Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

As a basis for considering assumptions, the fair value guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1	Observable inputs such as quoted prices in active markets;
Level 2	Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
Level 3	Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

Assets and liabilities measured at fair value are based on one or more of three valuation techniques noted in the guidance. The three valuation techniques are as follows:

Market approach

Prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities;

Cost approach

Amount that would be required to replace the service capacity of an asset (i.e., replacement cost); and

Income approach

Techniques to convert future amounts to a single present amount are based on market expectations (including present value techniques, option-pricing models, and lattice models).

The Company’s financial assets and liabilities recorded at fair value on a recurring basis include derivative instruments and cash equivalents. The Company’s interest rate caps are recorded at their estimated fair values based on a current forward fixed price swap curve.

All instruments were valued using the market approach. The Company's interest rate caps are valued using a third-party pricing model that incorporates information about LIBOR yield curves, which is considered observable market data, for each instrument’s respective term. Counterparties to the Company's interest rate caps are highly rated financial institutions. Valuations of those interest rate caps may fluctuate significantly from period to period due to volatility in the valuation of interest rates which are driven by market conditions and the scheduled maturities of the caps.

The Company’s assets and liabilities that are measured at fair value on a recurring basis approximate the following:

	Fair Value Measurement at December 31, 2019 Reporting Date Using
	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Carrying Value
Recurring fair value measurements
Cash and cash equivalents	$	12.5		$	12.5	$	—		$	12.5
Derivative instruments - Liability position	(4.1		)	$	—	(4.1		)	(4.1		)
Total recurring fair value measurements	$	8.4		$	12.5	$	(4.1	)	$	8.4
	Fair Value Measurement at December 31, 2018 Reporting Date Using
	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Carrying Value
Recurring fair value measurements
Cash and cash equivalents	$	6.8		$	6.8	$	—		$	6.8
Derivative instruments - Asset position	6.5			—		6.5			6.5
Total recurring fair value measurements	$	13.3		$	6.8	$	6.5		$	13.3

 Refer to Note 13, Long-Term Debt for disclosures regarding the fair value of long-term debt.