XML 40 R20.htm IDEA: XBRL DOCUMENT

Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2023

Fair Value [Abstract]

Fair Value of Financial Instruments

15.FAIR VALUE MEASUREMENTS

The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis in periods subsequent to their initial measurement. These tiers include: Level 1, defined as quoted market prices in active markets for identical assets or liabilities; Level 2, defined as inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, model-based valuation techniques for which all significant assumptions are observable in the market, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3, defined as unobservable inputs that are not corroborated by market data.

The Company’s financial assets and liabilities recorded at fair value on a recurring basis include derivative instruments and restricted cash and investments. At June 30, 2023 and December 31, 2022, the Company’s derivative instruments included pay-fixed, receive-variable interest rate swaps. The Company’s interest rate swaps are recorded at their estimated fair values based on quotes received from financial institutions that trade these contracts. The Company verifies the reasonableness of these quotes using similar quotes from another financial institution as of each date for which financial statements are prepared. For the Company’s interest rate swaps, the Company also considers the Company’s creditworthiness in its determination of the fair value measurement of these instruments in a net liability position and the counterparties’ creditworthiness in its determination of the fair value measurement of these instruments in a net asset position. The Company’s restricted cash is valued at quoted market prices in active markets for identical assets, which the Company receives from the financial institutions that hold such investments on its behalf. The Company’s restricted cash measured at fair value is invested primarily in money market accounts, bank time deposits and U.S. government and agency securities. The Company’s restricted investments are valued at quoted market prices in active markets for similar assets, which the Company receives from the financial institutions that hold such investments on its behalf. The Company’s restricted investments measured at fair value are invested primarily in money market accounts, bank time deposits, U.S. government and agency securities and Canadian bankers’ acceptance notes.

The Company’s assets and liabilities measured at fair value on a recurring basis at June 30, 2023 and December 31, 2022, were as follows:


		Fair Value Measurement at June 30, 2023 Using
					Quoted Prices in			Significant
					Active Markets			Other			Significant
					for Identical			Observable			Unobservable
					Assets			Inputs			Inputs
		Total			(Level 1)			(Level 2)			(Level 3)
Interest rate swap derivative instruments – net asset position		$	36,163		$	—		$	36,163		$	—
Restricted cash		$	112,623		$	112,623		$	—		$	—
Restricted investments		$	72,883		$	—		$	72,883		$	—
Contingent consideration		$	(92,409)		$	—		$	—		$	(92,409)


		Fair Value Measurement at December 31, 2022 Using
					Quoted Prices in			Significant
					Active Markets			Other			Significant
					for Identical			Observable			Unobservable
					Assets			Inputs			Inputs
		Total			(Level 1)			(Level 2)			(Level 3)
Interest rate swap derivative instruments – net asset position		$	31,807		$	—		$	31,807		$	—
Restricted cash		$	102,727		$	102,727		$	—		$	—
Restricted investments		$	66,402		$	—		$	66,402		$	—
Contingent consideration		$	(81,415)		$	—		$	—		$	(81,415)

The following table summarizes the changes in the fair value for Level 3 liabilities related to contingent consideration for the six months ended June 30, 2023 and 2022:


		Six Months Ended June 30,
		2023			2022
Beginning balance		$	81,415		$	94,308
Contingent consideration recorded at acquisition date			13,350			5,543
Payment of contingent consideration recorded at acquisition date			(2,193)			(8,898)
Adjustments to contingent consideration			(910)			(1,030)
Interest accretion expense			747			712
Ending balance		$	92,409		$	90,635

Fair Value of Financial Instruments (10-Q)

13.FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company’s financial instruments consist primarily of cash and equivalents, trade receivables, restricted cash and investments, trade payables, debt instruments, contingent consideration obligations and interest rate swaps. As of June 30, 2023 and December 31, 2022, the carrying values of cash and equivalents, trade receivables, restricted cash and investments, trade payables and contingent consideration are considered to be representative of their respective fair values. The carrying values of the Company’s debt instruments, excluding certain notes as listed in the table below, approximate their fair values as of June 30, 2023 and December 31, 2022, based on current borrowing rates, current remaining average life to maturity and borrower credit quality for similar types of borrowing arrangements, and are classified as Level 2 within the fair value hierarchy. The carrying values and fair values of the Company’s debt instruments where the carrying values do not approximate their fair values as of June 30, 2023 and December 31, 2022, are as follows:


		Carrying Value at						Fair Value ^(a) at
		June 30,			December 31,			June 30,			December 31,
		2023			2022			2023			2022
4.25% Senior Notes due 2028		$	500,000		$	500,000		$	480,900		$	470,850
3.50% Senior Notes due 2029		$	500,000		$	500,000		$	460,200		$	457,650
2.60% Senior Notes due 2030		$	600,000		$	600,000		$	516,360		$	510,540
2.20% Senior Notes due 2032		$	650,000		$	650,000		$	521,560		$	514,540
3.20% Senior Notes due 2032		$	500,000		$	500,000		$	435,300		$	429,000
4.20% Senior Notes due 2033		$	750,000		$	750,000		$	704,550		$	699,450
3.05% Senior Notes due 2050		$	500,000		$	500,000		$	339,450		$	343,300
2.95% Senior Notes due 2052		$	850,000		$	850,000		$	580,975		$	561,425

____________________

*Senior Notes are classified as Level 2 within the fair value hierarchy. Fair value inputs include third-party calculations of the market interest rate of notes with similar ratings in similar industries over the remaining note terms.

For details on the fair value of the Company’s interest rate swaps, restricted cash and investments and contingent consideration, refer to Note 15.