Fair Value Measurement

6 Months Ended

Jun. 30, 2022

Fair Value Measurement

Fair Value Measurement

9.   Fair Value Measurement

Assets and Liabilities Measured at Fair Value

The carrying amount of assets and liabilities including cash and cash equivalents, accounts receivable, accounts payable and current portion of long-term debt approximated their fair value as of June 30, 2021, and December 31, 2021, due to the relative short maturity of these instruments. Management estimates the fair values of the secured term loan, secured 2023 notes and secured 2026 notes at approximately 67.3%, 65.0% and 33.0% respectively, of the respective principal balance outstanding as of June 30, 2022. The fair values of secured borrowings under the Company’s securitization facility and BRCC facility are equal to the respective carrying values. Other debt represents the Company's outstanding loan balances associated with various hardware, software purchases, maintenance and leasehold improvements along with loans and receivables factoring arrangement entered into by subsidiaries of the Company and as such, the cost incurred would approximate fair value. Property and equipment, intangible assets, capital lease obligations, and goodwill are not required to be re-measured to fair value on a recurring basis. These assets are evaluated for impairment if certain triggering events occur. If such evaluation indicates that impairment exists, the respective asset is written down to its fair value.

The Company determined the fair value of its long-term debt using Level 2 inputs including the recent issue of the debt, the Company’s credit rating, and the current risk-free rate. The Company’s true-up guarantee liability related to true-up guarantee provided on the Exchange Notes issued under Revolver Exchange transaction is re-measured each period and represents a Level 3 measurement as it is based on the estimated true-up obligation amount based on the legal agreement terms less amount already paid, if any.

The following table provides the carrying amounts and estimated fair values of the Company’s financial instruments as of June 30, 2022, and December 31, 2021:

	Carrying		Fair		Fair Value Measurements
As of June 30, 2022	Amount		Value		Level 1		Level 2		Level 3
Recurring assets and liabilities:
Long-term debt	$	975,457	$	361,735	$	—	$	361,735	$	—
True-up guarantee liability		30,985		30,985		—		—		30,985
Nonrecurring assets and liabilities:
Goodwill		358,172		358,172		—		—		358,172

	Carrying		Fair		Fair Value Measurements
As of December 31, 2021	Amount		Value		Level 1		Level 2		Level 3
Recurring assets and liabilities:
Long-term debt	$	1,104,399	$	895,615	$	—	$	895,615	$	—
Nonrecurring assets and liabilities:
Goodwill		358,323		358,323		—		—		358,323