| General | NOTE A—General Basis of Presentation The accompanying unaudited consolidated financial statements of Magellan Health, Inc., a Delaware corporation (“Magellan”), include Magellan and its subsidiaries (together with Magellan, the “Company”). The financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the Securities and Exchange Commission’s (the “SEC”) instructions to Form 10-Q. Accordingly, the financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments considered necessary for a fair presentation, have been included. The results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of the results to be expected for the full year. All significant intercompany accounts and transactions have been eliminated in consolidation. On April 30, 2020, the Company and Molina Healthcare, Inc. (“Molina”) entered into a Stock and Asset Purchase Agreement (the “Purchase Agreement”) pursuant to which the Company has agreed to sell its Magellan Complete Care (“MCC”) business to Molina (the “MCC Sale”) for $850.0 million in cash, subject to certain adjustments, and Molina has agreed to assume liabilities of the MCC business. Accordingly, the accompanying consolidated financial statements for all periods presented reflect the MCC business as discontinued operations. See Note E—“Discontinued Operations” for additional information. These unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2019 and the notes thereto, which are included in the Company’s Annual Report on Form 10-K filed with the SEC on February 28, 2020. Business Overview The Company provides managed care services for some of the most complex areas of healthcare. The Company offers innovative solutions that combine analytics, technology and clinical rigor to drive better decision making, positively impact members’ health outcomes and optimize the cost of care for the customers Magellan serves. The Company provides services to health plans and other managed care organizations (“MCOs”), employers, labor unions, various military and governmental agencies and third-party administrators (“TPAs”). Magellan operates three segments: Healthcare, Pharmacy Management and Corporate. Healthcare The Healthcare segment “Healthcare” previously consisted of two reporting units – Behavioral & Specialty Health and MCC. As a result of the MCC Sale, the Healthcare segment now only includes the Behavioral and Specialty Health reporting unit. The Behavioral & Specialty Health reporting unit’s customers include health plans, accountable care organizations (“ACOs”), employers, the United States military and various federal government agencies for whom Magellan provides carve-out management services for (i) behavioral health, (ii) employee assistance plans (“EAP”) and (iii) other areas of specialty healthcare including diagnostic imaging, musculoskeletal management, cardiac and physical medicine. These management services can be applied broadly across commercial, Medicaid and Medicare populations, or on a more targeted basis for our health plans and ACO customers. The Behavioral & Specialty Health unit also includes Magellan’s carve-out behavioral health contracts with various state Medicaid agencies. MCC, which is now reflected as discontinued operations, contracts with state Medicaid agencies and the Centers for Medicare and Medicaid Services (“CMS”) to manage care for beneficiaries under various Medicaid and Medicare programs. MCC manages a wide range of services from total medical cost to carve out long-term support services. MCC largely focuses on managing care for more acute special populations including individuals with serious mental illness (“SMI”), dual eligibles, aged, blind and disabled (“ABD”) and other populations with unique and often complex healthcare needs. The Company provides its Healthcare management services primarily through: (i) risk-based contractual arrangements, where the Company assumes all or a substantial portion of the responsibility for the cost of providing treatment services in exchange for a fixed PMPM fee, or (ii) administrative services only (“ASO”) contractual arrangements, where the Company provides services such as utilization review, claims administration and/or provider network management, but does not assume full responsibility for the cost of the treatment services, in exchange for an administrative fee and, in some instances, a gain share. Pharmacy Management The Pharmacy Management segment (“Pharmacy Management”) is comprised of services that provide clinical and financial management of pharmaceuticals paid under both the medical and the pharmacy benefit. Pharmacy Management’s customer solutions include: (i) pharmacy benefit management (“PBM”) services, including pharmaceutical dispensing operations; (ii) pharmacy benefit administration (“PBA”) for state Medicaid and other government sponsored programs; (iii) clinical and formulary management