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Fair Value Measurements of Assets and Liabilities | 6 Months Ended
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Jun. 30, 2017
Fair Value Disclosures [Abstract] |
Fair Value Measurements of Assets and Liabilities | Fair Value Measurements of Assets and Liabilities In accordance with accounting principles generally accepted in the United States, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three level hierarchy prioritizes the inputs used to measure fair value as follows:
• | Level 1 - Observable inputs - quoted prices in active markets for identical assets and liabilities;
• | Level 2 - Observable inputs other than the quoted prices in active markets for identical assets and liabilities includes quoted prices for similar instruments, quoted prices for identical or similar instruments in inactive markets, and amounts derived from valuation models where all significant inputs are observable in active markets; and
• | Level 3 - Unobservable inputs - includes amounts derived from valuation models where one or more significant inputs are unobservable and require the Company to develop relevant assumptions.
The following is a summary of assets, liabilities and redeemable noncontrolling interests and their related classifications under the fair value hierarchy:
| June 30, 2017
| Total |  | (Level 1) |  | (Level 2) |  | (Level 3)
Assets |  |  |  |  |  |  |
Cash, cash equivalents and restricted cash (1) | $ | 223,138 |  |  | $ | 223,138 |  |  | $ | — |  |  | $ | — |
Marketable securities-short term (2) | 7,165 |  |  | — |  |  | 7,165 |  |  | — |
Marketable securities-long term (2) | 1,193 |  |  | — |  |  | 1,193 |  |  | — |
Total assets | $ | 231,496 |  |  | $ | 223,138 |  |  | $ | 8,358 |  |  | $ | — |
Liabilities |  |  |  |  |  |  |
Contingent interest derivative (3) | $ | 288 |  |  | $ | — |  |  | $ | — |  |  | $ | 288 |
Contingent consideration obligation | 2,831 |  |  | — |  |  | — |  |  | 2,831 |
Total liabilities | $ | 3,119 |  |  | $ | — |  |  | $ | — |  |  | $ | 3,119 |
Temporary Equity |  |  |  |  |  |  |
Redeemable noncontrolling interests (4) | $ | 25,280 |  |  | $ | — |  |  | $ | — |  |  | $ | 25,280 |
Total temporary equity | $ | 25,280 |  |  | $ | — |  |  | $ | — |  |  | $ | 25,280 |
| December 31, 2016 (Restated)
| Total |  | (Level 1) |  | (Level 2) |  | (Level 3)
Assets |  |  |  |  |  |  |
Cash, cash equivalents and restricted cash (1) | $ | 211,433 |  |  | $ | 211,433 |  |  | $ | — |  |  | $ | — |
Marketable securities-short term (2) | 12,506 |  |  | — |  |  | 12,506 |  |  | — |
Marketable securities-long term (2) | 2,974 |  |  | — |  |  | 2,974 |  |  | — |
Total assets | $ | 226,913 |  |  | $ | 211,433 |  |  | $ | 15,480 |  |  | $ | — |
Liabilities |  |  |  |  |  |  |
Contingent consideration obligation | $ | 2,833 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,833 |
Total liabilities | $ | 2,833 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,833 |
Temporary Equity |  |  |  |  |  |  |
Redeemable noncontrolling interests (4) | $ | 25,280 |  |  | $ | — |  |  | $ | — |  |  | $ | 25,280 |
Total temporary equity | $ | 25,280 |  |  | $ | — |  |  | $ | — |  |  | $ | 25,280 |
(1) | Cash equivalents primarily included money market funds.
(2) | Marketable securities is comprised of municipal bonds and certificates of deposit.
(3) | Contingent interest derivative related to convertible debt is included in accrued expenses, for further details see Note 7 - Debt.
(4) | Put arrangements held by the noncontrolling interests in certain of the Company’s joint ventures. During the six months ended June 30, 2017, the carrying amount of the redeemable noncontrolling interests was greater than the fair value and accordingly no adjustment to the carrying value was recorded.
Available-for-Sale Securities The Company utilizes the market approach to measure fair value for its financial assets. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets. The Company’s marketable securities investments classified as Level 2 primarily utilize broker quotes in a non-active market for valuation of these securities. No transfers between Level 1, Level 2 and Level 3 of the fair value measurement hierarchy occurred during the six months ended June 30, 2017. Unrealized gains and losses are reported as a component of accumulated other comprehensive income (loss) in stockholders’ equity. There were no sales of marketable securities during the six months ended June 30, 2017 and 2016. The cost of securities sold is based on the specific identification method. The Company evaluates investments with unrealized losses to determine if the losses are other than temporary. The Company has determined that the gross unrealized losses at June 30, 2017 and 2016 are temporary. In making this determination, the Company considered the financial condition, credit ratings and near-term prospects of the issuers, the underlying collateral of the investments, and the magnitude of the losses as compared to the cost and the length of time the investments have been in an unrealized loss position. Additionally, while the Company classifies the securities as available for sale, the Company does not currently intend to sell such investments and it is more likely than not to recover the carrying value prior to being required to sell such investments. At June 30, 2017 and December 31, 2016, the estimated fair value of investments classified as available-for-sale, were as follows:
| June 30, 2017
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
Marketable securities: |  |  |  |  |  |  |
Certificates of deposit | 450 |  |  | — |  |  | — |  |  | 450 |
Municipal bonds | 7,914 |  |  | 1 |  |  | (7 | ) |  | 7,908 |
Total marketable securities | $ | 8,364 |  |  | $ | 1 |  |  | $ | (7 | ) |  | $ | 8,358 |
As of June 30, 2017, an insignificant amount of accumulated unrealized losses related to investments that have been in a continuous unrealized loss position for 12 months or longer. The aggregate related fair value of investment with unrealized losses was approximately $6.8 million.
| December 31, 2016 (Restated)
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
Marketable securities: |  |  |  |  |  |  |
Certificates of deposit | 450 |  |  | — |  |  | — |  |  | 450 |
Municipal bonds | 15,063 |  |  | 1 |  |  | (34 | ) |  | 15,030 |
Total marketable securities | $ | 15,513 |  |  | $ | 1 |  |  | $ | (34 | ) |  | $ | 15,480 |
As of December 31, 2016, an insignificant amount of accumulated unrealized losses related to investments that have been in a continuous unrealized loss position for 12 months or longer. The aggregate related fair value of investment with unrealized losses was approximately $13.8 million. Contractual maturities of marketable debt securities are as follows:
| June 30, 2017
| Amortized Cost |  | Fair Value
Due within one year | $ | 7,169 |  |  | $ | 7,165 |
Due after 1 year through 5 years | 1,195 |  |  | 1,193 |
Total available-for-sale securities | $ | 8,364 |  |  | $ | 8,358 |
Contingent Consideration The Company determined the fair value of the contingent consideration related to the acquisition of Razorsight Corporation (“Razorsight”) using a real options approach which uses a risk-adjusted expected growth rate based on assessments of expected growth in revenue, adjusted by an appropriate factor. The fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement. The significant unobservable inputs used in the fair value measurement of the Company’s contingent consideration obligation are the probabilities of achieving certain financial targets and contractual milestones and a risk-adjusted rate of 2.19%. Significant changes in any of those probabilities in isolation may result in a higher (lower) fair value measurement. No changes in valuation techniques occurred during the six months ended June 30, 2017. The changes in fair value of the Company’s Level 3 contingent consideration obligation during the six months ended June 30, 2017 were as follows:
Balance at December 31, 2016 (Restated) | $ | 2,833 |
Fair value adjustment to contingent consideration obligation included in net income | (2 | )
Balance at June 30, 2017 | $ | 2,831 |
Redeemable Noncontrolling Interests The redeemable noncontrolling interests recorded at fair value are put arrangements held by the noncontrolling interests in certain of the Company’s joint ventures. The Company recognizes changes in the redemption value immediately as they occur and adjusts the carrying value of the noncontrolling interest to the greater of the estimated redemption value, which approximates fair value, at the end of each reporting period or the initial carrying amount. The fair value of the redeemable noncontrolling interests was estimated by applying an income approach using a discounted cash flow analysis. This fair value measurement is based on significant inputs that are not observable in the market and thus represents a Level 3 measurement. Significant changes in the underlying assumptions used to value the redeemable noncontrolling interests could significantly increase or decrease the fair value estimates recorded in the Condensed Consolidated Balance Sheets. The changes in redeemable noncontrolling interests classified as Level 3 measurements were as follows:
Balance at December 31, 2016 (Restated) | $ | 25,280 |
Fair value adjustment | 5,704 |
Net loss attributable to interests in subsidiaries | (5,704 | )
Balance at June 30, 2017 | $ | 25,280 |

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- 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 820 -URI http://asc.fasb.org/topic&trid=2155941 + Details
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