v3.7.0.1
Fair Value Measurements
3 Months Ended
Mar. 31, 2017
Fair Value Disclosures [Abstract]  
Fair Value Measurements
Fair Value Measurements
Under applicable accounting guidance, fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.
We determine the fair values of our financial instruments based on the fair value hierarchy established under applicable accounting guidance which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs used to measure fair value.
For more information regarding the fair value hierarchy and how we measure fair value, see Note 2–Summary of Significant Accounting Policies to the Consolidated Financial Statements of our Annual Report on Form 10-K for the year ended December 31, 2016.



Note 13—Fair Value Measurements (continued)
As of March 31, 2017 and December 31, 2016, our assets and liabilities carried at fair value on a recurring basis were as follows:
 
Level 1
 
Level 2
 
Level 3
 
Total Fair Value
March 31, 2017
(In thousands)
Assets
 
 
 
 
 
 
 
Corporate bonds
$

 
$
12,059

 
$

 
$
12,059

Commercial paper

 
3,885

 

 
3,885

U.S. Treasury notes

 
25,837

 

 
25,837

Mortgage-backed securities

 
112,377

 

 
112,377

Municipal bonds

 
1,288

 

 
1,288

Asset-backed securities

 
28,363

 

 
28,363

Total assets
$

 
$
183,809

 
$

 
$
183,809

 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
Contingent consideration
$

 
$

 
$
26,442

 
$
26,442

 
 
 
 
 
 
 
 
December 31, 2016
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
Corporate bonds
$

 
$
21,535

 
$

 
$
21,535

Commercial paper

 
12,430

 

 
12,430

U.S. Treasury notes

 
21,563

 

 
21,563

Agency securities

 
4,001

 

 
4,001

Mortgage-backed securities

 
117,491

 

 
117,491

Municipal bonds

 
1,430

 

 
1,430

Asset-backed securities

 
29,976

 

 
29,976

Total assets
$

 
$
208,426

 
$

 
$
208,426

 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
Contingent consideration
$

 
$

 
$
8,634

 
$
8,634


We based the fair value of our fixed income securities held as of March 31, 2017 and December 31, 2016 on quoted prices in active markets for similar assets. We had no transfers between Level 1, Level 2 or Level 3 assets or liabilities during the three months ended March 31, 2017 or 2016.
The following table presents changes in our contingent consideration payable for the three months ended March 31, 2017 and 2016, which is categorized in Level 3 of the fair value hierarchy:
 
Three Months Ended March 31,
 
2017
 
2016
 
 
Balance, beginning of period
$
8,634

 
$
13,889

Issuance
18,000

 

Payments of contingent consideration
(192
)
 
(189
)
Balance, end of period
$
26,442

 
$
13,700