programs; (iv) medical pharmacy management programs; and (v) programs for the integrated management of specialty drugs across both the medical and pharmacy benefit that treat complex conditions, regardless of site of service, method of delivery, or benefit reimbursement. These services are available individually, in combination, or in a fully integrated manner. The Company markets its pharmacy management services to managed care organizations, employers, third party administrators, state governments, Medicare Part D, and other government agencies, exchanges, brokers and consultants. In addition, the Company will continue to upsell its pharmacy services to its existing customers and market its pharmacy solutions to the Healthcare customer base. Pharmacy Management contracts with its customers for services using risk-based, gain share or ASO arrangements. In addition, Pharmacy Management provides services to the Healthcare segment for most of the MCC business. On May 11, 2020, the Company announced its decision to exit the Medicare Part D business at the end of 2020. The Company will retain its Medicare Employer Group Waiver Plan as well as full capabilities to serve the PBM needs of its existing and prospective Medicare customers. Corporate This segment of the Company is comprised primarily of amounts not allocated to the Healthcare and Pharmacy Management segments that are largely associated with costs related to being a publicly traded company. Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates of the Company can include, among other things, valuation of goodwill and intangible assets, medical claims payable, other medical liabilities, stock compensation assumptions, tax contingencies and legal liabilities. In addition, the Company also makes estimates in relation to revenue recognition under Accounting Standard Codification 606 (“ASC 606”) which are explained in more detail in “ Revenue Recognition Revenue Recognition Virtually all of the Company’s revenues are derived from business in North America. The following tables disaggregate our revenue for the three and six months ended June 30, 2019 and 2020 by major service line, type of customer and timing of revenue recognition (in thousands): Three Months Ended June 30, 2019 Healthcare Pharmacy Management Elimination Total Major Service Lines Behavioral & Specialty Health Risk-based, non-EAP $ 400,591 $ — $ (65) $ 400,526 EAP risk-based 87,296 — — 87,296 ASO 58,226 10,327 (82) 68,471 PBM, including dispensing — 480,167 (4,335) 475,832 Medicare Part D — 69,843 — 69,843 PBA — 33,476 — 33,476 Formulary management — 18,426 — 18,426 Other — 419 — 419 Total net revenue $ 546,113 $ 612,658 $ (4,482) $ 1,154,289 Type of Customer Government $ 236,014 $ 173,804 $ — $ 409,818 Non-government 310,099 438,854 (4,482) 744,471 Total net revenue $ 546,113 $ 612,658 $ (4,482) $ 1,154,289 Timing of Revenue Recognition Transferred at a point in time $ — $ 550,010 $ (4,335) $ 545,675 Transferred over time 546,113 62,648 (147) 608,614 Total net revenue $ 546,113 $ 612,658 $ (4,482) $ 1,154,289 Three Months Ended June 30, 2020 Healthcare Pharmacy Management Elimination Total Major Service Lines Behavioral & Specialty Health Risk-based, non-EAP $ 344,199 $ — $ (92) $ 344,107 EAP risk-based 77,419 — — 77,419 ASO 59,403 12,271 (85) 71,589 PBM, including dispensing — 499,484 (4,831) 494,653 Medicare Part D — 56,711 — 56,711 PBA — 30,811 — 30,811 Formulary management — 25,061 — 25,061 Other — (276) — (276) Total net revenue $ 481,021 $ 624,062 $ (5,008) $ 1,100,075 Type of Customer Government $ 222,393 $ 208,989 $ — $ 431,382 Non-government 258,628 415,073 (5,008) 668,693 Total net revenue $ 481,021 $ 624,062 $ (5,008) $ 1,100,075 Timing of Revenue Recognition Transferred at a point in time $ — $ 556,195 $ (4,831) $ 551,364 Transferred over time 481,021 67,867 (177) 548,711 Total net revenue $ 481,021 $ 624,062 $ (5,008) $ 1,100,075 Six Months Ended June 30, 2019 Healthcare Pharmacy Management Elimination Total Major Service Lines Behavioral & Specialty Health Risk-based, non-EAP $ 762,399 $ — $ (143) $ 762,256 EAP risk-based 176,913 — — 176,913 ASO 113,623 18,470 (173) 131,920 PBM, including dispensing — 973,391 (8,442) 964,949 Medicare Part D — 133,184 — 133,184 PBA — 67,453 — 67,453 Formulary management — 35,609 — 35,609 Other — 1,011 — 1,011 Total net revenue $ 1,052,935 $ 1,229,118 $ (8,758) $ 2,273,295 Type of Customer Government $ 467,076 $ 401,852 $ — $ 868,928 Non-government 585,859 827,266 (8,758) 1,404,367 Total net revenue $ 1,052,935 $ 1,229,118 $ (8,758) $ 2,273,295 Timing of Revenue Recognition Transferred at a point in time $ — $ 1,106,575 $ (8,442) $ 1,098,133 Transferred over time 1,052,935 122,543 (316) 1,175,162 Total net revenue $ 1,052,935 $ 1,229,118 $ (8,758) $ 2,273,295 Six Months Ended June 30, 2020 Healthcare Pharmacy Management Elimination Total Major Service Lines Behavioral & Specialty Health Risk-based, non-EAP $ 694,044 $ — $ (182) $ 693,862 EAP risk-based 157,357 — — 157,357 ASO 118,526 23,805 (168) 142,163 PBM, including dispensing — 1,017,596 (9,398) 1,008,198 Medicare Part D — 112,377 — 112,377 PBA — 60,940 — 60,940 Formulary management — 47,222 — 47,222 Other — 335 — 335 Total net revenue $ 969,927 $ 1,262,275 $ (9,748) $ 2,222,454 Type of Customer Government $ 449,495 $ 412,946 $ — $ 862,441 Non-government 520,432 849,329 (9,748) 1,360,013 Total net revenue $ 969,927 $ 1,262,275 $ (9,748) $ 2,222,454 Timing of Revenue Recognition Transferred at a point in time $ — $ 1,129,973 $ (9,398) $ 1,120,575 Transferred over time 969,927 132,302 (350) 1,101,879 Total net revenue $ 969,927 $ 1,262,275 $ (9,748) $ 2,222,454 Per Member Per Month (“PMPM”) Revenue. Under certain government contracts, our risk scores are compared with the overall average risk scores for the relevant state and market pool. Generally, if our risk score is below the average risk score, we are required to make a risk adjustment payment into the risk pool, and if our risk score is above the average risk score, we will receive a risk adjustment payment from the risk pool. Risk adjustments can have a positive or negative retroactive impact to rates. Pharmacy Benefit Management Revenue. The Company’s customers for PBM business, including pharmaceutical dispensing operations, are generally comprised of MCOs, employer groups and health plans. PBM relationships generally have an expected term of one year or longer. A master services arrangement (“MSA”) is executed by the Company and the customer, which outlines the terms and conditions of the PBM services to be provided. When a member in the customer’s organization submits a prescription, a claim is created which is presented for approval. The acceptance of each individual claim creates enforceable rights and obligations for each party and represents a separate contract. For each individual claim, the performance obligations are limited to the processing and adjudication of the claim, or dispensing of the products purchased. Generally, the transaction price for PBM services is explicitly listed in each contract and does not represent variable consideration. The Company recognizes PBM revenue, which consists of a negotiated prescription price (ingredient cost plus dispensing fee), co-payments and any associated administrative fees, when claims are adjudicated or the drugs are shipped. The Company recognizes PBM revenue on a gross basis (i.e. including drug costs and co-payments) as it is acting as the principal in the arrangement, controls the underlying service, and is contractually obligated to its clients and network pharmacies, which is a primary indicator of gross reporting. In addition, the Company is solely responsible for the claims adjudication process, negotiating the prescription price for the pharmacy, collecting payments from the client for drugs dispensed by the pharmacy, and managing the total prescription drug relationship with the client’s members. If the Company enters into a contract where it is only an administrator, and does not assume any of the risks previously noted, revenue will be recognized on a net basis. For dispensing, at the time of shipment, the earnings process is complete; the obligation of the Company’s customer to pay for the specialty pharmaceutical drugs is fixed, and, due to the nature of the product, the member may neither return the specialty pharmaceutical drugs nor receive a refund. Medicare Part D. st Pharmacy Benefit Administration Revenue. 2 Formulary Management Revenue. The Company administers formulary management programs for certain clients through which the Company coordinates the achievement, calculation and collection of rebates and administrative fees from pharmaceutical manufacturers on behalf of clients. Formulary management contracts generally have a term of one year or longer. All formulary management contracts have a single performance obligation that constitutes a series for the provision of rebate services for a drug, with utilization measured and settled on a quarterly basis, for the duration of the arrangement. The Company retains its administrative fee and/or a percentage of rebates that is included in its contract with the client from collecting the rebate from the manufacturer. While the administrative fee and/or the percentage of rebates retained is fixed, there is an unknown quantity of pharmaceutical purchases (utilization) during each quarter; therefore the transaction price itself is variable. The Company uses the expected value methodology to estimate the total rebates earned each quarter based on estimated volumes of pharmaceutical purchases by the Company’s clients during the quarter, as well as historical and/or anticipated retained rebate percentages. The Company does not record as rebate revenue any rebates that are