Fair Value Measurements

6 Months Ended

Jun. 30, 2021

Note 14. Fair Value Measurements

The COVID-19 pandemic has created uncertainties surrounding the global economy and financial markets. As a result, the full magnitude of the pandemic and the ultimate effect upon the future of our fair value measurements are uncertain at this time. Any changes in fair value for financial instruments marked to fair value will have a direct impact to our financial statements, except for net changes in our investments held in grantor trust and its related obligations. Additionally, changes in fair values for financial instruments not marked to fair value will not have an impact to our financial statements unless plans change to sell or settle the instrument prior to its maturity.

Recurring Fair Value Measurements:

Assets and liabilities measured at fair value on a recurring basis as of June 30, 2021 and December 31, 2020, aggregated by the level in the fair value hierarchy in which those measurements fall, are as follows (in thousands):


	Quoted Prices
	in Active
	Markets for		Significant
	Identical		Other		Significant
	Assets		Observable		Unobservable		Fair Value at
	and Liabilities		Inputs		Inputs		June 30,
	(Level 1)		(Level 2)		(Level 3)		2021
Assets:
Cash equivalents, primarily money market funds ⁽¹⁾	$	46					$	46
Restricted cash, primarily money market funds ⁽¹⁾		9,095						9,095
Investments, mutual funds held in a grantor trust ^{(1) (2)}		47,310						47,310
Total	$	56,451	$	—	$	—	$	56,451
Liabilities:
Deferred compensation plan obligations ⁽²⁾	$	47,310					$	47,310
Total	$	47,310	$	—	$	—	$	47,310

(1)	For the three and six months ended June 30, 2021, a net gain of $2.8 million and $3.9 million was included in Interest and Other (Expense) Income, net, of which $2.5 million and $3.6 million represented an unrealized gain, respectively.

(2)	See Note 11 for additional information.


	Quoted Prices
	in Active
	Markets for		Significant
	Identical		Other		Significant
	Assets		Observable		Unobservable		Fair Value at
	and Liabilities		Inputs		Inputs		December 31,
	(Level 1)		(Level 2)		(Level 3)		2020
Assets:
Cash equivalents, primarily money market funds ⁽¹⁾	$	155					$	155
Restricted cash, primarily money market funds ⁽¹⁾		10,144						10,144
Investments, mutual funds held in a grantor trust ⁽¹⁾		43,412						43,412
Total	$	53,711	$	—	$	—	$	53,711
Liabilities:
Deferred compensation plan obligations	$	43,412					$	43,412
Total	$	43,412	$	—	$	—	$	43,412

(1)

For the year ended December 31, 2020, a net gain of $5.1 million was included in Interest and Other Income, net, of which $3.7 million represented an unrealized gain. Included in these amounts for the three and six months ended June 30, 2020 was a net gain of $5.1 million and a net loss of $(.9) million, respectively, of which $4.4 million and $(1.9) million represented an unrealized gain (loss), respectively.

Nonrecurring Fair Value Measurements:

Property Impairments

Property, including right-of-use assets, is reviewed for impairment if events or changes in circumstances indicate that the carrying amount of the property, including any identifiable intangible assets, site costs and capitalized interest, may not be recoverable. In such an event, a comparison is made of the current and projected operating cash flows of each such property into the foreseeable future on an undiscounted basis to the carrying amount of such property. If we conclude that an impairment may have occurred, estimated fair values are determined by management utilizing cash flow models, market capitalization rates and market discount rates, or by obtaining third-party broker valuation estimates, appraisals, bona fide purchase offers or the expected sales price of an executed sales agreement in accordance with our fair value measurements accounting policy. Market capitalization rates and market discount rates are determined by reviewing current sales of similar properties and transactions, and utilizing management’s knowledge and expertise in property marketing.

No assets were measured at fair value on a nonrecurring basis at June 30, 2021. Assets measured at fair value on a nonrecurring basis at December 31, 2020 aggregated by the level in the fair value hierarchy in which those measurements fall, are as follows (in thousands):


	Quoted Prices in
	Active Markets for		Significant
	Identical		Other		Significant
	Assets		Observable		Unobservable
	and Liabilities		Inputs		Inputs				Total Gains
	(Level 1)		(Level 2)		(Level 3)		Fair Value		(Losses) ⁽¹⁾
Property⁽²⁾			$	47,746	$	—	$	47,746	$	(12,686)
Total	$	—	$	47,746	$	—	$	47,746	$	(12,686)

(1)	Total gains (losses) presented in this table relate to assets that were held by us at December 31, 2020.

(2)

In accordance with our policy of evaluating and recording impairments on the disposal of long-lived assets, property with a carrying amount $60.4 million was written down to a fair value of $47.7 million, resulting in a loss of $12.7 million, which was included in earnings for the fourth quarter of 2020. Management’s estimate of fair value of these properties were determined using bona fide purchase offers for the Level 2 inputs.

Fair Value Disclosures:

Unless otherwise described below, short-term financial instruments and receivables are carried at amounts, which approximate their fair values based on their highly-liquid nature, short-term maturities and/or expected interest rates for similar instruments.

Schedule of our fair value disclosures is as follows (in thousands):

June 30, 2021

December 31, 2020

Fair Value

Using

Fair Value

Using

Fair Value

Significant

Using

Significant

Using

Other

Significant

Other

Significant

Observable

Unobservable

Observable

Unobservable

Carrying

Inputs

Carrying

Inputs

Value

(Level 2)

(Level 3)

Value

(Level 2)

(Level 3)

Other Assets:

Tax increment revenue bonds

14,758

19,000

14,762

19,000

Debt:

Fixed-rate debt

1,782,960

1,889,306

1,798,419

1,905,306

Variable-rate debt

4,002

40,000

*****

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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