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Fair Value of Financial Instruments
 12 Months Ended
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