FAIR VALUE MEASUREMENTS

The Company had no material financial liabilities measured at fair value on a recurring basis as of December 31, 2017. The following table shows the fair values of the Company’s financial liabilities measured at fair value on a recurring basis as of December 31, 2016:



	As of December 31, 2016
	Balance		Level 1		Level 2		Level 3
Performance-based equity awards	$	3,789	$	3,789	$	—	$	—
Total financial liabilities measured at fair value on a recurring basis	$	3,789	$	3,789	$	—	$	—

Performance-based equity awards carried at fair value on a recurring basis represent contractual liabilities related to certain business combination transactions completed in 2014. All of these awards have vested as of December 31, 2017 and the related liabilities have been settled. Changes in the fair values of these awards were recorded within selling, general and administrative expenses on the Company’s consolidated statements of income and comprehensive income.

A reconciliation of the beginning and ending balances of acquisition-related contractual contingent liabilities using significant unobservable inputs (Level 3) for the years ended December 31, 2016 and 2015, is as follows:



	Amount
Contractual contingent liabilities at January 1, 2015	$	40,623
Liability-classified stock-based awards	5,148
Changes in fair value of contractual contingent liabilities included in earnings	4,355
Effect of net foreign currency exchange rate changes	246
Settlements of contractual contingent liabilities	(45,008		)
Contractual contingent liabilities at December 31, 2015	5,364
Acquisition date fair value of contractual contingent liabilities — other acquisitions	800
Liability-classified stock-based awards	5,148
Changes in fair value of contractual contingent liabilities included in earnings	1,232
Changes in fair value of contractual contingent liabilities recorded against goodwill	200
Settlements of contractual contingent liabilities	(8,955		)
Reclassification of contractual contingent liabilities out of Level 3	(3,789		)
Contractual contingent liabilities at December 31, 2016	$	—

There was no activity in contractual contingent liabilities during the year ended December 31, 2017.

Estimates of fair value of financial instruments not carried at fair value on a recurring basis on the Company’s consolidated balance sheets are generally subjective in nature, and are determined as of a specific point in time based on the characteristics of the financial instruments and relevant market information. The Company uses the following methods to estimate the fair values of its financial instruments:


•	for financial instruments that have quoted market prices, those quoted prices are used to estimate fair value;


•	for financial instruments for which no quoted market prices are available, fair value is estimated using information obtained from independent third parties, or by discounting the expected cash flows using an estimated current market interest rate for the financial instrument;


•	for financial instruments for which no quoted market prices are available and that have no defined maturity, have a remaining maturity of 360 days or less, or reprice frequently to a market rate, the Company assumes that the fair value of these instruments approximates their reported value, after taking into consideration any applicable credit risk.

The generally short duration of certain of the Company’s assets and liabilities results in a significant number of assets and liabilities for which fair value equals or closely approximates the amount recorded on the Company’s consolidated balance sheets. The Company’s financial assets and liabilities that are not carried at fair value on a recurring basis on the Company’s consolidated balance sheets are as follows:


•	cash and cash equivalents;


•	restricted cash and time deposits;


•	employee loans and notes receivable;


•	long-term debt (Note 12 “Long-Term Debt”)

The fair value of employee housing loans is estimated using information on the rates of return that market participants in Belarus would require when investing in unsecured U.S. dollar-denominated government bonds with similar maturities (a “risk-free rate”), after taking into consideration any applicable credit and liquidity risk.

The following tables present the reported amounts and estimated fair values of the financial assets and liabilities for which disclosure of fair value is required, as they would be categorized within the fair value hierarchy, as of the dates indicated:



					Fair Value Hierarchy
	Balance		Estimated Fair Value		Level 1		Level 2		Level 3
December 31, 2017
Financial Assets:
Cash and cash equivalents	$	582,585	$	582,585	$	582,585	$	—	$	—
Time deposits and restricted cash	$	673	$	673	$	—	$	673	$	—
Employee loans	$	4,210	$	4,210	$	—	$	—	$	4,210
Financial Liabilities:
Borrowings under 2017 Credit Facility	$	25,009	$	25,009	$	—	$	25,009	$	—



					Fair Value Hierarchy
	Balance		Estimated Fair Value		Level 1		Level 2		Level 3
December 31, 2016
Financial Assets:
Cash and cash equivalents	$	362,025	$	362,025	$	362,025	$	—	$	—
Time deposits and restricted cash	$	3,042	$	3,042	$	—	$	3,042	$	—
Employee loans	$	5,978	$	5,978	$	—	$	—	$	5,978
Financial Liabilities:
Borrowings under 2014 Credit Facility	$	25,019	$	25,019	$	—	$	25,019	$	—