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Fair Value Measurements
 6 Months Ended
Jun. 30, 2018
Fair Value Disclosures [Abstract]  
Fair Value Measurements
Note 8. Fair Value Measurements
We review the fair value hierarchy classification on a quarterly basis. Changes in the ability to observe valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. There were no transfers between Level 1, Level 2, or Level 3 during the six months ended June 30, 2018.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following table provides information by level for assets and liabilities that are measured at fair value on a recurring basis (in thousands):
 
 
Fair Value as of June 30, 2018
 
Fair Value Measurements Using Inputs Considered as:
 
 
 
Level 1
 
Level 2
 
Level 3
Liabilities:
 
 
 
 
 
 
 
 
Derivative liabilities - designated as cash flow hedges (foreign currency exchange rate "FX")
 
$
1,209

 
$
—

 
$
1,209

 
$
—

Derivative liabilities - designated as cash flow hedges (interest rate swaps)
 
1,221

 
—

 
1,221

 
—

Derivative liabilities - freestanding instruments (FX)
 
827

 
—

 
827

 
—

Contingent consideration (1)
 
181,133

 
—

 
—

 
181,133

 
 
$
184,390

 
$
—

 
$
3,257

 
$
181,133

 
 
Fair Value as of December 31, 2017
 
Fair Value Measurements Using Inputs Considered as:
 
 
 
Level 1
 
Level 2
 
Level 3
Assets:
 
 
 
 
 
 
 
 
Derivative assets - freestanding instruments (FX)
 
$
519

 
$
—

 
$
519

 
$
—

 
 
$
519

 
$
—

 
$
519

 
$
—

 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
Derivative liabilities - designated as cash flow hedges (FX)
 
$
460

 
$
—

 
$
460

 
$
—

Derivative liabilities - designated as cash flow hedges (interest rate swaps)
 
1,585

 
—

 
1,585

 
—

Contingent consideration (1)
 
33,973

 
—

 
—

 
33,973

 
 
$
36,018

 
$
—

 
$
2,045

 
$
33,973


(1)
The contingent consideration liability represents contingent payments related to five completed acquisitions: Cellplex PTY Ltd., Inversiones Drilltex SAS, Caisson, ImThera and TandemLife. See the table below for additional information.
Our recurring fair value measurements, using significant unobservable inputs (Level 3), relate solely to our contingent consideration liability. The following table provides a reconciliation of the beginning and ending balance of the contingent consideration liability (in thousands):
Total contingent consideration liability at December 31, 2017
 
$
33,973

Purchase price - ImThera contingent consideration
 
112,744

Purchase price - TandemLife contingent consideration
 
40,190

Payments
 
(196
)
Changes in fair value (1)
 
(5,546
)
Effect of changes in foreign currency exchange rates
 
(32
)
Total contingent consideration liability at June 30, 2018
 
181,133

Less current portion of contingent consideration liability at June 30, 2018
 
2,684

Long-term portion of contingent consideration liability at June 30, 2018
 
$
178,449

(1)
Includes a decrease of $6.1 million due to the delay in the timing of anticipated regulatory approval for ImThera. See “Note 3. Business Combinations” for additional discussion.