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Fair Value Measurements | 6 Months Ended
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Jun. 30, 2022
Fair Value Disclosures [Abstract] |
Fair Value Measurements | Fair Value Measurements The Company complies with the provisions of ASC 820, which defines fair value, provides a framework for measuring fair value and expands the disclosures required for fair value measurements of financial and non-financial assets and liabilities. ASC 820 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value.
| § | Level 1 – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
| § | Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
| § | Level 3 – Unobservable inputs which are supported by little or no market activity.
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company’s money market funds are classified within Level 1. The Company values these Level 1 investments using quoted market prices. The fair value of long-term debt is determined using recent quoted market prices or dealer quotes for each of the Company’s instruments, which are Level 1 inputs. The fair value of the Company’s debt instruments was approximately $1.0 billion and $1.3 billion, as of June 30, 2022 and December 31, 2021, respectively (see Note 8 - Debt). The Retained Consensus Shares are equity securities for which the Company elected the fair value option, and the fair value of the Retained Consensus Shares and subsequent fair value changes are included in our assets of and results from continuing operations, respectively. As of June 30, 2022 and December 31, 2021, the Company’s investment in Consensus common stock was remeasured at fair value based on Consensus’ closing stock price with a balance of $72.5 million and $229.2 million included on the Condensed Consolidated Balance Sheets, respectively. Unrealized loss of $27.3 million and $18.4 million were recorded on the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2022, respectively. The fair value of the investment in Consensus is determined using quoted market prices, which is a Level 1 input. The fair value of our 4.625% Senior Notes (as defined in Note 8 - Debt) was determined using quoted market prices or dealer quotes for instruments with similar maturities and other terms and credit ratings, which are Level 1 inputs. The fair value of the Credit Facility (as defined in Note 8 - Debt) approximated its carrying amount due to its variable interest rate, which approximated a market interest rate, and was considered a Level 2 input. The investment in corporate debt securities is measured at fair value on our Condensed Consolidated Balance Sheets. Unrealized gains and losses are reported in other comprehensive income until realized. Corporate debt securities do not have a readily determinable fair value because acquired securities are privately held, not traded on any public exchanges and not an investment in a mutual fund or similar investment. The investment in corporate debt securities is classified as available-for-sale and is initially measured at its transaction price. The fair value of the corporate debt securities is determined primarily based in significant estimates and assumptions, including Level 3 inputs. As of June 30, 2022, the fair value of our investment in corporate debt securities approximates its carrying value due to close proximity of the date of the investment to the reporting date. Refer to Note 4 - Investments for additional information. The Company classifies its contingent consideration liability in connection with acquisitions within Level 3 because factors used to develop the estimated fair value are unobservable inputs, such as volatility and market risks, and are not supported by market activity. The valuation approaches used to value Level 3 investments considers unobservable inputs in the market such as time to liquidity, volatility, dividend yield, and breakpoints. Significant increases or decreases in either of the inputs in isolation would result in a significantly lower or higher fair value measurement. The following table presents the fair values, valuation techniques, unobservable inputs, and ranges of the Company’s financial liabilities categorized within Level 3. The weighted averages below are a product of the unobservable input and fair value of the contingent consideration arrangement as of June 30, 2022.
