Fair Value Measurement

9 Months Ended

Sep. 30, 2018

10. Fair Value Measurement

The following tables summarize significant assets and liabilities measured at fair value in the condensed consolidated balance sheets on a recurring basis for each of the fair value levels (in thousands):

	Fair Value Measurement at Reporting Date Using
September 30, 2018	Level 1		Level 2		Level 3		Total
Cash equivalents
Money market funds	$	68,765	$	—	$	—	$	68,765
Other noncurrent assets
Restricted cash		5,599		—		—		5,599
Total assets	$	74,364	$	—	$	—	$	74,364

December 31, 2017
Cash equivalents
Money market funds	$	37,284	$	—	$	—	$	37,284
Commercial paper		9,967		—		—		9,967
Total assets	$	47,251	$	—	$	—	$	47,251

September 30, 2017
Cash equivalents
Money market funds	$	22,896	$	—	$	—	$	22,896
Total assets	$	22,896	$	—	$	—	$	22,896

Interest Rate Swaps

In May 2018, we entered into the Third Amended and Restated Credit Agreement (as discussed further in Note 14), terminated the interest rate swap we entered into in January 2016 and entered into two new interest rate swaps designated as cash flow hedges with an effective date of May 2018. The two new cash flow hedges have a combined initial notional amount of $150.0 million and mature in May 2023. The interest rate swaps are designed to convert the interest rate on the term loan as discussed further in Note 14, from a variable interest rate of LIBOR plus an applicable margin to a fixed rate of 2.76% plus the same applicable margin. The interest rate swaps are reported at fair value in the condensed consolidated balance sheets using Level 2 inputs. As of September 30, 2018, December 31, 2017 and September 30, 2017, the fair values of the cash flow hedges were $1.5 million, $1.4 million and $0.8 million, respectively, all of which were included in other current assets in the condensed consolidated balance sheets. The unrealized gains and losses, net of taxes, on the effective portion reported as a component of accumulated other comprehensive income and the interest expense reclassified from accumulated other comprehensive income were both immaterial during the three and nine months ended September 30, 2018 and 2017.

Other Assets and Liabilities

The carrying values and estimated fair values of our financial instruments that are not required to be recorded at fair value in the condensed consolidated balance sheets were as follows:

		September 30, 2018				December 31, 2017				September 30, 2017
(in thousands)	Fair Value Hierarchy	Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value
Assets:
Held-to-maturity marketable securities	Level 1	$	81,103	$	79,941	$	132,790	$	132,002	$	117,805	$	117,349
Liabilities (including current maturities):
2019 Notes¹	Level 3	$	80,000	$	82,191	$	80,000	$	82,190	$	120,000	$	124,792
Credit Agreement - term loan¹	Level 3		148,125		148,832		90,000		89,871		91,250		91,078
Credit Agreement - revolving credit facility¹	Level 3		137,000		137,636		55,000		55,054		30,000		30,018
Convertible notes¹	Level 1		69,659		69,472		—		—		—		—

¹See Note 14 for definitions of, and more information about, the 2019 Notes, Credit Agreement and Convertible notes.

During the three and nine months ended September 30, 2018 and 2017, we did not record any fair value adjustments related to nonfinancial assets and liabilities measured at fair value on a nonrecurring basis. As of September 30, 2018, we recorded net assets held for sale at fair value less costs to sell using Level 3 inputs on our condensed consolidated balance sheets.

- 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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