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Fair Value of Financial Instruments
 9 Months Ended
Sep. 30, 2021
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments Fair Value of Financial Instruments
Derivatives Not Designated As Hedging Instrument
On March 31, 2020, the Company entered into an interest rate swap with a notional amount of $200,000 and a ten‑year term to reduce the interest rate risk associated with the Company’s Credit Facility. The interest rate swap is not designated as a hedging instrument for accounting purposes. The Company accounts for the swap as either an asset or a liability in the consolidated balance sheets and carries the derivative at fair value.
The following is a summary of the interest rate swap activity and the location the activity is recognized in the consolidated statements of operations:
Three Months EndedNine Months Ended
September 30,September 30,Recognized in Consolidated
2021202020212020Statements of Operations
Interest rate swap:
Gain (loss) from change in fair value
$1,463 $809 $9,198 $(3,365)
Other (expense) income, net
Payments325 288 942 398 Interest expense, net
Fair Value
The Company applies the provisions of ASC Topic 820, Fair Value Measurement, for fair value measurements of financial assets and financial liabilities and for fair value measurements of non‑financial items that are recognized or disclosed at fair value in the consolidated financial statements.
The Company’s financial instruments include cash equivalents, account receivables, certain other assets, accounts payable, accruals, certain other current and long‑term liabilities, and long‑term debt.
The carrying values of the Company’s financial instruments excluding long‑term debt approximate their fair value due to the short‑term nature of those instruments. Additionally, as of December 31, 2020, the fair value of the Company’s borrowings under its Credit Facility approximated its carrying value based upon discounted cash flows at current market rates for instruments with similar remaining terms. The Company considers these valuation inputs to be Level 2 inputs in the fair value hierarchy. The estimated fair value of the 2026 Notes and 2027 Notes was $794,356 and $585,258, respectively, as of September 30, 2021 based on quoted market prices of the Company’s instrument in markets that are not active and are classified as Level 2 within the fair value hierarchy. Considerable judgment is necessary to interpret the market data and develop estimates of fair values. Accordingly, the estimates presented are not necessarily indicative of the amounts at which these instruments could be purchased, sold, or settled.
A financial asset or liability classification is determined based on the lowest level input that is significant to the fair value measurement. The fair value hierarchy consists of the following three levels:
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.
Level 3 inputs are unobservable inputs based on management’s own assumptions used to measure assets and liabilities at fair value.
The following tables provide the financial assets and financial liabilities carried at fair value measured on a recurring basis:
September 30, 2021Level 1Level 2Level 3Total
Assets:
Money market funds (1)
$21 $— $— $21 
Interest rate swap (2)
— 9,545 — 9,545 
Total assets$21 $9,545 $— $9,566 
Liabilities:
Acquisition contingent consideration (3)
$— $— $9,033 $9,033 
Deferred compensation plan liabilities (4)
96,480 — — 96,480 
Cash-settled equity awards (5)
247 — — 247 
Total liabilities$96,727 $— $9,033 $105,760 
December 31, 2020Level 1Level 2Level 3Total
Assets:
Money market funds (1)
$34,696 $— $— $34,696 
Interest rate swap (2)
— 347 — 347 
Total assets$34,696 $347 $— $35,043 
Liabilities:
Acquisition contingent consideration (3)
$— $— $4,299 $4,299 
Deferred compensation plan liabilities (4)
2,591 — — 2,591 
Cash-settled equity awards (5)
195 — — 195 
Total liabilities$2,786 $— $4,299 $7,085 
(1)Included in Cash and cash equivalents in the consolidated balance sheets.
(2)Included in Other assets in the consolidated balance sheets.
(3)Included in Other liabilities, except for current liabilities of $6,900 and $2,884 as of September 30, 2021 and December 31, 2020, respectively, which are included in Accruals and other current liabilities in the consolidated balance sheets. Acquisition contingent consideration liability is measured at fair value and is based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The valuation of contingent consideration uses assumptions the Company believes would be made by a market participant.
(4)Included in Deferred compensation plan liabilities, except for current liabilities of $7,306 and $169 as of September 30, 2021 and December 31, 2020, respectively, which are included in Accruals and other current liabilities in the consolidated balance sheets.
(5)Included in Accruals and other current liabilities in the consolidated balance sheets.
The following table is a reconciliation of the changes in fair value of the Company’s financial liabilities which have been classified as Level 3 in the fair value hierarchy.
Nine Months EndedYear Ended
September 30, 2021December 31, 2020
Balance, beginning of year$4,299 $6,599 
Payments(741)(3,425)
Addition5,581 2,380 
Change in fair value— (1,340)
Foreign currency translation adjustments(106)85 
Balance, end of period$9,033 $4,299 
The Company did not have any transfers between levels within the fair value hierarchy.