passed through to its clients. In relation to the Company’s PBM business, the Company administers rebate programs through which it receives rebates from pharmaceutical manufacturers that are shared with its customers. The Company recognizes rebates when the Company is entitled to them and when the amounts of the rebates are determinable. The amount recorded for rebates earned by the Company from the pharmaceutical manufacturers is recorded as a reduction of cost of goods sold. Government EAP Risk-Based Revenue. The Company has certain contracts with federal customers for the provision of various managed care services, which are classified as EAP risk-based business. These contracts are generally multi-year arrangements. The Company’s federal contracts are reimbursed on either a fixed fee basis or a cost reimbursement basis. The performance obligation on a fixed fee contract is to stand ready to provide the staffing required for the contracted period. For fixed fee contracts, the Company believes the invoiced amount corresponds directly with the value to the customer of the Company’s performance completed to date; therefore, the Company is utilizing the “right to invoice” practical expedient, with revenue recognition in the amount for which the Company has the right to invoice. The performance obligation on a cost reimbursement contract is to stand ready to provide the activity or services purchased by the customer, such as the operation of a counseling services group or call center. The performance obligation represents a series for the duration of the arrangement. The reimbursement rate is fixed per the contract; however, the level of activity (e.g., number of hours, number of counselors or number of units) is variable. A majority of the Company’s cost reimbursement transaction price relates specifically to its efforts to transfer the service for a distinct increment of the series (e.g. day or month) and is recognized as revenue when the portion of the series for which it relates has been provided (i.e. as the Company provides hours, counselors or units of service). In accordance with ASC 606-10-50-13, the Company is required to include disclosure on its remaining performance obligations as of the end of the current reporting period. Due to the nature of the contracts in the Company’s PBM and Part D business, these reporting requirements are not applicable. The majority of the Company’s remaining contracts meet certain exemptions as defined in ASC 606-10-50-14 through 606-10-50-14A, including (i) performance obligation is part of a contract that has an original expected duration of one year or less; (ii) the right to invoice practical expedient; and (iii) variable consideration related to unsatisfied performance obligations that is allocated entirely to a wholly unsatisfied promise to transfer a distinct service that forms part of a single performance obligation, and the terms of that variable consideration relate specifically to our efforts to transfer the distinct service, or to a specific outcome from transferring the distinct service. For the Company’s contracts that pertain to these exemptions: (i) the remaining performance obligations primarily relate to the provision of managed healthcare services to the customers’ membership; (ii) the estimated remaining duration of these performance obligations ranges from the remainder of the current calendar year to three years; and (iii) variable consideration for these contracts primarily includes net PMPM fees associated with unspecified membership that fluctuates throughout the contract. Accounts Receivable, Contract Assets and Contract Liabilities Accounts receivable, contract assets and contract liabilities consisted of the following (in thousands, except percentages): December 31, June 30, 2019 2020 $ Change % Change Accounts receivable $ 717,455 $ 837,710 $ 120,255 16.8% Contract assets 2,162 7,151 4,989 230.8% Contract liabilities - current 6,728 25,769 19,041 283.0% Contract liabilities - long-term 11,099 11,022 (77) (0.7%) Accounts receivable, which are included in accounts receivable, other current assets and other long-term assets on the consolidated balance sheets, increased by $120.3 million, mainly due to timing of receipts and HIF accrual. Contract assets, which are included in other current assets on the consolidated balance sheets, increased by $5.0 million, mainly due to the timing of accrual of certain performance incentives and annual settlements. Contract liabilities – current, which are included in accrued liabilities on the consolidated balance sheets, increased by $19.0 million, mainly due to the HIF recognition in the current year period. Contract liabilities – long-term, which are included in deferred credits and other long-term liabilities on the consolidated balance sheets, are consistent with prior year. During the three months ended June 30 2020, the