General (Tables)

9 Months Ended

Sep. 30, 2017

Schedule of customers generating in excess of ten percent of net revenues for respective segment

In addition to the Florida Contract, previously discussed, the following customers generated in excess of ten percent of net revenues for the respective segment for the nine months ended September 30, 2016 and 2017 (in thousands):


Segment	Term Date	2016		2017

Healthcare
None

Pharmacy Management
Customer A	December 31, 2016 (1)	$	261,094	$	3,709	*
Customer B	March 31, 2019		78,471		266,795

* Revenue amount did not exceed 10 percent of net revenues for the respective segment for the year presented. Amount is shown for comparative purposes only.

(1)

A vast majority of this customer’s revenues were generated from drug acquisition costs related to PBM services which terminated on September 1, 2016. The Company continues to provide specialty distribution services to the customer and is in negotiations with the customer to extend this contract.

Schedule of fair value of financial assets and liabilities

In accordance with the fair value hierarchy described above, the following table shows the fair value of the Company’s assets and liabilities that are required to be measured at fair value as of December 31, 2016 and September 30, 2017 (in thousands):


	December 31, 2016
	Level 1		Level 2		Level 3		Total
Assets
Cash and cash equivalents (1)	$	—	$	177,495	$	—	$	177,495
Investments:
U.S. Government and agency securities		5,817		—		—		5,817
Obligations of government-sponsored enterprises (2)		—		25,767		—		25,767
Corporate debt securities		—		272,219		—		272,219
Certificates of deposit		—		1,450		—		1,450
Total assets held at fair value	$	5,817	$	476,931	$	—	$	482,748

Liabilities
Contingent consideration	$	—	$	—	$	11,153	$	11,153
Total liabilities held at fair value	$	—	$	—	$	11,153	$	11,153


	September 30, 2017
	Level 1		Level 2		Level 3		Total
Assets
Cash and cash equivalents (3)	$	—	$	392,039	$	—	$	392,039
Investments:
U.S. Government and agency securities		8,668		—		—		8,668
Obligations of government-sponsored enterprises (4)		—		13,264		—		13,264
Corporate debt securities		—		295,181		—		295,181
Taxable municipal bonds		—		5,014		—		5,014
Certificates of deposit		—		1,350		—		1,350
Total assets held at fair value	$	8,668	$	706,848	$	—	$	715,516

Liabilities
Contingent consideration	$	—	$	—	$	9,490	$	9,490
Total liabilities held at fair value	$	—	$	—	$	9,490	$	9,490

(1)

Excludes $127.0 million of cash held in bank accounts by the Company.

(2)

Includes investments in notes issued by the Federal Home Loan Bank, Federal Farm Credit Banks and Federal National Mortgage Association.

(3)

Excludes $112.7 million of cash held in bank accounts by the Company.

(4)

Includes investments in notes issued by the Federal Home Loan Bank and Federal Farm Credit Banks.

Summary of the Company's liability for contingent consideration

The following table summarizes the Company’s liability for contingent consideration for the nine months ended September 30, 2017 (in thousands):


	September 30,
	2017
Balance as of beginning of period	$	11,153
Changes in fair value		(631)
Payments		(1,032)
Balance as of end of period	$	9,490

Summary of short-term and long-term investments

The following is a summary of short‑term and long‑term investments at December 31, 2016 and September 30, 2017 (in thousands):


	December 31, 2016
			Gross		Gross
	Amortized		Unrealized		Unrealized		Estimated
	Cost		Gains		Losses		Fair Value
U.S. Government and agency securities	$	5,832	$	—	$	(15)	$	5,817
Obligations of government-sponsored enterprises (1)		25,779		2		(14)		25,767
Corporate debt securities		272,479		1		(261)		272,219
Certificates of deposit		1,450		—		—		1,450
Total investments at December 31, 2016	$	305,540	$	3	$	(290)	$	305,253


	September 30, 2017
			Gross		Gross
	Amortized		Unrealized		Unrealized		Estimated
	Cost		Gains		Losses		Fair Value
U.S. Government and agency securities	$	8,689	$	—	$	(21)	$	8,668
Obligations of government-sponsored enterprises (2)		13,279		—		(15)		13,264
Corporate debt securities		295,384		1		(204)		295,181
Taxable municipal bonds		5,017		—		(3)		5,014
Certificates of deposit		1,350		—		—		1,350
Total investments at September 30, 2017	$	323,719	$	1	$	(243)	$	323,477

(1)

Includes investments in notes issued by the Federal Home Loan Bank, Federal National Mortgage Association and Federal Farm Credit Banks.

(2)

Includes investments in notes issued by the Federal Home Loan Bank and Federal Farm Credit Banks.

Summary of maturity dates of investments

The maturity dates of the Company’s investments as of September 30, 2017 are summarized below (in thousands):


	Amortized		Estimated
	Cost		Fair Value
2017	$	98,136	$	98,105
2018		216,697		216,498
2019		8,886		8,874
Total investments at September 30, 2017	$	323,719	$	323,477

Schedule of stock option activity

Summarized information related to the Company’s stock options for the nine months ended September 30, 2017 is as follows:


		Weighted
		Average
		Exercise
	Options	Price
Outstanding, beginning of period	2,843,177	$	57.42
Granted	454,596		69.44
Forfeited	(53,596)		59.65
Exercised	(583,395)		52.76
Outstanding, end of period	2,660,782	$	60.46
Vested and expected to vest at end of period	2,640,924	$	60.41
Exercisable, end of period	1,597,984	$	57.12

Schedule of nonvested restricted stock award activity

Summarized information related to the Company’s nonvested restricted stock awards (“RSAs”) for the nine months ended September 30, 2017 is as follows:



		Weighted
		Average
		Grant Date
	Shares	Fair Value
Outstanding, beginning of period	615,472	$	58.71
Awarded	14,959		70.20
Vested	(47,710)		65.24
Forfeited	—		—
Outstanding, ending of period	582,721		58.47

Schedule of nonvested restricted stock units

Summarized information related to the Company’s nonvested restricted stock units (“RSUs”) for the nine months ended September 30, 2017 is as follows:



		Weighted
		Average
		Grant Date
	Shares	Fair Value
Outstanding, beginning of period	200,178	$	61.65
Awarded	107,417		68.53
Vested	(117,069)		60.52
Forfeited	(16,285)		65.48
Outstanding, ending of period	174,241		66.29

Schedule of nonvested restricted performance stock units

Summarized information related to the Company’s nonvested restricted performance stock units (“PSUs”) for the nine months ended September 30, 2017 is as follows:


		Weighted
		Average
		Grant Date
	Shares	Fair Value
Outstanding, beginning of period	102,977	$	93.03
Awarded	101,989		76.24
Vested	—		—
Forfeited	(2,651)		87.75
Outstanding, end of period	202,315		84.63