9.	Fair Value Measurements

We account for certain assets and liabilities at fair value. Fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date, assuming the transaction occurs in the principal or most advantageous market for that asset or liability.

Fair Value Hierarchy

The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

Level 1: Quoted prices in active markets for identical assets or liabilities;

Level 2:

Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-based valuation techniques in which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

Level 3: Unobservable inputs that are supported by little or no market activity and typically reflect management's estimates of assumptions that market participants would use in pricing the asset or liability.

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

Based on our estimate of fair value prior to the disposition of the TPHS business, we determined in 2015 that the present value of our remaining contractual cash obligations in the Gallup Joint Venture exceeded the estimated fair value, resulting in the recognition of a liability associated with the forward option to acquire additional membership interest (the "Gallup Derivative"). Prior to July 31, 2016 and the sale of the TPHS business, the Gallup Derivative was recorded as a derivative liability in accordance with FASB ASC Topic 815 and was carried at fair value. Upon the sale of the TPHS business, we remain obligated to Sharecare for two-thirds of the remaining payment obligations in respect of the purchase price to be paid in connection with Sharecare's acquisition of additional membership interest in the Gallup Joint Venture as discussed in Note 8 above. These payment obligations are recorded as a liability at December 31, 2016 but not as a derivative; since the Gallup Joint Venture was transferred to Sharecare, the Gallup Derivative was written off to discontinued operations.

Further, we measure certain assets at fair value on a nonrecurring basis in the fourth quarter of the year, including the following:

•	reporting units measured at fair value as part of a goodwill impairment test; and

•	indefinite-lived intangible assets measured at fair value for impairment assessment.

Each of these assets above is classified as Level 3 within the fair value hierarchy.

During the fourth quarter of 2016, we reviewed goodwill for impairment at the reporting unit level (operating segment or one level below an operating segment). Following the sale of the TPHS business effective July 31, 2016, a single reporting unit remains. The fair value of a reporting unit is the price that would be received to sell the unit as a whole in an orderly transaction between market participants at the measurement date. We elected to perform a qualitative assessment to determine whether it was more likely than not that the fair value of the reporting unit was less than its carrying value. Based on our qualitative assessment, we determined that the carrying value of goodwill was not impaired.

Also during the fourth quarter of 2016, we estimated the fair value of our indefinite-lived intangible asset, a tradename, using a present value technique, which required management's estimate of future revenues attributable to this tradename, estimation of the long-term growth rate and royalty rate for this revenue, and determination of our weighted average cost of capital. Changes in these estimates and assumptions could materially affect the estimate of fair value for the tradename. We determined that the carrying value of the tradename was not impaired based upon the impairment review.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables present our assets and liabilities measured at fair value on a recurring basis at December 31, 2016 and December 31, 2015:

(In thousands) December 31, 2016	Level 3		Gross Fair Value		Netting⁽¹⁾		Net Fair Value
Assets:
Cash Convertible Notes Hedges		48,361		48,361		—		48,361
Liabilities:
Cash Conversion Derivative		48,361		48,361		—		48,361

(In thousands) December 31, 2015	Level 2		Level 3		Gross Fair Value		Netting⁽¹⁾			Net Fair Value
Assets:
Foreign currency exchange contracts	$	284	$	—	$	284	$	(26	)	$	258
Cash Convertible Notes Hedges		—		12,632		12,632		—			12,632
Liabilities:
Foreign currency exchange contracts	$	48	$	—	$	48	$	(26	)	$	22
Interest rate swap agreements		397		—		397		—			397
Cash Conversion Derivative		—		12,632		12,632		—			12,632
Gallup Derivative		—		6,339		6,339		—			6,339

(1) This column reflects the impact of netting derivative assets and liabilities by counterparty when a legally enforceable master netting agreement exists.

The fair values of forward foreign currency exchange contracts were valued using broker quotations of similar assets or liabilities in active markets. The fair values of interest rate swap agreements were primarily determined based on the present value of future cash flows using internal models and third-party pricing services with observable inputs, including interest rates, yield curves and applicable credit spreads. The fair values of the Cash Convertible Notes Hedges and the Cash Conversion Derivative are measured using Level 3 inputs because these instruments are not actively traded. The Cash Convertible Notes Hedges and the Cash Conversion Derivative are valued using an option pricing model that uses observable and unobservable market data for inputs, such as expected time to maturity of the derivative instruments, the risk-free interest rate, the expected volatility of our common stock and other factors. The Cash Convertible Notes Hedges and the Cash Conversion Derivative were designed such that changes in their fair values would offset one another, with minimal impact to the consolidated statements of comprehensive income (loss). Therefore, the sensitivity of changes in the unobservable inputs to the option pricing model for such instruments is mitigated.

The following table presents our financial instruments measured at fair value on a recurring basis using unobservable inputs (Level 3):

(In thousands)	Balance at December 31, 2015			Purchases of Level 3 Instruments		Settlements of Level 3 Instruments		Gains (Losses) Included in Earnings			Balance at December 31, 2016
Cash Convertible Notes Hedges	$	12,632		$	—	$	—	$	35,729		$	48,361
Cash Conversion Derivative		(12,632	)		—		—		(35,729	)		(48,361	)
Gallup Derivative	$	(6,339	)	$	—	$	6,339	$	—		$	—

The gains and losses included in earnings noted above represent the change in the fair value of these financial instruments and are recorded each period in the consolidated statements of comprehensive income (loss). The gains and losses on the Cash Convertible Notes Hedges and Cash Conversion Derivative are recorded as selling, general and administrative expenses.

Fair Value of Other Financial Instruments

In addition to the interest rate swap agreements, the Cash Convertible Notes Hedges and the Cash Conversion Derivative, the estimated fair values of which are disclosed above, the estimated fair value of each class of financial instruments at December 31, 2016 was as follows:

Cash and cash equivalents – The carrying amount of $1.6 million approximates fair value because of the short maturity of those instruments (less than three months).

Long-term debt – The estimated fair value of outstanding borrowings under the Fifth Amended Credit Agreement, which includes a revolving credit facility and a term loan facility (see Note 7), and the Cash Convertible Notes are determined based on the fair value hierarchy as discussed above. The revolving credit facility and the term loan facility are not actively traded and therefore are classified as Level 2 valuations based on the market for similar instruments. The estimated fair value is based on the average of the prices set by the issuing bank given current market conditions and is not necessarily indicative of the amount we could realize in a current market exchange. The estimated fair value and carrying amount of outstanding borrowings under the Fifth Amended Credit Agreement at December 31, 2016 are $73.5 million and $73.5 million, respectively.

The Cash Convertible Notes are actively traded and therefore are classified as Level 1 valuations. The estimated fair value at December 31, 2016 was $187.7 million, which is based on the most recent trading price of the Cash Convertible Notes as of December 31, 2016, and the par value was $150.0 million. The carrying amount of the Cash Convertible Notes at December 31, 2016 was $137.9 million, which is net of the debt discount discussed in Note 7.