Fair Value Measurements

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

NOTE 17 — Fair Value Measurements

The table below summarizes our financial assets and liabilities that were measured at fair value on a recurring basis at September 30, 2023:

	Asset (Liability) Carrying Value at September 30, 2023			Quoted Prices in Active Markets for Identical (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Interest rate swaps	$	3,276		$	—	$	3,276		$	—
Foreign currency hedges	$	1,295		$	—	$	1,295		$	—
Cross-currency swap	$	(17	)	$	—	$	(17	)	$	—
Qualified replacement plan assets	$	13,775		$	13,775	$	—		$	—
Contingent consideration	$	(3,564	)	$	—	$	—		$	(3,564	)

The table below summarizes the financial assets and liabilities that were measured at fair value on a recurring basis as of December 31, 2022:

	Asset (Liability) Carrying Value at December 31, 2022			Quoted Prices in Active Markets for Identical (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Interest rate swaps	$	2,995		$	—	$	2,995		$	—
Foreign currency hedges	$	945		$	—	$	945		$	—
Cross-currency swap	$	(357	)	$	—	$	(357	)	$	—
Qualified replacement plan assets	$	15,249		$	15,249	$	—		$	—

We use interest rate swaps to convert a portion of our Revolving Credit Facility’s outstanding balance from a variable rate of interest into a fixed rate and foreign currency forward contracts to hedge the effect of foreign currency changes on certain revenues and costs denominated in foreign currencies. The Company entered into a cross-currency swap agreement in order to manage its exposure to changes in interest rates related to foreign debt. These derivative financial instruments are measured at fair value on a recurring basis. The fair value of our interest rate swaps and foreign currency hedges were measured using standard valuation models using market-based observable inputs over the contractual terms, including forward yield curves, among others. There is a readily determinable market for these derivative instruments, but that market is not active and therefore they are classified within Level 2 of the fair value hierarchy.

The fair value of the contingent consideration requires significant judgment. The Company's fair value estimates used in the contingent consideration valuation are considered Level 3 fair value measurements. The fair value estimates were based on assumptions management believes to be reasonable, but that are inherently uncertain, including estimates of future revenues and timing of events and activities that are expected to take place. Refer to Note 3 “Business Acquisitions” for further discussion on contingent consideration.

A roll-forward of the contingent consideration is as follows:

	Contingent Consideration
Balance at December 31, 2022	$	—
Acquisition date fair value of contingent consideration		3,564
Balance at September 30, 2023	$	3,564

As of September 30, 2023, approximately $1,424 of contingent consideration was recorded in accrued expenses and other liabilities with the remainder in other long-term obligations.

Our long-term debt consists of the Revolving Credit Facility, which is recorded at its carrying value. There is a readily determinable market for our long-term debt and it is classified within Level 2 of the fair value hierarchy as the market is not deemed to be active. The fair value of long-term debt approximates its carrying value and was determined by valuing a similar hypothetical coupon bond and attributing that value to our long-term debt under the Revolving Credit Facility.

The qualified replacement plan assets consist of investment funds maintained for future contributions to the Company’s U.S. 401(k) program. The investments are Level 1 marketable securities and are recorded in Other Assets on our Condensed Consolidated Balance Sheets.