Fair Value Measurements

12 Months Ended

Apr. 30, 2020

Fair Value Measurements

Fair Value Measurements

15. Fair Value Measurements

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the estimated carrying amount and fair value of the Company’s liabilities measured at fair value on a recurring basis as of April 30, 2020 and 2019:

	April 30,
	2020		2019
	(in thousands)
Interest rate swaps (Level 2)	$	32,218	$	5,613
Stock appreciation rights (Level 3)		24,205		23,458
Deferred compensation (Level 3)		1,660		1,695
Noncontrolling interest holders (Level 3)		8,300		12,498
Contingent consideration (Level 3)		—		12,354

Derivative instruments. The fair value of derivative instruments is determined using Level 2 inputs. Generally, the Company obtains the Level 2 inputs from its counterparties. Substantially all of the inputs are observable in the marketplace throughout the full term of the instruments, which can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. The fair value of the Company’s interest rate swaps is determined using widely accepted valuation techniques including a discounted cash flow analysis on the expected cash flows of the derivative. This analysis reflected the contractual terms of the derivatives, including the period to maturity, and used observable market-based inputs, including interest rate curves and implied volatilities. The fair value of the Company’s forward currency forward contract was based on observable market inputs, such as forward rates in active markets.

Stock appreciation rights, deferred compensation and redeemable noncontrolling interests. The fair values of stock appreciation rights, deferred compensation and redeemable noncontrolling interests are determined using Level 3 inputs. These inputs include a volatility rate based on comparable entities, a discount rate, the expected time to redemption of the liabilities, historical values of the book equity of certain subsidiaries and market information for comparable entities. The use of these inputs to derive the fair value of the liabilities at a point in time can result in volatility to the financial statements. See Note 13, “Stock Appreciation Rights, Deferred Compensation and Redeemable Noncontrolling Interests,” for a reconciliation of the beginning and ending balances.

Contingent consideration. In connection with the acquisition of Titan, the Company assumed certain contingent consideration arrangements that had an estimated fair value of $12.4 million. The contingent consideration arrangements were paid in cash during the year ended April 30, 2020. The fair value of contingent consideration was determined using Level 3 inputs. These inputs include a discount rate and probability adjusted payments. During the years ended April 30, 2020 and 2019, the Company recorded expense of $1.8 million and $0.8 million, respectively, related to the contingent consideration, which was included in other income, net in the Consolidated Statements of Operations and Comprehensive Income (Loss).

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Disclosures are required for certain assets and liabilities that are measured at fair value on a nonrecurring basis in periods subsequent to initial recognition. Such measurements of fair value relate primarily to assets and liabilities measured at fair value in connection with business combinations and asset impairments. For more information on business combinations, see Note 3, “Business Acquisitions.” During the fourth quarter of 2020, the Company recognized

a $63.1 million non-cash impairment charge to goodwill related to its Canada reporting unit. See Note 5, “Goodwill and Intangible Assets,” for more information regarding the impairment of goodwill and the fair value methodology. Also during the fourth quarter of 2020, the Company initiated a restructuring plan to close one of its facilities and recorded a $1.9 million impairment of the operating lease right-of-use asset. There were no other material long-lived asset impairments during the years ended April 30, 2020, 2019 or 2018.