Fair Value Measurements

12 Months Ended

Dec. 31, 2022

11. FAIR VALUE MEASUREMENTS

ASC 820, “Fair Value Measurements and Disclosures”, defines and establishes a framework for measuring fair value and expands disclosures about fair value measurements. In accordance with ASC 820, the Company has categorized its financial assets and liabilities, based on the priority of the inputs to the valuation technique, into a three-level fair value hierarchy as set forth below.

Level 1 – Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that the company has the ability to access at the measurement date.

Level 2 – Assets and liabilities whose values are based on quoted prices for similar attributes in active markets; quoted prices in markets where trading occurs infrequently; and inputs other than quoted prices that are observable, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3 – Assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.

If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring and nonrecurring basis in the consolidated balance sheets (in millions):


	December 31, 2022
	Total Fair Value and Carrying Value on Balance Sheet		Fair Value Measurement Category
Recurring fair value measurements			Level 1		Level 2		Level 3			Total Gains (Losses)
Assets:
Money market account	$	1.4	$	1.4	$	—	$	—
Corporate bonds and notes	$	44.5			$	44.5	$

Liabilities:
Contingent consideration	$	63.8	$	—		—	$	63.8

Nonrecurring fair value measurements:
FCC licenses	$	24.5		—		—	$	24.5	$	(1.6	)


	December 31, 2021
	Total Fair Value and Carrying Value on Balance Sheet		Fair Value Measurement Category
Recurring fair value measurements			Level 1		Level 2		Level 3			Total Gains (Losses)
Assets:
Money market account	$	88.3	$	88.3	$	—	$	—

Liabilities:
Contingent consideration	$	114.9	$	—		—	$	114.9

Nonrecurring fair value measurements:
FCC licenses	$	0.7		—		—	$	0.7	$	(0.1	)

The Company held investments in a money market fund, corporate bonds and notes. The majority of the carrying value of the corporate bonds and asset-backed securities held by the Company are investment grade.

The Company’s money market account is comprised of cash and cash equivalents.

The Company’s available for sale debt securities are comprised of corporate bonds and notes. These securities are valued using quoted prices for similar attributes in active markets (Level 2). Since these investments are classified as available for sale, they are recorded at their fair market value within Cash and cash equivalents and Marketable securities in the Consolidated Balance Sheets and their unrealized gains or losses are included in other comprehensive income. Realized gains and losses from the sale of available for sale securities are included in the Statements of Operations and were determined on a specific identification basis.

As of December 31, 2022, the following table summarizes the amortized cost and the unrealized (gains) losses of the available for sale securities (in thousands):



	Corporate Bonds and Notes
	Amortized Cost		Unrealized gains (losses)
Due within a year	$	20,802	$	(122	)
Due after one year		24,560		(712	)
Total	$	45,362	$	(834	)

The Company’s available for sale debt securities are considered for credit losses under the guidance of Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses (Topic 326). As of December 31, 2022 and December 31, 2021, the Company determined that a credit loss allowance is not required.

Included in interest income for the years ended December 31, 2022, 2021 and 2020 was interest income related to the Company’s available for sale securities of $2.1 million, 0.2 million and $1.7 million, respectively.

The fair value of the contingent consideration is related to the acquisitions of:

•

the remaining 49% of the issued and outstanding shares of stock of a digital advertising solutions company that, together with its subsidiaries, does business under the name Cisneros Interactive;

•

100% of the issued and outstanding shares of stock of a digital advertising solutions company in Southeast Asia that, together with its subsidiaries, does business under the name MediaDonuts ; and

•

100% of the issued and outstanding shares of stock of a digital advertising solutions company headquartered in South Africa, that, together with its subsidiaries, does business under the name 365 Digital.

The fair value of the contingent consideration was estimated by applying the real options approach using level 3 inputs as further discussed in Note 3. The following table presents the changes in the contingent consideration (in millions):


	Years Ended December 31,
	2022			2021
Beginning balance	$	114.9		$	-
Additions from acquisitions					106.7
Payments to sellers		(65.3	)		-
(Gain) loss recognized in earnings		14.2			8.2
Ending balance	$	63.8		$	114.9