Company recognized revenue of $2.0 million that was included in current contract liabilities at March 31, 2020. During the six months ended June 30, 2020, the Company recognized revenue of $4.0 million that was included in current contract liabilities as December 31, 2019. The estimated timing of recognition of amounts included in contract liabilities at June 30, 2020 are as follows: 2020 —$24.0 million; 2021 —$3.6 million; 2022 —$3.1 million; 2023 and beyond —$6.1 million. During the three and six months ended June 30, 2020, the revenue the Company recognized related to performance obligations that were satisfied, or partially satisfied, in previous periods was not material. The Company’s accounts receivable consists of amounts due from customers throughout the United States. Collateral is generally not required. A majority of the Company’s contracts have payment terms in the month of service, or within a few months thereafter. The timing of payments from customers from time to time generates contract assets or contract liabilities; however, these amounts are immaterial. The Company’s accounts receivable is net of an allowance for credit losses. The estimate of current expected credit losses on trade receivables considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. Management elected to disaggregate trade receivables into business segments due to risk characteristics unique to each platform given the individual lines of business and market. Pooling was further disaggregated based on either geography or product type. The Company leveraged historical write offs over a defined lookback period in deriving a historical loss rate. The expected credit loss model further considers current conditions and reasonable and supportable forecasts through the use of an adjustment for current and projected macroeconomic factors. Management identified appropriate macroeconomic indicators based on tangible correlation to historical losses, giving consideration to the location and risks associated with the Company’s customers. Significant Customers Customers exceeding ten percent of the consolidated Company’s net revenues The Company had no customers that exceeded ten percent of the Company’s net revenues from continuing operations. The following MCC customers, which are included in discontinued operations, previously exceeded ten percent of the Company’s consolidated net revenues. The Company has contracts with the Commonwealth of Virginia (the “Virginia Contracts”). The Company began providing Medicaid managed long-term services and supports to enrollees in the Commonwealth Coordinated Care Plus (“CCC Plus”) program on August 1, 2017. The CCC Plus contract expires annually on December 31 and automatically renews annually on January 1 for a period of five The Company had a contract with the State of New York (the “New York Contract”) to provide integrated managed care services to Medicaid and Medicare enrollees in the State of New York. The Company’s New York Contract terminated on December 31, 2016; however, the Company, along with other participating managed care plans in the state, continues to provide services while a new contract is being finalized. The New York Contracts generated net revenues of $400.6 million and $411.7 million for the six months ended June 30, 2019 and 2020, respectively, which are reported as discontinued operations. The Company has contracts with the Commonwealth of Massachusetts and CMS (the “Massachusetts Contracts”) to provide integrated managed care services to Medicaid and Medicare enrollees in the Commonwealth of Massachusetts. Medicaid services are provided under a Senior Care Options contract (“SCO Contract”) which began on January 1, 2016 and extends through December 31, 2021, with the potential for up to five additional one-year extensions. The Commonwealth of Massachusetts may terminate the contract with cause without prior notice and upon 180 days ’ notice without cause. Medicare services are provided under a one-year contract with CMS. The CMS contract currently extends through December 31, 2020. The Company began recognizing revenue in relation to the Massachusetts Contracts on November 1, 2017 as a result of the acquisition of SWH Holdings, Inc. The Massachusetts Contracts generated net revenues of $360.9 million and $359.7 million for the six months ended June 30, 2019 and 2020, respectively, which are reported within discontinued operations. Customers exceeding ten percent of segment net revenues The following customers generated in excess of ten percent of net revenues for the respective segment for the six months ended June 30, 2019 and 2020 (in thousands): Segment Term Date 2019 2020 Healthcare Customer A December 31, 2021 $ 161,887 $ 175,107 Pharmacy Management Customer B March 31, 2021 $ 174,535 $ 195,930 Concentration of Business The Company also has a significant concentration of business