Fair Values of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2018

Deferred Compensation Plan Commodity Hedging Agreements and Acquisition Related Contingent Consideration

The following tables summarize, by assets and liabilities, the carrying amounts and fair values by level of the Company’s deferred compensation plan, commodity hedging agreements, debt and acquisition related contingent consideration:

	September 30, 2018
	Carrying		Total		Fair Value		Fair Value		Fair Value
(in thousands)	Amount		Fair Value		Level 1		Level 2		Level 3
Assets:
Deferred compensation plan assets	$	36,291	$	36,291	$	36,291	$	-	$	-
Commodity hedging agreements		1,281		1,281		-		1,281		-
Liabilities:
Deferred compensation plan liabilities		36,291		36,291		36,291		-		-
Non-public variable rate debt		462,031		462,500		-		462,500		-
Non-public fixed rate debt		274,697		256,200		-		256,200		-
Public debt securities		457,381		457,800		-		457,800		-
Acquisition related contingent consideration		363,836		363,836		-		-		363,836

	December 31, 2017
	Carrying		Total		Fair Value		Fair Value		Fair Value
(in thousands)	Amount		Fair Value		Level 1		Level 2		Level 3
Assets:
Deferred compensation plan assets	$	33,166	$	33,166	$	33,166	$	-	$	-
Commodity hedging agreements		4,420		4,420		-		4,420		-
Liabilities:
Deferred compensation plan liabilities		33,166		33,166		33,166		-		-
Non-public variable rate debt		506,398		507,000		-		507,000		-
Non-public fixed rate debt		124,829		126,400		-		126,400		-
Public debt securities		456,791		475,100		-		475,100		-
Acquisition related contingent consideration		381,291		381,291		-		-		381,291

Summary of Reconciliation of Acquisition Related Contingent Consideration

The acquisition related contingent consideration is the Company’s only Level 3 asset or liability. A reconciliation of the Level 3 activity is as follows:

	Third Quarter						First Three Quarters
(in thousands)	2018			2017			2018			2017
Beginning balance - Level 3 liability	$	374,537		$	319,102		$	381,291		$	253,437
Increase due to System Transformation Transactions acquisitions		-			-			-			46,086
Measurement period adjustments⁽¹⁾		(1,279	)		-			813			-
Payment of acquisition related contingent consideration		(7,049	)		(5,094	)		(18,312	)		(11,650	)
Reclassification to current payables		-			150			(1,540	)		(2,080	)
(Favorable)/unfavorable fair value adjustment		(2,373	)		(5,225	)		1,584			23,140
Ending balance - Level 3 liability	$	363,836		$	308,933		$	363,836		$	308,933

⁽¹⁾

Measurement period adjustments relate to post-closing adjustments made in relation to the April 2017 Transactions and the October 2017 Transactions in accordance with the terms and conditions of the applicable asset purchase agreement or asset exchange agreement. See Note 3 to the consolidated condensed financial statements for additional information on the System Transformation Transactions.