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Fair Value Measurement
12 Months Ended
Dec. 31, 2019
Fair Value Disclosures [Abstract]  
Fair Value Measurement Fair Value Measurement
ASC Topic 820, Fair Value Measurements and Disclosures, requires that the Company disclose estimated fair values for its financial instruments. The estimated fair value of a financial instrument is the amount 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 in the principal or most advantageous market for the asset or liability. Fair value estimates are made at a specific point in time and are based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company's entire holdings of a particular financial instrument. Changes in assumptions could significantly affect these estimates. Because the fair value is estimated as of December 31, 2019 and 2018, the amounts that will actually be realized or paid at settlement or maturity of the instruments in the future could be significantly different.
The estimated fair values of the Company's financial instruments represent management's best estimates of the amounts that would be received to sell those assets or that would be paid to transfer those liabilities in an orderly transaction between market participants at that date. The estimated fair value measurements maximize the use of observable inputs. However, in situations where there is little, if any, market activity for the asset or liability at the measurement date, the estimated fair value measurement reflects the Company's own judgments about the assumptions that market participants would use in pricing the asset or liability. These judgments are developed by the Company based on the best information available under the circumstances.
The following summary presents a description of the methods and assumptions used to estimate the fair value of each class of financial instrument.
Restricted Investments, Held-to-Maturity — The estimated fair value of the Company's restricted investments is based on quoted prices in active markets that are readily and regularly obtainable. See Note 6 for additional investments disclosures regarding restricted investments, held-to-maturity.
Transportation Resource Partners — The estimated fair value of the Company's investments with Transportation Resource Partners are privately negotiated equity investments. The carrying amount of these investments approximates the fair value.
Equity Securities — The estimated fair value of the Company's investments in equity securities is based on quoted prices in active markets that are readily and regularly obtainable.
Debt Instruments and Leases — For notes payable under the Revolver and the Term Loan, fair value approximates the carrying value due to the variable interest rate. The carrying value of the 2018 RSA approximates fair value, as the underlying receivables are short-term in nature and only eligible receivables (such as those with high credit ratings) are qualified to secure the borrowed amounts. For finance and operating leases, the carrying value approximates the fair value, as the Company's finance and operating leases are structured to amortize in a manner similar to the depreciation of the underlying assets.
Other — Cash and cash equivalents, restricted cash, net accounts receivable, income tax refund receivable, and accounts payable represent financial instruments for which the carrying amount approximates fair value, as they are short-term in nature. These instruments are accordingly excluded from the disclosures below. All remaining balance sheet amounts excluded from the below are not considered financial instruments, subject to this disclosure.
Fair Value Hierarchy — ASC Topic 820 establishes a framework for measuring fair value in accordance with GAAP and expands financial statement disclosure requirements for fair value measurements. ASC Topic 820 further specifies a hierarchy of valuation techniques, which is based on whether the inputs into the valuation technique are observable or unobservable. The hierarchy follows:
Level 1 — Valuation techniques in which all significant inputs are quoted prices from active markets for assets or liabilities that are identical to the assets or liabilities being measured.
Level 2 — Valuation techniques in which significant inputs include quoted prices from active markets for assets or liabilities that are similar to the assets or liabilities being measured and/or quoted prices from markets that are not active for assets or liabilities that are identical or similar to the assets or liabilities being measured. Also, model-
derived valuations in which all significant inputs and significant value drivers are observable in active markets are Level 2 valuation techniques.
Level 3 Valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are valuation technique inputs that reflect the Company's own assumptions about the assumptions that market participants would use in pricing an asset or liability.
The following table presents the carrying amounts and estimated fair values of the Company's major categories of financial assets and liabilities: 
 
December 31, 2019
 
December 31, 2018
 
Carrying
Value
 
Estimated
Fair Value
 
Carrying
Value
 
Estimated
Fair Value
 
(In thousands)
Financial Assets:
 
 
 
 
 
 
 
Restricted investments, held-to-maturity ¹
$
8,912

 
$
8,915

 
$
17,413

 
$
17,398

TRP Investments
30,878

 
30,878

 
20,646

 
20,646

Investments in equity securities ²
8,722

 
8,722

 

 

 
 
 
 
 
 
 
 
Financial Liabilities:
 
 
 
 
 
 
 