with various counties in the State of Pennsylvania (the “Pennsylvania Counties”) which are part of the Pennsylvania Medicaid program, with members under its contract with CMS and with various agencies and departments of the United States federal government. Net revenues from the Pennsylvania Counties in the aggregate totaled $271.4 million and $272.2 million for the six months ended June 30, 2019 and 2020, respectively. Net revenues from members in relation to its contracts with CMS in aggregate totaled $133.2 million and $112.3 million for the six months ended June 30, 2019 and 2020, respectively. As of December 31, 2019 and June 30, 2020, the Company had $117.4 million and $114.3 million, respectively, in net receivables associated with Medicare Part D from CMS and other parties related to this business. In May 2020, the Company announced its decision to exit the Part D business at the end of 2020. Net revenues from contracts with various agencies and departments of the United States federal government in aggregate totaled $156.7 million and $136.1 million for the six months ended June 30, 2019 and 2020, respectively. The Company’s contracts with customers typically have stated terms of one one Leases The Company leases certain office space, distribution centers, land and equipment. We assess our contracts to determine if it contains a lease. This assessment is based on (i) the right to control the use of an identified asset; (ii) the right to obtain substantially all of the economic benefits from the use of the identified asset; and (iii) the right to use the identified asset. The Company elected the short-term lease practical expedient; thus, leases with an initial term of twelve months or less are not capitalized and the expense is recognized on a straight-line basis. Most leases include one or more options to renew, with renewal terms that can extend the lease from one Operating leases are included in other long-term assets, accrued liabilities and deferred credits and other long-term liabilities in the consolidated balance sheets. Finance leases are included in property and equipment, current debt, finance lease deferred financing obligations and long-term debt, finance lease and deferred financing obligations in the consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments per the lease. Operating lease ROU assets and liabilities are recognized at lease commencement date based on the present value of lease payments over the lease term. As the rate implicit in most of our leases is not readily determinable, the Company used its incremental borrowing rate to determine the present value of lease payments. The following table shows the components of lease expenses for the three and six months ended June 30, 2020 (in thousands): Three Months Ended Six Months Ended Operating lease cost $ 2,503 $ 4,604 Finance lease cost: Amortization of right-of-use asset 1,046 2,378 Interest on lease liabilities 213 427 Total finance lease cost 1,259 2,805 Short-term lease cost 80 204 Variable lease cost 505 1,011 Total lease cost 4,347 8,624 Sublease income (66) (179) Net lease cost $ 4,281 $ 8,445 The following table shows the components of the lease assets and liabilities as of June 30, 2020 (in thousands): June 30, 2020 Operating leases: Other long-term assets $ 20,832 Accrued liabilities $ 23,959 Deferred credits and other long-term liabilities 9,661 Total operating lease liabilities $ 33,620 Finance leases: Property and equipment, net $ 13,489 Current debt, finance lease and deferred financing obligations $ 4,989 Long-term debt, finance lease and deferred financing obligations 14,024 Total finance lease liabilities $ 19,013 The maturity dates of the Company’s leases as of June 30, 2020 are summarized below (in thousands): June 30, 2020 2020 $ 8,201 2021 13,819 2022 12,518 2023 9,295 2024 7,927 2025 and beyond 2,581 Total lease payments 54,341 Less interest (1,708) Present value of lease liabilities $ 52,633 The following table shows the weighted average remaining lease term and discount rate as of June 30, 2020: June 30, 2020 Weighted average remaining lease term Operating leases 3.96 Finance leases 4.08 Weighted average discount rate Operating leases 4.79% Finance leases 4.39% Six months ended June 30, 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 6,196 Operating cash flows from finance leases 2,815 Financing cash flows from finance leases 427 Right-of-use asset obtained in exchange for new lease obligation Operating leases 902 Finance leases 3,599 Fair Value Measurements The Company has certain assets and liabilities that are required to be measured at fair value on a recurring basis. These assets and liabilities are to be measured using inputs from the three levels of the fair value hierarchy, which are as follows: Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2—Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc |
