FAIR VALUE MEASUREMENTS

3 Months Ended

Mar. 31, 2016

As required by the guidance for fair value measurements, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Thus, assets and liabilities categorized as Level 3 may be measured at fair value using inputs that are observable (Levels 1 and 2) and unobservable (Level 3). Significant unobservable inputs used in the fair value measurement of contingent consideration related to business acquisitions are forecasts of expected future operating results of those businesses as developed by the Company’s management and the probability of achievement of those operating forecasts. Management’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of assets and liabilities and their placement within the fair value hierarchy levels.

The following tables show the fair values of the Company’s financial assets and liabilities measured at fair value as of March 31, 2016 and December 31, 2015:



	As of March 2016
	Balance		Level 1		Level 2		Level 3
Cash and cash equivalents	$	244,877	$	244,877	$	—	$	—
Time deposits and restricted cash	238		—		238		—
Employee loans	5,885		—		—		5,885
Total assets measured at fair value	$	251,000	$	244,877	$	238	$	5,885

Performance-based equity awards	$	6,849	$	—	$	—	$	6,849
Cash-settled restricted stock units	75		75		—		—
Total liabilities measured at fair value	$	6,924	$	75	$	—	$	6,849



	As of December 2015
	Balance		Level 1		Level 2		Level 3
Cash and cash equivalents	$	199,449	$	199,449	$	—	$	—
Time deposits and restricted cash	30,419		—		30,419		—
Employee loans	6,338		—		—		6,338
Total assets measured at fair value	$	236,206	$	199,449	$	30,419	$	6,338

Performance-based equity awards	$	5,364	$	—	$	—	$	5,364
Total liabilities measured at fair value	$	5,364	$	—	$	—	$	5,364

As of March 31, 2016 and December 31, 2015, the only financial liabilities related to acquisitions of businesses included performance-based equity awards.

Sensitivity to Changes in Significant Unobservable Inputs

A reconciliation of the beginning and ending balances of acquisition-related contractual contingent liabilities using significant unobservable inputs (Level 3) for the three months ended March 31, 2016, is as follows:



	Amount
Contractual contingent liabilities at January 1, 2016	$	5,364
Liability-classified stock-based awards	1,287
Changes in fair value of contractual contingent liabilities included in earnings	198
Contractual contingent liabilities at March 31, 2016	$	6,849

There were no transfers in or out of Level 3 from other levels in the fair value hierarchy during the three months ended March 31, 2016 and 2015. Changes in the values of these financial liabilities, if any, are typically included in selling, general and administrative expenses on the Company's unaudited condensed consolidated statements of income and comprehensive income.

- 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.

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