|  | Valuation Technique |  | Unobservable Input |  | Range |  | Weighted Average
Contingent Consideration |  | Option-Based Model |  | Risk free rate |  | N/A |  | 1.9 | %
|  |  |  | Debt spread |  | 1.3% - 16.4% |  | 9.4 | %
|  |  |  | Present value factor |  | N/A |  | 26.9 | %
|  |  |  | Discount rate |  | N/A |  | 27.3 | %
The following tables present the fair values of the Company’s financial assets or liabilities (in thousands):
June 30, 2022 | Level 1 |  | Level 2 |  | Level 3 |  | Fair Value |  | Carrying Value
Assets: |  |  |  |  |  |  |  |  |
Cash equivalents: |  |  |  |  |  |  |  |  |
Money market and other funds | $ | 98,920 |  |  | $ | — |  |  | $ | — |  |  | $ | 98,920 |  |  | $ | 98,920 |
Investment in corporate debt securities | — |  |  | — |  |  | 15,000 |  |  | 15,000 |  |  | 15,000 |
Investment in Consensus | 72,535 |  |  | — |  |  | — |  |  | 72,535 |  |  | 72,535 |
Total assets measured at fair value | $ | 171,455 |  |  | $ | — |  |  | $ | 15,000 |  |  | $ | 186,455 |  |  | $ | 186,455 |
Liabilities: |  |  |  |  |  |  |  |  |
Contingent consideration | $ | — |  |  | $ | — |  |  | $ | 3,047 |  |  | $ | 3,047 |  |  | $ | 3,047 |
Debt | 1,015,010 |  |  | — |  |  | — |  |  | 1,015,010 |  |  | 1,102,201 |
Total liabilities measured at fair value | $ | 1,015,010 |  |  | $ | — |  |  | $ | 3,047 |  |  | $ | 1,018,057 |  |  | $ | 1,105,248 |
December 31, 2021 | Level 1 |  | Level 2 |  | Level 3 |  | Fair Value |  | Carrying Value
Assets: |  |  |  |  |  |  |  |  |
Cash equivalents: |  |  |  |  |  |  |  |  |
Money market and other funds | $ | 144,255 |  |  | $ | — |  |  | $ | — |  |  | $ | 144,255 |  |  | $ | 144,255 |
Investment in Consensus | 229,200 |  |  | — |  |  | — |  |  | 229,200 |  |  | 229,200 |
Total assets measured at fair value | $ | 373,455 |  |  | $ | — |  |  | $ | — |  |  | $ | 373,455 |  |  | $ | 373,455 |
Liabilities: |  |  |  |  |  |  |  |  |
Contingent consideration | $ | — |  |  | $ | — |  |  | $ | 5,775 |  |  | $ | 5,775 |  |  | $ | 5,775 |
Debt | 1,345,311 |  |  | — |  |  | — |  |  | 1,345,311 |  |  | 1,090,627 |
Total liabilities measured at fair value | $ | 1,345,311 |  |  | $ | — |  |  | $ | 5,775 |  |  | $ | 1,351,086 |  |  | $ | 1,096,402 |
At the end of each reporting period, management reviews the inputs to the fair value measurements of financial and non-financial assets and liabilities to determine when transfers between levels are deemed to have occurred. For the six months ended June 30, 2022 and 2021, there were no transfers that occurred between levels. The following table presents a reconciliation of the Company’s Level 3 financial assets related to our investment in corporate debt securities that are measured at fair value on a recurring basis (in thousands):
| Level 3 |  | Affected line item in the Statement of Operations
Balance as of January 1, 2022 | $ | — |  |  |
Investment in corporate debt securities | 15,000 |  |  | Not applicable
Balance as of June 30, 2022 | $ | 15,000 |  |  |
The following table presents a reconciliation of the Company’s Level 3 financial liabilities related to contingent consideration that are measured at fair value on a recurring basis (in thousands):
| Level 3 |  | Affected line item in the Statement of Operations
Balance as of January 1, 2022 | $ | 5,775 |  |  |
Contingent consideration | 200 |  |  |
Total fair value adjustments reported in earnings | (9) |  |  | General and administrative
Contingent consideration payments | (2,919) |  |  | Not applicable
Balance as of June 30, 2022 | $ | 3,047 |  |  |
In connection with the Company’s other acquisition activity, contingent consideration of up to $3.0 million ma y be payable upon achieving certain future earnings before interest, taxes, depreciation and amortization (EBITDA), revenue, and/or unique visitor thresholds and had a combined fair value of $3.0 million and $5.8 million at June 30, 2022 and December 31, 2021, respectively. Due to the achievement of certain thresholds,$2.9 million and $5.8 million was paid during the six months ended June 30, 2022 and 2021, respectively.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI https://asc.fasb.org/extlink&oid=126976982&loc=d3e19207-110258 + Details
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