Term Loan, due October 2020 ³
$
364,825

 
$
365,000

 
$
364,590

 
$
365,000

2018 RSA, due July 2021 4
204,762

 
205,000

 
239,606

 
240,000

Revolver, due October 2022
279,000

 
279,000

 
195,000

 
195,000

 
 
 
 
 
 
 
 
1
Refer to Note 6 for the differences between the carrying amounts and estimated fair values of the Company's restricted investments, held-to-maturity.
2
The investments are carried at fair value and are included in "Other long-term assets" on the consolidated balance sheets.
3
The carrying amount of the Term Loan is included in "Finance lease liabilities and long-term debt – current portion" and is net of $0.2 million of deferred loan costs as of December 31, 2019. The carrying amount of the Term Loan is included in "Long-term debt – less current portion" and is net of $0.4 million of deferred loan costs as of December 31, 2018.
4
The carrying amount of the 2018 RSA is included in "Accounts receivable securitization," and is net of $0.2 million and $0.4 million in deferred loan costs as of December 31, 2019 and December 31, 2018, respectively.
Recurring Fair Value Measurements (Assets) — The following table depicts the level in the fair value hierarchy of the inputs used to estimate fair value of assets measured on a recurring basis as of December 31, 2019 and 2018:
 
 
 
Fair Value Measurements at Reporting Date Using
 
 
 
Estimated Fair Value
 
Level 1 Inputs
 
Level 2 Inputs
 
Level 3 Inputs
 
Total Losses
 
(In thousands)
As of December 31, 2019
 
 
 
 
 
 
 
 
 
Investments in equity securities ¹
$
8,722

 
$
8,722

 
$

 
$

 
$
(184
)

1
Total unrealized losses for these investments are included within "Other income, net" within the consolidated statements of comprehensive income for 2019. The Company did not sell any equity investments during 2019 and therefore did not realize any losses on these investments.
As of December 31, 2018, there were no major categories of assets on the consolidated balance sheets estimated at fair value that were measured on a recurring basis.
Recurring Fair Value Measurements (Liabilities) — As of December 31, 2019 and 2018, there were no major categories of liabilities included in the Company's consolidated balance sheets at estimated fair value that were measured on a recurring basis.
Nonrecurring Fair Value Measurements (Assets) — The following table depicts the level in the fair value hierarchy of the inputs used to estimate fair value of assets measured on a nonrecurring basis as of December 31, 2019 and 2018:
 
 
 
Fair Value Measurements at Reporting Date Using
 
 
 
Estimated Fair Value
 
Level 1 Inputs
 
Level 2 Inputs
 
Level 3 Inputs
 
Total Losses
 
(In thousands)
As of December 31, 2019
 
 
 
 
 
 
 
 
 
Leasehold improvements ¹
$

 
$

 
$

 
$

 
$
(2,182
)
Equipment ²
1,380

 

 
1,380

 

 
(870
)
Software ³

 

 

 

 
(434
)
As of December 31, 2018
 
 
 
 
 
 
 
 
 
Software 4
$

 
$

 
$

 
$

 
$
(550
)
Equipment 5
2,800

 

 
2,800

 

 
(2,248
)

1
During the second quarter of 2019, the Company incurred an impairment of leasehold improvements related to the early termination of a lease on one of its operating properties. This impairment was recorded in the Trucking segment.
2
During the fourth quarter of 2019, the Company incurred impairment charges which were associated with certain revenue equipment technology, warehousing equipment no longer in use, and certain Swift legacy trailer models as a result of a softer used equipment market. These impairments were allocated between the Logistics and non-reportable segments based on each segment’s use of the assets.
3
During the fourth quarter of 2019, the Company incurred impairment charges related to discontinued use of software systems. These impairments were allocated between the Trucking and Logistics segments based on each segment’s use of the assets.
4
During the fourth quarter of 2018, the Company incurred impairment charges related to replaced software systems.
5
During the fourth quarter of 2018, the Company incurred impairment charges related to the Company airplane. This impairment was allocated between the Trucking and Logistics segments based on each segment’s use of the asset.
Nonrecurring Fair Value Measurements (Liabilities) — As of December 31, 2019 and 2018 there were no liabilities included in the Company's consolidated balance sheets at estimated fair value that were measured on a nonrecurring basis.