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

9 Months Ended

Sep. 30, 2014

Accounting Policies [Abstract]

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 nine months ended September 30, 2014 and 2013.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(dollar amounts in thousands)	2014		2013		2014		2013
Exchanges	$	41,757	$	40,554	$	125,212	$	122,741
Broker Systems	4,511		4,390		13,862		13,878
Risk Compliance Solutions (“RCS”), fka Business Process Outsourcing (“BPO”)	3,346		3,604		10,423		11,781
Carrier Systems	1,194		1,745		4,191		5,463
Totals	$	50,808	$	50,293	$	153,688	$	153,863

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, September 30, 2014		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	$	1,326	$	1,326	$	—	$	—
Total assets measured at fair value	$	1,326	$	1,326	$	—	$	—
Liabilities
Derivatives:
Contingent accrued earn-out acquisition consideration (a)	10,850		—		—		10,850
Total liabilities measured at fair value	$	10,850	$	—	$	—	$	10,850
(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 nine months ended September 30, 2014 there were no transfers between fair value Levels 1, 2 or 3.

	Fair Values at Reporting Date Using*
Descriptions	Balance, December 31, 2013		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	$	801	801		$	—	$	—
Total assets measured at fair value	$	801	$	801	$	—	$	—
Liabilities
Derivatives:
Common share-based put option (b)	$	845	$	—	845		$	—
Contingent accrued earn-out acquisition consideration (a)	14,420		—		—		14,420
Total liabilities measured at fair value	$	15,265	$	—	$	845	$	14,420
(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.
(b) In connection with the acquisition of PlanetSoft effective June 1, 2012, Ebix issued a put option to the PlanetSoft's three shareholders. The put option, which expired in July 9, 2014, was exercisable during the thirty-day period immediately following the two-year anniversary date of the closing of the business acquisition, which if exercised would enable the PlanetSoft shareholders to sell the underlying 296,560 shares of Ebix common stock they received as part of the purchase consideration, back to the Company at a price of $16.86 per share. The inputs used in the valuation of the put option include term, stock price volatility, current stock price, exercise price, and the risk free rate of return. During the months of July and August 2014 the former shareholders of PlanetSoft elected to exercise their put option rights with respect to the remaining 209,656 shares of Ebix common stock they still held. Accordingly the shareholders put those shares back to the Company at $16.86 per share plus interest at the rate of 20% as per the PlanetSoft acquisition agreement. The total consideration paid by the Company in connection with the exercise of these put options was $3.6 million.
* During the twelve months ended December 31, 2013 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 nine months ended September 30, 2014 and during the year ended December 31, 2013:

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Contingent Liability for Accrued Earn-out Acquisition Consideration	Balance, September 30, 2014			Balance, December 31, 2013
	(in thousands)
Beginning balance	$	14,420		$	17,495
Total remeasurement adjustments:
(Gains) or losses included in earnings **	(7,533		)	(10,253		)
Foreign currency translation adjustments ***	(228		)	730
Acquisitions and settlements
Business acquisitions	6,441			9,425
Settlement payments	(2,250		)	(2,977		)
Ending balance	$	10,850		$	14,420
The amount of total (gains) or losses for the period included in earnings or changes to net assets, attributable to changes in unrealized (gains) or losses relating to assets or liabilities still held at period-end.	$	(6,540	)	$	(9,954	)
** 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:

(in thousands)	Fair Value at September 30, 2014	Valuation Technique	Significant Unobservable Input
Contingent acquisition consideration: (TriSystems, Qatarlyst, CurePet, and HealthCare Magic acquisitions)	$10,850	Discounted cash flow	Projected revenue and probability of achievement

(in thousands)	Fair Value at December 31, 2013	Valuation Technique	Significant Unobservable Input
Contingent acquisition consideration: (Taimma, Planetsoft, TriSystems, and Qatarlyst acquisitions)	$14,420	Discounted cash flow	Projected revenue and probability of achievement

Schedule of Goodwill

Changes in the carrying amount of goodwill for the nine months ended September 30, 2014 and the year ended December 31, 2013 are reflected in the following table. Goodwill increased during this period due to the two business acquisitions that were made in January and May, and as more fully described in Note 3 "Business Combinations".

	September 30, 2014			December 31, 2013
	(In thousands)
Beginning Balance	$	337,068		$	326,748
Additions	14,353			11,136
Foreign currency translation adjustments	(1,166		)	(816		)
Ending Balance	$	350,255		$	337,068

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
Database	10

Schedule of Intangible Assets, Excluding Goodwill

The carrying value of finite-lived and indefinite-lived intangible assets at September 30, 2014 and December 31, 2013 are as follows:

	September 30, 2014			December 31, 2013
	(In thousands)
Finite-lived intangible assets:
Customer relationships	$	62,974		$	62,408
Developed technology	15,000			14,630
Trademarks	2,773			2,646
Non-compete agreements	759			538
Backlog	140			140
Database	212			212
Total intangibles	81,858			80,574
Accumulated amortization	(35,354		)	(29,840		)
Finite-lived intangibles, net	$	46,504		$	50,734
Indefinite-lived intangibles:
Customer/territorial relationships	$	30,887		$	30,887