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Fair Value of Financial Instruments | 12 Months Ended
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Dec. 31, 2020
Fair Value Disclosures [Abstract] |
Fair Value of Financial Instruments | 9. Fair Value of Financial Instruments The Company measures fair value based on the prices that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are based on a three-tier hierarchy that prioritizes the inputs used to measure fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions. As of December 31, 2020, and 2019, the Company’s interest rate derivatives and forward contracts are Level 2 assets and liabilities with the related fair values based on third-party pricing service models. These models use discounted cash flows that utilize market-based forward swap curves commensurate with the terms of the underlying instruments. As of December 31, 2020, and 2019, the contingent consideration assets and liabilities are Level 3 assets and liabilities with the related fair values based on the significant unobservable inputs and probability weightings in using the income approach. The following table sets forth the Company’s financial assets and liabilities measured on a recurring basis at fair value, categorized by input level within the fair value hierarchy. The carrying amounts of “Cash and cash equivalents”, “Accounts receivable”, and “Accounts payable” approximate fair value due to the short-term maturities of these financial instruments in the Consolidated Balance Sheets.
|  | December 31, 2020 |
(in thousands) |  | Fair Value |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
Assets measured at fair value |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 204,301 |  |  | $ | 204,301 |  |  | $ | — |  |  | $ | — |
Derivative financial instruments |  |  | 1,824 |  |  |  | — |  |  |  | 1,824 |  |  |  | — |
Total assets measured at fair value |  | $ | 206,125 |  |  | $ | 204,301 |  |  | $ | 1,824 |  |  | $ | — |
Liabilities measured at fair value |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivative financial instruments |  | $ | 1,882 |  |  | $ | — |  |  | $ | 1,882 |  |  | $ | — |
Contingent consideration liabilities |  |  | 45,901 |  |  |  | — |  |  |  | — |  |  |  | 45,901 |
Total liabilities measured at fair value |  | $ | 47,783 |  |  | $ | — |  |  | $ | 1,882 |  |  | $ | 45,901 |
|  | December 31, 2019 |
(in thousands) |  | Fair Value |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
Assets measured at fair value |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 184,224 |  |  | $ | 184,224 |  |  | $ | — |  |  | $ | — |
Contingent consideration receivable |  |  | 6,120 |  |  |  | — |  |  |  | — |  |  |  | 6,120 |
Total assets measured at fair value |  | $ | 190,344 |  |  | $ | 184,224 |  |  | $ | — |  |  | $ | 6,120 |
Liabilities measured at fair value |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivative financial instruments |  | $ | 3,277 |  |  | $ | — |  |  | $ | 3,277 |  |  | $ | — |
Contingent consideration liabilities |  |  | 47,649 |  |  |  | — |  |  |  | — |  |  |  | 47,649 |
Total liabilities measured at fair value |  | $ | 50,926 |  |  | $ | — |  |  | $ | 3,277 |  |  | $ | 47,649 |
Interest Rate Cap Agreements As of December 31, 2020, and 2019, the Company had interest rate cap contracts with an aggregate notional value of principals of $2.2 billion and $1.5 billion, respectively, from various financial institutions to manage the Company’s exposure to interest rate movements on variable rate credit facilities. As of December 31, 2020, the aggregate fair value of the Company’s outstanding interest rate caps represented an outstanding net asset of $1.8 million and an outstanding net liability of $1.9 million. As of December 31, 2019, the aggregate fair value of the Company’s outstanding interest rate caps represented an outstanding net liability of $3.3 million. As of December 31, 2020, $1.8 million, $1.0 million, and $0.9 million of the Company’s fair value of outstanding interest rate caps were included in “Prepaid expenses and other current assets “, “Other accrued expenses”, and “Other long-term liabilities” in the Consolidated Balance Sheets, respectively, with changes in fair value recognized as a component of “Interest expense, net” in the Consolidated Statements of Operations and Comprehensive Loss. As of December 31, 2019, $1.0 million and $2.3 million of the Company’s fair value of outstanding interest rate caps were included in “Other accrued expenses” and “Other long-term liabilities” in the Consolidated Balance Sheets, respectively, with changes in fair value recognized as a component of “Interest expense, net” in the Consolidated Statements of Operations and Comprehensive Loss. During the years ended December 31, 2020, 2019, and 2018, the Company recorded interest expense in the amount of $0.4 million, $2.7 million, and $3.9 million, respectively, related to changes in the fair value of its derivative instruments, respectively. Forward Contracts During the year s ended December 31, 2020, 2019, and 2018, the Company recognized a gain of $0.5 million, a loss of $0.4 million, and a loss of $1.0 million, respectively, related to changes in fair values of the forward contracts as a component of “Selling, general and administrative expenses” in the Consolidated Statements of Operations and Comprehensive Loss. Contingent Consideration Receivable Each reporting period, the Company measures the fair value of its contingent receivable by evaluating the significant unobservable inputs and probability weightings using Monte Carlo simulations. Any resulting decreases or increases in the fair value result in a corresponding gain or loss reported in “Selling, general, and administrative expenses” in the Consolidated Statements of Operations and Comprehensive Loss. The Company has reassessed the fair value of contingent consideration, noting that as of December 31, 2020, projected EBITDA related to acquisitions, which was anticipated to contribute to measurement period EBITDA, was lower than expected. This reassessment resulted in a fair value adjustment of a $6.1 million loss that was included in “Selling, general, and administrative expenses” in the Consolidated Statements of Operations and Comprehensive Loss. Long-term Debt The following table sets forth the carrying values and fair values of the Company’s financial liabilities measured on a recurring basis, categorized by input level within the fair value hierarchy:
(in thousands) |  | Carrying Value |  |  | Fair Value (Level 2) |
Balance at December 31, 2020 |  |  |  |  |  |  |  |
New Term Loan Credit Facility |  | $ | 1,325,000 |  |  | $ | 1,447,993 |
Notes |  |  | 775,000 |  |  |  | 884,826 |
New Revolving Credit Facility |  |  | 50,000 |  |  |  | 50,000 |
Notes payable and deferred obligations |  |  | 3,618 |  |  |  | 3,618 |
Total long-term debt |  | $ | 2,153,618 |  |  | $ | 2,386,437 |
(in thousands) |  | Carrying Value |  |  | Fair Value (Level 2) |
Balance at December 31, 2019 |  |  |  |  |  |  |  |
First Lien Term Loan |  | $ | 2,467,529 |  |  | $ | 2,413,663 |
Second Lien Term Loan |  |  | 760,000 |  |  |  | 733,526 |
Notes payable and deferred obligations |  |  | 2,053 |  |  |  | 1,872 |
Total long-term debt |  | $ | 3,229,582 |  |  | $ | 3,149,061 |

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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 http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258 + Details
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