(5) FAIR VALUE MEASUREMENTS

Recurring Fair Value Measurements

The following table provides a summary of the Company's financial assets and liabilities which are measured at fair value on a recurring basis (in thousands):



	Fair Value of Financial Assets and Liabilities		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
March 31, 2019
Cash equivalents	$	42,377	$	42,377	$	—	$	—
FFF call right	328		—		—		328
Deferred compensation plan assets	48,367		48,367		—		—
Total assets	$	91,072	$	90,744	$	—	$	328
Earn-out liabilities	$	6,243	—		—		$	6,243
FFF put right	38,299		—		—		38,299
Total liabilities	$	44,542	$	—	$	—	$	44,542

June 30, 2018
Cash equivalents	$	62,684	$	62,684	$	—	$	—
FFF call right	610		—		—		610
Deferred compensation plan assets	48,215		48,215		—		—
Total assets	$	111,509	$	110,899	$	—	$	610
FFF put right	$	42,041	$	—	$	—	$	42,041
Total liabilities	$	42,041	$	—	$	—	$	42,041

Deferred compensation plan assets consisted of highly liquid mutual fund investments, which were classified as Level 1. The current portion of deferred compensation plan assets was included in prepaid expenses and other current assets ($4.7 million and $3.6 million at March 31, 2019 and June 30, 2018, respectively) in the accompanying Condensed Consolidated Balance Sheets.

Financial Instruments Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3)

FFF put and call rights

Pursuant to a shareholders' agreement entered into in connection with the Company's equity investment in FFF on July 26, 2016 (see Note 4 - Investments), which shareholders' agreement was amended and restated November 22, 2017, the majority shareholder of FFF has a put right that requires the Company to purchase (i) up to 50% of the majority shareholder's interest in FFF, which is exercisable beginning on the fourth anniversary of the investment closing date, July 26, 2020, and (ii) all or a portion of the majority shareholder's remaining interest in FFF 30 calendar days after December 31, 2020. Any such required purchases are to be made at a per share price equal to FFF's earnings before interest, taxes, depreciation and amortization ("EBITDA") over the twelve calendar months prior to the purchase date multiplied by a market adjusted multiple, adjusted for any outstanding debt and cash and cash equivalents ("Equity Value per Share"). In addition, under the amended and restated shareholders' agreement, the Company has a call right that requires the majority shareholder to sell its remaining interest in FFF to the Company, and is exercisable at any time within the later of 180 calendar days after the date of a Key Man Event (generally defined in the amended and restated shareholders' agreement as the resignation, termination for cause, death or disability of the majority shareholder) or after January 30, 2021. In the event that either of these rights are exercised, the purchase price for the additional interest in FFF will be at a per share price equal to the Equity Value per Share.

The fair values of the FFF put and call rights were determined based on the Equity Value per Share calculation using unobservable inputs, which included the estimated FFF put and call rights' expiration dates, the forecast of FFF's EBITDA over the option period, forecasted movements in the overall market and the likelihood of a Key Man Event. Significant changes to the Equity Value per Share resulting from changes in the unobservable inputs could have a significant impact on the fair values of the FFF put and call rights.

The Company recorded the FFF put and call rights within long-term other liabilities and long-term other assets, respectively, within the accompanying Condensed Consolidated Balance Sheets. Net changes in the fair values of the FFF put and call rights were recorded within other expense in the accompanying Condensed Consolidated Statements of Income.

Earn-out liabilities

Earn-out liabilities were established in connection with acquisitions of Healthcare Insights, LLC on July 31, 2015, Inflow Health, LLC on October 1, 2015, Innovatix, LLC and Essensa Ventures, LLC, each on December 2, 2016 and Stanson on November 9, 2018. The earn-out liabilities were classified as Level 3 of the fair value hierarchy and their values were determined based on estimated future earnings and the probability of achieving them. Changes in the fair values of the earn-out liabilities were recorded within selling, general and administrative expenses in the accompanying Condensed Consolidated Statements of Income.

A reconciliation of the Company's FFF put and call rights and earn-out liabilities is as follows (in thousands):



	Beginning Balance		Purchases (Settlements)			Gain (Loss)			Ending Balance
Three Months Ended March 31, 2019
FFF call right	$	431	$	—		$	(103	)	$	328
Total Level 3 assets	$	431	$	—		$	(103	)	$	328
Earn-out liabilities	$	4,548	$	—		$	(1,695	)	$	6,243
FFF put right	34,295		—			(4,004		)	38,299
Total Level 3 liabilities	$	38,843	$	—		$	(5,699	)	$	44,542

Three Months Ended March 31, 2018
FFF call right	$	2,108	$	—		$	(1,356	)	$	752
Total Level 3 assets	$	2,108	$	—		$	(1,356	)	$	752
Earn-out liabilities	$	2,792	$	(2,625	)	$	106		$	61
FFF put right	37,110		—			(1,711		)	38,821
Total Level 3 liabilities	$	39,902	$	(2,625	)	$	(1,605	)	$	38,882

Nine Months Ended March 31, 2019
FFF call right	$	610	$	—		$	(282	)	$	328
Total Level 3 assets	$	610	$	—		$	(282	)	$	328
Earn-out liabilities	$	—	$	4,548		$	(1,695	)	$	6,243
FFF put right	42,041		—			3,742			38,299
Total Level 3 liabilities	$	42,041	$	4,548		$	2,047		$	44,542

Nine Months Ended March 31, 2018
FFF call right	$	4,655	$	—		$	(3,903	)	$	752
Total Level 3 assets	$	4,655	$	—		$	(3,903	)	$	752
Earn-out liabilities	$	21,310	$	(21,125	)	$	124		$	61
FFF put right	24,050		—			(14,771		)	38,821
Total Level 3 liabilities	$	45,360	$	(21,125	)	$	(14,647	)	$	38,882

Non-Recurring Fair Value Measurements

During the nine months ended March 31, 2019, no non-recurring fair value measurements were required relating to the measurement of goodwill and intangible assets for impairment. However, purchase price allocations required significant non-recurring Level 3 inputs. The preliminary fair values of the acquired intangible assets resulting from the acquisition of Stanson were determined using the income approach (see Note 3 - Business Acquisitions).

Financial Instruments For Which Fair Value Only is Disclosed

The fair values of non-interest bearing notes payable, classified as Level 2, were less than their carrying values by approximately $0.6 million at both March 31, 2019 and June 30, 2018 based on assumed market interest rates of 3.8% and 3.6%, respectively.

Other Financial Instruments

The fair values of cash, accounts receivable, accounts payable, accrued liabilities and the Company's Credit Facility approximated carrying value due to the short-term nature of these financial instruments.