XML 33 R19.htm IDEA: XBRL DOCUMENT v3.20.4
FAIR VALUE MEASUREMENTS
 12 Months Ended
Dec. 31, 2020
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS
The carrying amounts of certain of the Company’s financial instruments including cash equivalents, accounts receivable, accounts payable, accrued liabilities, and derivative financial instruments approximate fair value due either to length of maturity or interest rates that approximate prevailing market rates.
Determining which category an asset or liability falls within the hierarchy requires significant judgment. We evaluate hierarchy disclosures each reporting period. The following table presents the derivative assets recorded that are reported at fair value on our Consolidated Balance Sheets on a recurring basis.
Derivative Assets and Liabilities Measured at Fair Value on a Recurring Basis
(In thousands)Level 1Level 2Level 3Total
Derivative Assets
December 31, 2020$— $762 $— $762 
December 31, 2019— 1,451 — 1,451 
Derivative Liabilities
December 31, 2020$— $18,717 $— $18,717 
December 31, 2019— 5,005 — 5,005 
Derivative Financial Instruments
Currently, we use interest rate swaps to manage our interest rate risk associated with our note payable. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves.
The fair values of interest rate options will be determined using the market standard methodology of discounting the future expected cash receipts that would occur if variable interest rates rise above the strike rate of the caps. The variable interest rates used in the calculation of projected receipts on the cap are based on an expectation of future interest rates derived from observable market interest rate curves and volatilities.
To comply with the provisions of ASC 820, we incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees.
Although we have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by ourselves and our counterparties. We have determined that the significance of the impact of the credit valuation adjustments made to our derivative contracts, which determination was based on the fair value of each individual contract, was not significant to the overall valuation. As a result, all of our derivatives held as of December 31, 2020 were classified as Level 2 of the fair value hierarchy.
The following table presents the carrying value and fair value of certain financial liabilities that are recorded on our Consolidated Balance Sheets.
Fair Value of Certain Financial Liabilities
December 31, 2020
(In thousands)Carrying ValueFair Value
Liabilities (1)
Term loan due 2022$150,000 $150,992 
Term loan due 2023150,000 150,980 
Term loan due 2024100,000 100,740 
Senior note due June 202450,000 55,802 
Senior note due June 202775,000 89,547 
Senior note due June 202650,000 58,694 
Senior note due June 202850,000 60,394 
Senior note due June 202950,000 54,995 
Senior note due April 203075,000 82,238 
Outstanding Revolver Borrowings10,000 10,069 
(1) Term loan and senior note liabilities exclude deferred financing costs
December 31, 2019
(In thousands)Carrying ValueFair Value
Liabilities (1)
Term loan due 2022$150,000 $150,834 
Term loan due 2023150,000 150,510 
Term loan due 2024100,000 100,352 
Senior note due June 202450,000 52,496 
Senior note due June 202775,000 81,176 
Senior note due June 202650,000 52,946 
Senior note due June 202850,000 53,902 
Outstanding Revolver Borrowings52,000 52,301 
(1) Term loan and senior note liabilities exclude deferred financing costs
The fair value of the Notes payable (Level 2) is determined using the present value of the contractual cash flows, discounted at the current market cost of debt.