Fair Value Measurement

12 Months Ended

Dec. 31, 2017

Fair Value Measurement [Abstract]

Fair Value Measurement

6.     Fair Value Measurement

Assets and liabilities measured at fair value on a recurring basis consist of the following as of December 31, 2017 (in thousands):

			Fair Value Measurements at Reporting Date Using
			Quoted Prices in		Significant
			Active Markets		Other		Significant
			for Identical		Observable		Unobservable
	December 31,		Assets/Liabilities		Inputs		Inputs
	2017		(Level 1)		(Level 2)		(Level 3)
Assets:
Money market funds	$	113	$	113	$	—	$	—
Liabilities:
Deferred payments	$	4,514	$	—	$	—	$	4,514

Assets and liabilities measured at fair value on a recurring basis consist of the following as of December 31, 2016 (in thousands):

			Fair Value Measurements at Reporting Date Using
			Quoted Prices in		Significant
			Active Markets		Other		Significant
			for Identical		Observable		Unobservable
	December 31,		Assets/Liabilities		Inputs		Inputs
	2016		(Level 1)		(Level 2)		(Level 3)
Assets:
Money market funds	$	5,103	$	5,103	$	—	$	—
Liabilities:
Deferred payments	$	11,741	$	—	$	—	$	11,741

The Company measures the above items on a recurring basis at fair value as follows:

· Money market funds — Classified in Level 1 is excess cash the Company holds in both taxable and tax-exempt money market funds and are included in cash and cash equivalents in the accompanying consolidated balance sheets. The Company records any net unrealized gains and losses for changes in fair value as a component of accumulated other comprehensive income in stockholders’ equity. The Company’s cash and cash equivalents held at December 31, 2016 and 2017, approximate fair value and are not disclosed in the above tables because of the short-term nature of the financial instruments.

· Deferred payments — The Company acquired certain assets and entered into deferred payment arrangements with the sellers in transactions that occurred in 2011 and 2016. The deferred payments are classified within Level 3 as there is no liquid market for similarly priced instruments, and are valued using models that encompass significant unobservable inputs to estimate the operating results of the acquired assets. The assumptions used to prepare the discounted cash flows include estimates for interest rates, enrollment growth, retention rates, obtaining regulatory approvals for expansion into new markets, and pricing strategies. These assumptions are subject to change as the underlying data sources evolve and the programs mature. The short-term portion of deferred payments was $1.3 million as of December 31, 2017 and is included in accounts payable and accrued expense.

The Company did not change its valuation techniques associated with recurring fair value measurements from prior periods and did not transfer assets or liabilities between levels of the fair value hierarchy during the years ended December 31, 2016 or 2017.

Changes in the fair value of the Company’s Level 3 liabilities during the years ended December 31, 2016 and 2017 are as follows (in thousands):

	2016		2017
Balance as of the beginning of period	$	3,278	$	11,741
Amounts paid		(7,358)		(1,133)
Contingent consideration in connection with NYCDA acquisition		14,500		—
Other adjustments to fair value		1,321		(6,094)
Balance at end of period	$	11,741	$	4,514