Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2016

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Note 8 — Fair Value of Financial Instruments

Assets and liabilities are classified in their entirety based on their lowest level of input that is significant to the fair value measurement. There were no Level 1 or Level 2 assets or liabilities measured in the fair value hierarchy during the years ended December 31, 2016 and 2015. There were also no Level 3 assets measured at fair value during the years ended December 31, 2016 and 2015.

The following table sets forth the measurement at fair value on a recurring basis of the contingent cash consideration due the selling unitholders of Cogent related to the Earnout. The liability arose as a result of the Acquisition and is categorized as a Level 3 liability. See "Note 3 — Acquisition".

Liabilities Measured at Fair Value on a Recurring Basis as of December 31, 2016

	Quoted Prices in Active  Markets for Identical Assets (Level 1)		Significant Other Observable  Inputs (Level 2)		Significant Unobservable  Inputs (Level 3)		Balance as of December 31, 2016
	(in thousands)
Liabilities
Contingent obligation due selling unitholders of Cogent	$	—	$	—	$	15,095	$	15,095
Total	$	—	$	—	$	15,095	$	15,095

Liabilities Measured at Fair Value on a Recurring Basis as of December 31, 2015

	Quoted Prices in Active  Markets for Identical Assets (Level 1)		Significant Other Observable  Inputs (Level 2)		Significant Unobservable  Inputs (Level 3)		Balance as of December 31, 2015
	(in thousands)
Liabilities
Contingent obligation due selling unitholders of Cogent	$	—	$	—	$	13,647	$	13,647
Total	$	—	$	—	$	13,647	$	13,647

Changes in Level 3 liabilities measured at fair value on a recurring basis for the year ended December 31, 2016 are as follows:

	Opening Balance as of January 1, 2016		Total realized and unrealized gains (losses) included in Net Income			Unrealized gains (losses) included in Other Comprehensive Income		Purchases		Issues		Sales		Settlements		Closing Balance as of December 31, 2016		Unrealized gains (losses) for Level 3 liabilities outstanding at December 31, 2016
	(in thousands)
Liabilities
Contingent obligation due selling unitholders of Cogent	$	13,647	$	(1,448	)	$	—	$	—	$	—	$	—	$	—	$	15,095	$	(1,448	)
Total	$	13,647	$	(1,448	)	$	—	$	—	$	—	$	—	$	—	$	15,095	$	(1,448	)

Changes in Level 3 liabilities measured at fair value on a recurring basis for the year ended December 31, 2015 are as follows:

	Opening Balance as of January 1, 2015		Total realized and unrealized gains (losses) included in Net Income			Unrealized gains (losses) included in Other Comprehensive Income		Purchases		Issues		Sales		Settlements		Closing Balance as of December 31, 2015		Unrealized gains (losses) for Level 3 liabilities outstanding at December 31, 2015
	(in thousands)
Liabilities
Contingent obligation due selling unitholders of Cogent	$	—	$	(503	)	$	—	$	—	$	13,144	$	—	$	—	$	13,647	$	(503	)
Total	$	—	$	(503	)	$	—	$	—	$	13,144	$	—	$	—	$	13,647	$	(503	)

Realized and unrealized gains (losses) are reported as a component of other operating expenses in the consolidated statements of income.

The following tables presents quantitative information about the significant unobservable inputs utilized by the Company in the fair value measure of Level 3 liabilities measured at fair value on a recurring basis, as of December 31, 2016:

	Fair Value as of December 31, 2016		Valuation Technique(s)	Unobservable  Input(s)		Range (Weighted Average)
	(in thousands)
Liabilities
Contingent obligation due selling unitholders of Cogent	$	15,095	Present value of expected payments	Discount rate		13	%
				Forecast revenue	(a)

The following tables presents quantitative information about the significant unobservable inputs utilized by the Company in the fair value measure of Level 3 liabilities measured at fair value on a recurring basis, as of December 31, 2015:

	Fair Value as of December 31, 2015		Valuation Technique(s)	Unobservable  Input(s)		Range (Weighted Average)
	(in thousands)
Liabilities
Contingent obligation due selling unitholders of Cogent	$	13,647	Present value of expected payments	Discount rate		12	%
				Forecast revenue	(a)

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(a) The Company's estimate of contingent consideration as of December 31, 2016 and December 31, 2015 was principally based on the acquired business' (i) actual revenue generation from April 1, 2015 through each respective year end and projected revenue generation for the remaining period through March 31, 2017 and (ii) projected revenue generation from April 1, 2017 through March 31, 2019.

Valuation Processes - Level 3 Measurements - The Company utilizes a valuation technique based on a present value method applied to the probability of achieving a range of potential revenue outcomes. The valuation was conducted by the Company. The Company updates unobservable inputs each reporting period and has a formal process in place to review changes in fair value.

Sensitivity Analysis - Level 3 Measurements - The significant unobservable inputs used in determining fair value are the discount rate and forecast revenue information. Significant increases (decreases) in the discount rate would have resulted in a lower (higher) fair value measurement. Significant increases (decreases) in the forecast revenue information would result in a higher (lower) fair value measurement. For all significant unobservable inputs used in the fair value measurement of the Level 3 liabilities, a change in one of the inputs would not necessarily result in a directionally similar change in the other.