Description of Business and Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2016

Schedule of Revenue by Product/Service Groups

Presented in the table below is the breakout of our revenue streams for each of those product/service groups for the three and six months ended June 30, 2016 and 2015.



	Three Months Ended				Six Months Ended
	June 30,				June 30,
(dollar amounts in thousands)	2016		2015		2016		2015
Exchanges	$	49,322	$	46,825	$	99,408	$	93,503
Broker Systems	3,885		3,519		7,097		7,255
Risk Compliance Solutions (“RCS”)	18,662		13,289		35,413		25,464
Carrier Systems	705		1,079		1,722		2,243
Totals	$	72,574	$	64,712	$	143,640	$	128,465

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

Additional information regarding the Company's assets and liabilities that are measured at fair value on a recurring basis is presented in the following tables:



	Fair Values at Reporting Date Using*
Descriptions	Balance, June 30, 2016		Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Assets
Available-for-sale securities:
Commercial bank certificates of deposits	$	2,904	$	2,904	$	—	$	—
Total assets measured at fair value	$	2,904	$	2,904	$	—	$	—

Liabilities
Derivatives:
Contingent accrued earn-out acquisition consideration (a)	$	2,878	$	—	$	—	$	2,878
Total liabilities measured at fair value	$	2,878	$	—	$	—	$	2,878

(a) The income valuation approach is applied and the valuation inputs include the contingent payment arrangement terms, projected cash flows, rate of return, and probability assessments.
* During the six months ended June 30, 2016 there were no transfers between fair value Levels 1, 2 or 3.



	Fair Values at Reporting Date Using*
Descriptions	Balance, December 31, 2015		Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Assets
Available-for-sale securities:
Commercial bank certificates of deposits	$	1,538	1,538		$	—	$	—
Total assets measured at fair value	$	1,538	$	1,538	$	—	$	—

Liabilities
Derivatives:
Contingent accrued earn-out acquisition consideration (a)	$	4,277	$	—	$	—	$	4,277
Total liabilities measured at fair value	$	4,277	$	—	$	—	$	4,277

(a) The income valuation approach is applied and the valuation inputs include the contingent payment arrangement terms, projected cash flows, rate of return, and probability assessments.
* During the twelve months ended December 31, 2015 there were no transfers between fair value Levels 1, 2 or 3.

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

For the Company's assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3), the following table provides a reconciliation of the beginning and ending balances for each category therein, and gains or losses recognized during the six months ended June 30, 2016 and during the year ended December 31, 2015:



Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Contingent Liability for Accrued Earn-out Acquisition Consideration	June 30, 2016			December 31, 2015
	(in thousands)

Beginning balance	$	4,277		$	5,367

Total remeasurement adjustments:
Gains included in earnings **	(511		)	(1,533		)
Reductions recorded against goodwill	(664		)	(2,000		)
Foreign currency translation adjustments ***	(224		)	(73		)

Acquisitions and settlements
Business acquisitions	—			2,516
Settlement payments	—			—

Ending balance	$	2,878		$	4,277

The amount of total (gains) losses for the period included in earnings or changes to net assets, attributable to changes in unrealized gains relating to assets or liabilities still held at period-end.	$	209		$	(1,533	)

** recorded as an adjustment to reported general and administrative expenses
*** recorded as a component of other comprehensive income within stockholders' equity

Quantitative Information about Level 3 Fair Value Measurements

The significant unobservable inputs used in the fair value measurement of the Company's contingent consideration liabilities designated as Level 3 are as follows:

Schedule of Goodwill

Changes in the carrying amount of goodwill for the six months ended June 30, 2016 and the year ended December 31, 2015 are reflected in the following table.



	June 30, 2016		December 31, 2015
	(In thousands)
Beginning Balance	$	402,259	$	402,220
Additions	—		8,868
Purchase accounting adjustments for acquisitions provisionally recorded (see Note 3 "Business Combinations")	4,298		(2,099		)
Contributed portions of CurePet investment to Joint Ventures, see Note 8, "Investment in Joint Ventures"	—		(1,783		)
Foreign currency translation adjustments	389		(4,947		)
Ending Balance	$	406,946	$	402,259

Schedule of Finite-Lived Intangible Assets by Major Class, Estimated Useful Lives

We amortize these intangible assets on a straight-line basis over their estimated useful lives, as follows:



Category		Life (yrs)
Customer relationships		7–20
Developed technology		3–12
Trademarks		3–15
Non-compete agreements		5
Backlog		1.2
Database		10

Schedule of Intangible Assets, Excluding Goodwill

The carrying value of finite-lived and indefinite-lived intangible assets at June 30, 2016 and December 31, 2015 are as follows:



	June 30, 2016			December 31, 2015
	(In thousands)
Finite-lived intangible assets:
Customer relationships	$	67,910		$	76,275
Developed technology	15,065			15,121
Trademarks	2,695			2,729
Non-compete agreements	764			743
Backlog	140			140
Database	212			212
Total intangibles	86,786			95,220
Accumulated amortization	(46,777		)	(43,372		)
Finite-lived intangibles, net	$	40,009		$	51,848

Indefinite-lived intangibles:
Customer/territorial relationships	$	30,887		$	30,887

(in thousands)

Fair Value at June 30, 2016

Valuation Technique

Significant Unobservable
Input

Contingent acquisition consideration:
(Qatarlyst, PB Systems, and Via Media acquisitions)

Discounted cash flow

Projected revenue and probability of achievement