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

9 Months Ended

Sep. 30, 2017

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 channels for the three and nine months ended September 30, 2017 and 2016.



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(dollar amounts in thousands)	2017		2016		2017		2016
Exchanges	$	64,130	$	52,016	$	177,117	$	151,424
Broker Systems	3,715		3,557		11,098		10,654
Risk Compliance Solutions (“RCS”)	24,265		18,076		68,780		53,489
Carrier Systems	690		959		2,295		2,681
Totals	$	92,800	$	74,608	$	259,290	$	218,248

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, 2017		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 ($2.6 million is recorded in the long term asset section of the consolidated balance sheets in "Other Assets")	$	8,091	$	8,091	$	—	$	—
Total assets measured at fair value	$	8,091	$	8,091	$	—	$	—

Liabilities
Derivatives:
Contingent accrued earn-out acquisition consideration (a)	$	39,179	$	—	$	—	$	39,179
Total liabilities measured at fair value	$	39,179	$	—	$	—	$	39,179

(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, 2017 there were no transfers between fair value Levels 1, 2 or 3.



	Fair Values at Reporting Date Using*
Descriptions	Balance, December 31, 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 ($925 thousand is recorded in the long term asset section of the consolidated balance sheets in "Other Assets")	$	4,030	4,030		$	—	$	—
Total assets measured at fair value	$	4,030	$	4,030	$	—	$	—

Liabilities
Derivatives:
Contingent accrued earn-out acquisition consideration (a)	$	8,510	$	—	$	—	$	8,510
Total liabilities measured at fair value	$	8,510	$	—	$	—	$	8,510

(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, 2016 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, 2017 and during the year ended December 31, 2016:



Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Contingent Liability for Accrued Earn-out Acquisition Consideration	September 30, 2017			December 31, 2016
	(in thousands)

Beginning balance	$	8,510		$	4,277

Total remeasurement adjustments:
Gains included in earnings **	(164		)	(1,344		)
Increases (Reductions) recorded against goodwill	(3,432		)	(664		)
Foreign currency translation adjustments ***	153			(208		)

Acquisitions and settlements
Business acquisitions	34,112			6,449

Ending balance	$	39,179		$	8,510

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. Vertex earnout period expired in the third quarter of 2016 and gain was realized.	$	—		$	(624	)

** recorded as a reduction 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 nine months ended September 30, 2017 and the year ended December 31, 2016 are reflected in the following table.



	September 30, 2017			December 31, 2016
	(In thousands)
Beginning Balance	$	441,404		$	402,259
Additions (see Note 3)	127,974			35,787
Purchase accounting adjustments	(11,342		)	4,298
Foreign currency translation adjustments	1,127			(940		)
Ending Balance	$	559,163		$	441,404

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 September 30, 2017 and December 31, 2016 are as follows:



	September 30, 2017			December 31, 2016
	(In thousands)
Finite-lived intangible assets:
Customer relationships	$	77,494		$	71,338
Developed technology	21,338			16,011
Trademarks	2,695			2,666
Non-compete agreements	764			764
Backlog	140			140
Database	212			212
Total intangibles	102,643			91,131
Accumulated amortization	(55,632		)	(49,795		)
Finite-lived intangibles, net	$	47,011		$	41,336

Indefinite-lived intangibles:
Customer/territorial relationships	$	38,694		$	30,887

(in thousands)

Fair Value at September 30, 2017

Valuation Technique

Significant Unobservable
Input

Contingent acquisition consideration:
(Qatarlyst, Wdev, and ItzCash acquisition)

Discounted cash flow

Projected revenue and probability of achievement