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Fair Value Measurements

12 Months Ended

Dec. 31, 2020

Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the fair value of the Company’s financial instruments that are measured at fair value on a recurring basis as of December 31, 2020:


(in thousands)	Level 1		Level 2		Level 3		Total
Liability-classified stock compensation (1)	$	—	$	—	$	282	$	282

The following table presents the fair value of the Company’s financial instruments that are measured at fair value on a recurring basis as of December 31, 2019:


(in thousands)	Level 1		Level 2		Level 3		Total
Interest rate swap (2)	$	—	$	(95)	$	—	$	(95)
Liability-classified stock compensation (1)	—		—		218		218
Total	$	—	$	(95)	$	218	$	123

(1) The fair value of the stock appreciation right was measured using a Black-Scholes pricing model during the year ended December 31, 2020 and December 31, 2019. The fair value of phantom shares is based on the fair value of the Company's common stock. The fair value of performance based phantom shares was measured using a Monte Carlo pricing model. The valuation technique used did not change during the year ended December 31, 2020 and December 31, 2019.

(2) The derivative assets and liabilities relate to an interest rate derivative that is measured at fair value using observable market inputs such as interest rates, our own credit risks as well as an evaluation of the counterpart's' credit risks.

There were no transfers between Level 1 and Level 2 and no transfers out of Level 3 of the fair value hierarchy during the year ended December 31, 2020 and December 31, 2019.

At December 31, 2020, the Company evaluated the amount recorded under the Restated Term Loan and determined that the fair value was approximately $271.6 million. The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximate fair value.

Changes in Financial Instruments Measured at Level 3 Fair Value on a Recurring Basis

The following tables present the changes during the periods presented in our Level 3 financial instruments that are measured at fair value on a recurring basis.


(in thousands)	Interest rate contract		Liability-classified stock compensation		Total
Balance, December 31, 2019	$	(95)	$	218	$	123
Interest rate contract	95		—		95
Stock compensation activity	—		64		64
Balance, December 31, 2020	$	—	$	282	$	282

- 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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