FAIR VALUE MEASUREMENTS

3 Months Ended

Mar. 31, 2020

The Company determines the fair value of its financial instruments based on the fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Below are the three levels of inputs that may be used to measure fair value:


			Level 1			Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

			Level 2			Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

			Level 3			Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Items Measured at Fair Value on a Recurring Basis—The fair values of the Company’s financial assets and liabilities that are required to be measured on a recurring basis at fair value were as follows:


	March 31, 2020										December 31, 2019
	Fair Value Measurements Using										Fair Value Measurements Using
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets:

Interest rate swap agreements	—		$	34.8	—		—		$	9.0	—
Embedded derivative in lease agreement	—		—		$	10.5	—		—		$	10.7
Liabilities:
Interest rate swap agreements	—		$	0.1	—		—		$	7.5	—

Fair value of debt related to interest rate swap agreements (1)	$	35.4	—		—		$	3.3	—		—
Redeemable noncontrolling interests	—		—		$	541.4	—		—		$	1,096.5

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(1)Included in the carrying values of the corresponding debt obligations.

During the three months ended March 31, 2020, the Company made no changes to the methods described in note 12 to its consolidated financial statements included in the 2019 Form 10-K that it used to measure the fair value of its interest rate swap agreements, the embedded derivative in one of its lease agreements and redeemable noncontrolling interests. The changes in fair value for the embedded derivative in one of its lease agreements during the three months ended March 31, 2020 and 2019 were not material to the consolidated financial statements. The changes in the carrying amount of the redeemable noncontrolling interests are described in note 10.

Items Measured at Fair Value on a Nonrecurring Basis

Assets Held and Used—The Company’s long-lived assets are recorded at amortized cost and, if impaired, are adjusted to fair value using Level 3 inputs. During the three months ended March 31, 2020 and 2019, the Company recorded $3.7 million and $18.1 million of impairments, respectively. There were no other items measured at fair value on a nonrecurring basis during the three months ended March 31, 2020 or 2019.

Fair Value of Financial Instruments—The Company’s financial instruments for which the carrying value reasonably approximates fair value at March 31, 2020 and December 31, 2019 include cash and cash equivalents, restricted cash, accounts receivable and accounts payable. The Company’s estimates of fair value of its long-term obligations, including the current portion, are based primarily upon reported market values. For long-term debt not actively traded, fair value is estimated using either indicative price quotes or a discounted cash flow analysis using rates for debt with similar terms and maturities. As of March 31, 2020 and December 31, 2019, the carrying value of long-term obligations, including the current portion, was $24.6 billion and $24.1 billion, respectively. As of March 31, 2020, the fair value of long-term obligations, including the current portion, was $25.0 billion, of which $17.9 billion was measured using Level 1 inputs and $7.1 billion was measured using Level 2 inputs. As of December 31, 2019, the fair value of long-term obligations, including the current portion, was $25.0 billion, of which $17.5 billion was measured using Level 1 inputs and $7.5 billion was measured using Level 2 inputs.

- 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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