In accordance with ASC 820, the Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. Observable inputs are from sources independent of the Company. Unobservable inputs reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances. These tiers include the following:

Level 3 — inputs include unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions

In determining fair value, the Company uses various valuation techniques and prioritizes the use of observable inputs. The availability of observable inputs varies from instrument to instrument and depends on a variety of factors including the type of instrument, whether the instrument is actively traded, and other characteristics particular to the instrument. For many financial instruments, pricing inputs are readily observable in the market, the valuation methodology used is widely accepted by market participants, and the valuation does not require significant management judgment. For other financial instruments, pricing inputs are less observable in the marketplace and may require management judgment.


		As of September 30, 2022
	Balance Sheet Location	Total		Quoted prices in active markets for identical assets (Level 1)		Other observable inputs (Level 2)		Unobservable inputs (Level 3)
Assets:
Interest rate swaps	Other current assets	$	30.7	$	—	$	30.7	$	—
Interest rate swaps	Other noncurrent assets	85.1		—		85.1		—
Total assets		$	115.8	$	—	$	115.8	$	—

Liabilities:

Private warrants	Warrant liabilities	$	25.6	$	—	$	25.6	$	—
Total liabilities		$	25.6	$	—	$	25.6	$	—


		As of December 31, 2021
	Balance Sheet Location	Total		Quoted prices in active markets for identical assets (Level 1)		Other observable inputs (Level 2)		Unobservable inputs (Level 3)
Assets:
Interest rate swaps	Other noncurrent assets	$	16.1	$	—	$	16.1	$	—
Total assets		$	16.1	$	—	$	16.1	$	—

Liabilities:
Interest rate swaps	Accrued expenses and other liabilities	$	7.4	$	—	$	7.4	$	—
Contingent consideration	Accrued expenses and other liabilities	3.7		—		—		3.7
Private warrants	Warrant liabilities	149.6		—		149.6		—
Total liabilities		$	160.7	$	—	$	157.0	$	3.7

Interest rate swaps — From time to time the Company may enter into derivative financial instruments designed to hedge the variability in interest expense on floating rate debt. Derivatives are recognized as assets or liabilities in the Unaudited Condensed Consolidated Balance Sheets at their fair value. When the derivative instrument qualifies as a cash flow hedge, changes in the fair value are deferred through other comprehensive income, depending on the nature and effectiveness of the offset.

The Company uses interest rate swaps to manage the interest rate mix of the Company’s total debt portfolio and related overall cost of borrowing. At September 30, 2022 and December 31, 2021, interest rate swap agreements designated as cash flow hedges effectively swapped a notional amount of $1,000.0 of LIBOR based floating rate debt for fixed rate debt. The Company’s interest rate swaps mature in March 2027. During the three and nine months ended September 30, 2022 and 2021, the Company recognized $(1.6), $2.7, $2.7, and $7.9 respectively, within “Other operating expense (income)” on the Unaudited Condensed Consolidated Statements of Earnings (Loss).

At September 30, 2022, the Company expects that approximately $30.7 of pre-tax net gains on cash flow hedges will be reclassified from accumulated other comprehensive income (loss) into earnings during the next twelve months.

The interest rate swaps are valued using the LIBOR yield curves at the reporting date. Counterparties to these contracts are highly rated financial institutions. The fair values of the Company’s interest rate swaps are adjusted for nonperformance risk and creditworthiness of the counterparty through the Company’s credit valuation adjustment (“CVA”). The CVA is calculated at the counterparty level utilizing the fair value exposure at each payment date and applying a weighted probability of the appropriate survival and marginal default percentages.

Net investment hedge — From time to time the Company designates certain intercompany debt to hedge a portion of its investment in foreign subsidiaries and affiliates. The net impact of translation adjustments from these hedges was $13.6 for both the three and nine months ended September 30, 2022 and are included in “Foreign currency translation” in the Unaudited Condensed Consolidated Statement of Other Comprehensive Income (Loss). As of September 30, 2022, approximately $205.9 of the Company’s intercompany debt was designated to hedge investments in certain foreign subsidiaries and affiliates.

Private warrants — the fair value of the private warrants is considered a Level 2 valuation and is determined using the Black-Sholes-Merton valuation model.


Warrant valuation inputs	September 30, 2022			December 31, 2021
Stock price	$	9.72		$	24.97
Strike price	$	11.50		$	11.50
Remaining life	2.35			3.10
Volatility	46.0		%	34.2		%
Interest rate (1)	4.23		%	0.98		%
Dividend yield (2)	0.10		%	0.04		%

The Company determines the fair value of debt using Level 2 inputs based on quoted market prices. The following table presents the estimated fair value and carrying value of long-term debt, including the current portion of long-term debt as of September 30, 2022 and December 31, 2021.


	September 30, 2022				December 31, 2021
	Fair Value		Par Value (1)		Fair Value		Par Value (1)
Term Loan due 2027	$	2,053.9	$	2,150.7	$	2,148.2	$	2,161.7
Senior Secured Notes due 2028	683.3		850.0		853.2		850.0
ABL Revolving Credit Facility due 2025	280.0		280.0		—		—