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Fair Value Measures and Disclosures (Tables) | 6 Months Ended
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Jun. 30, 2022
Fair Value Disclosures [Abstract] |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following tables provide a reconciliation of the Level 3 earn-out liabilities measured at estimated fair value (in thousands):
|  | Earn-out Liability
Accrued balance, January 1, 2022 |  | $ | 2,589 |
Acquisition date fair value estimate of earn-out(1) |  | 55,158 |
Currency translation |  | (46) |
Accrued balance, March 31, 2022 |  | $ | 57,701 |
Change in fair value of earn-out (included in income from operations as a separate line item)(2) |  | (27,194) |
Currency translation |  | (98) |
Accrued balance, June 30, 2022 |  | $ | 30,409 |
_______________________________ (1) $53.5 million relates to our acquisition of Smiths Medical and $1.6 million relates to our acquisition of a small foreign infusions systems supplier in the fourth quarter of 2021 (see Note 3: Acquisitions). (2) Primarily relates to the change in fair value of the Smiths Medical earn-out.
|  | Earn-out Liability
Accrued balance, January 1, 2021 |  | $ | 26,300 |
Change in fair value of earn-out (included in income from operations as a separate line item) |  | — |
Accrued balance, March 31, 2021 |  | $ | 26,300 |
Change in fair value of earn-out (included in income from operations as a separate line item) |  | — |
Accrued balance, June 30, 2021 |  | $ | 26,300 |
Fair Value Measurement Inputs and Valuation Techniques | The following tables provide quantitative information about Level 3 inputs for fair value measurement of our earn-out liabilities related to Smiths Medical and Pursuit: Smiths Medical Earn-out
Simulation Input |  | As of June 30, 2022 |  | At Acquisition January 6, 2022
Volatility |  | 40.00 | % |  | 37.00 | %
Risk-Free Rate |  | 2.97 | % |  | 1.31 | %
Pursuit Earn-out
Simulation Input |  | As of June 30, 2021
Revenue/Gross Profit Volatility |  | 25.00 | %
Discount Rate |  | 12.50 | %
Risk-Free Rate |  | 0.09 | %
Counter Party Risk |  | 3.10 | %
Fair Value, by Balance Sheet Grouping | Our assets and liabilities measured at fair value on a recurring basis consisted of the following Level 1, 2 and 3 inputs as defined above (in thousands):
| Fair value measurements as of June 30, 2022
| Total carrying value |  | Quoted prices in active markets for identical assets (level 1) |  | Significant other observable inputs (level 2) |  | Significant unobservable inputs (level 3)
Assets: |  |  |  |  |  |  |
Available-for-sale debt securities: |  |  |  |  |  |  |
Short-term corporate bonds | $ | 11,787 |  |  | $ | — |  |  | $ | 11,787 |  |  | $ | — |
Short-term U.S. treasury securities | 1,404 |  |  | 1,404 |  |  | — |  |  | — |
Long-term corporate bonds | 1,837 |  |  | — |  |  | 1,837 |  |  | — |
Foreign exchange contracts: |  |  |  |  |  |  |
Prepaid expenses and other current assets | 9,463 |  |  | — |  |  | 9,463 |  |  | — |
Other assets | 112 |  |  | — |  |  | 112 |  |  | — |
Interest rate contracts: |  |  |  |  |  |  |
Prepaid expenses and other current assets | 15,407 |  |  | — |  |  | 15,407 |  |  | — |
Other assets | 23,834 |  |  | — |  |  | 23,834 |  |  | — |
Total Assets | $ | 63,844 |  |  | $ | 1,404 |  |  | $ | 62,440 |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |
Contingent earn-out liability - ST | $ | 290 |  |  | $ | — |  |  | $ | — |  |  | $ | 290 |
Contingent earn-out liability - LT | 30,119 |  |  | — |  |  | — |  |  | 30,119 |
Foreign exchange contracts: |  |  |  |  |  |  |
Accrued liabilities | 577 |  |  | — |  |  | 577 |  |  | — |
Other long-term liabilities | 50 |  |  | — |  |  | 50 |  |  | — |
Total Liabilities | $ | 31,036 |  |  | $ | — |  |  | $ | 627 |  |  | $ | 30,409 |
| Fair value measurements as of December 31, 2021
| Total carrying value |  | Quoted prices in active markets for identical assets (level 1) |  | Significant other observable inputs (level 2) |  | Significant unobservable inputs (level 3)
Assets: |  |  |  |  |  |  |
Available-for-sale debt securities: |  |  |  |  |  |  |
Short-term corporate bonds | $ | 14,420 |  |  | $ | — |  |  | $ | 14,420 |  |  | $ | — |
Long-term corporate bonds | 4,620 |  |  | — |  |  | 4,620 |  |  | — |
Cross-currency par forward contract: |  |  |  |  |  |  |
Prepaid expenses and other current assets | 1,061 |  |  | — |  |  | 1,061 |  |  | — |
Total Assets | $ | 20,101 |  |  | $ | — |  |  | $ | 20,101 |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |
Contingent earn-out liability - LT | $ | 2,589 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,589 |
Forward-starting interest rate swaps: |  |  |  |  |  |  |
Other long-term liabilities | 1,480 |  |  | — |  |  | 1,480 |  |  | — |
Total Liabilities | $ | 4,069 |  |  | $ | — |  |  | $ | 1,480 |  |  | $ | 2,589 |

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- Definition Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=123874694&loc=d3e19207-110258 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=123874694&loc=d3e19279-110258 + Details
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