Tax Receivable Agreement

On January 26, 2018, the Company entered into an agreement to terminate all future payments payable under the Tax Receivable Agreement to the Apollo Funds in exchange for a payment of $34.0 million (the “Buyout”). Subsequent to the Buyout, the Company will retain a greater portion of the future cash tax savings subject to the Tax Receivable Agreement. The Buyout did not affect the portion of the rights under the Tax Receivable Agreement payable to CDM Holders, including those previously assigned by the Apollo Funds. If the Company enters into a definitive agreement on or before January 26, 2019 and that agreement results in a change in control (as defined in the Tax Receivable Agreement), the Company would be required to make an additional payment of $10.0 million to the Apollo Funds. As of March 31, 2018, no amounts have been paid and there are no amounts reflected in the consolidated financial statements related to the change in control provision, based on the management’s estimate of the fair value of the potential obligation.

Significant inputs used to estimate the future expected payments under the Tax Receivable Agreement include a cash tax savings rate of approximately 27.5%.

The following table summarizes activity related to the Tax Receivable Agreement for the three months ended March 31, 2018:



(In thousands)
Balance December 31, 2017	$	124,360
Exchange of Class B units for Class A shares	400
Reduction of future payments due to the Buyout	(46,371		)
Balance March 31, 2018	$	78,389

During the three months ended March 31, 2018, the Company recognized a gain of $12.4 million related to the Buyout.

As of March 31, 2018 the future expected payments under the Tax Receivable Agreement are as follows:



(In thousands)
Remainder of 2018	$	8,100
2019	4,400
2020	4,300
2021	4,300
2022	4,300
Thereafter	52,989