. The significant unobservable inputs used in the fair value measurements of our Level 3 contingent consideration liabilities were as follows:
| March 31, |  | December 31,
| 2015 |  | 2014
Unobservable Input | (Weighted Average)
Probability of achieving payout targets | 75.0 | % |  | 79.1 | %
Discount rate | 7.5 | % |  | 7.5 | %
A decrease in the assessed probabilities of achieving the targets or an increase in the discount rate, in isolation, would result in a lower fair value measurement. Changes in the values of the liabilities are recorded in Change in Fair Value of Contingent Consideration Liabilities within Other Expense (Income) on our Unaudited Condensed Consolidated Statements of Income. Changes in the fair value of our contingent consideration obligations are as follows (in thousands):
| Three Months Ended
| March 31,
| 2015 |  | 2014
Beginning Balance | $ | 7,295 |  |  | $ | 55,653 |
Contingent consideration liabilities recorded for business acquisitions | — |  |  | 4,317 |
Payments | (1,667 | ) |  | (2,006 | )
Increase (decrease) in fair value included in earnings | 151 |  |  | (1,222 | )
Exchange rate effects | (218 | ) |  | 349 |
Ending Balance | $ | 5,561 |  |  | $ | 57,091 |
Of the amounts included in earnings for the three months ended March 31, 2015 and 2014, $0.2 million and $0.1 million of losses, respectively, were related to contingent consideration obligations outstanding as of March 31, 2015. The changes in the fair value of contingent consideration obligations included in earnings during the respective periods in 2015 and 2014 reflect the quarterly reassessment of each obligation's fair value, including an analysis of the significant inputs used in the valuation, as well as the accretion of the present value discount. Financial Assets and Liabilities Not Measured at Fair Value Our debt is reflected on the Unaudited Condensed Consolidated Balance Sheets at cost. Based on market conditions as of March 31, 2015 and December 31, 2014, the fair value of our credit agreement borrowings reasonably approximated the carrying value of $974 million and $1.1 billion, respectively. In addition, based on market conditions, the fair value of the outstanding borrowings under the receivables facility reasonably approximated the carrying value of $97 million and $95 million at March 31, 2015 and December 31, 2014, respectively. As of March 31, 2015 and December 31, 2014, the fair value of our senior notes was approximately $593 million and $569 million, respectively, compared to a carrying value of 600 million. The fair value measurements of the borrowings under our credit agreement and receivables facility are classified as Level 2 within the fair value hierarchy since they are determined based upon significant inputs observable in the market, including interest rates on recent financing transactions with similar terms and maturities. We estimated the fair value by calculating the upfront cash payment a market participant would require at March 31, 2015 to assume these obligations. The fair value of our senior notes is classified as Level 1 within the fair value hierarchy since it is determined based upon observable market inputs including quoted market prices in an active market.

X
- Details
Name: | us-gaap_FairValueDisclosuresAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13537-108611 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13433-108611 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 28 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=36462937&loc=d3e19207-110258 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 16 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13504-108611 + Details
Name: | us-gaap_FairValueDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration