Fair Value Measurement

The valuation hierarchy for disclosure of assets and liabilities reported at fair value prioritizes the inputs for such valuations into three broad levels:


•	Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;


•	Level 2: quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument; or


•	Level 3: unobservable inputs based on the Company's own assumptions used to measure assets and liabilities at fair value.

A financial asset's or liability's classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

The following tables provide the assets and liabilities carried at fair value and measured on a recurring basis:



				Fair Value Measurements at Reporting Date Using:
(in thousands)	September 30, 2015			Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Cash equivalents	$	353,107		$	353,107	$	—	$	—
Short-term investments	$	684		$	—	$	684	$	—
Liabilities
Contingent consideration	$	(1,377	)	$	—	$	—	$	(1,377	)



				Fair Value Measurements at Reporting Date Using:
(in thousands)	December 31, 2014			Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Cash equivalents	$	281,333		$	281,333	$	—	$	—
Short-term investments	$	714		$	—	$	714	$	—
Liabilities
Contingent consideration	$	(2,621	)	$	—	$	—	$	(2,621	)

The cash equivalents in the preceding tables represent money market mutual funds.

The short-term investments in the preceding tables represent deposits held by certain foreign subsidiaries of the Company. The deposits have fixed interest rates with maturity dates ranging from three months to one year.

The contingent consideration in the tables above represents potential future payments related to the EVEN - Evolutionary Engineering AG ("EVEN") acquisition in accordance with the 2013 merger agreement. The net present value calculations for the contingent consideration include significant unobservable inputs in the assumption that all remaining payments will be made, and, therefore, the liabilities were classified as Level 3 in the fair value hierarchy.

The following tables present the changes in the Company’s Level 3 liabilities that are measured at fair value on a recurring basis during the three and nine months ended September 30, 2015 and 2014:



	Fair Value Measurement Using Significant Unobservable Inputs
(in thousands)	Contingent Consideration
Balance as of January 1, 2015	$	2,621
Interest expense and foreign exchange activity included in earnings	122
Balance as of March 31, 2015	$	2,743
Contingent payment	(1,456		)
Interest expense and foreign exchange activity included in earnings	107
Balance as of June 30, 2015	$	1,394
Interest expense and foreign exchange activity included in earnings	(17		)
Balance as of September 30, 2015	$	1,377



	Fair Value Measurement Using Significant Unobservable Inputs
(in thousands)	Contingent Consideration			Deferred Compensation
Balance as of January 1, 2014	$	7,389		$	704
Contingent payment	(1,578		)	—
Interest expense and foreign exchange activity included in earnings	164			3
Balance as of March 31, 2014	$	5,975		$	707
Interest expense and foreign exchange activity included in earnings	87			4
Balance as of June 30, 2014	$	6,062		$	711
Contingent payments	(3,288		)	(712		)
Interest expense and foreign exchange activity included in earnings	(121		)	1
Balance as of September 30, 2014	$	2,653		$	—

The carrying values of cash, accounts receivable, accounts payable, accrued expenses, other accrued liabilities and short-term obligations approximate their fair values because of their short-term nature.