Fair Value Measurements

12 Months Ended

Mar. 31, 2022

Fair Value Measurements [Abstract]

Fair Value Measurements

15. Fair Value Measurements

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table below summarizes our assets and liabilities measured at fair value on a recurring basis, aggregated by the level in the fair value hierarchy within which those measurements fall:

			Quoted in		Significant Other		Significant
			Identical Markets		Observable Inputs		Unobservable Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Balance at March 31, 2022:
Interest rate cap agreements	$	25,471	$	—	$	25,471	$	—
Total	$	25,471	$	—	$	25,471	$	—
Balance at March 31, 2021:
Interest rate cap agreements	$	(22,725)	$	—	$	(22,725)	$	—
Total	$	(22,725)	$	—	$	(22,725)	$	—

Derivative Financial Instruments

The valuation of our derivative financial instruments is determined using widely accepted valuation techniques, including a discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivative, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair value of the interest rate cap agreements is determined using the market standard methodology of discounting the future expected cash receipts that would occur if variable interest rates rise above the strike rate of the caps. The variable interest rates used in the calculation of projected receipts on the cap are based on an expectation of future interest rates derived from observable market interest rate curves and volatilities.

We incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we consider the impact of netting and any applicable credit enhancements. We measure the credit risk of our derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.

Although we have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments utilize Level 3 inputs to evaluate the likelihood of both our own default and counterparty default. As of March 31, 2022, we determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives and therefore, the valuations are classified in Level 2 of the fair value hierarchy.

Contingent Consideration

Prior to December 31, 2020, the valuation of our contingent consideration obligations was determined using a discounted cash flow method that involved a Monte Carlo simulation. This analysis reflects the contractual terms of the purchase agreements (i.e., minimum and maximum payments, length of earn-out periods, manner of calculating amounts due, etc.) and utilizes assumptions with regard to future cash flows that were determined using a Monte Carlo simulation which were then discounted to present value using an appropriate discount rate. Significant increases in future revenue assumptions would have resulted in a higher fair value measurement while an increase in the discount rate would have resulted in a lower fair value measurement. The measurement period ended December 31, 2020 at which point no obligations remained and the contingent consideration was reduced to zero.

The table below presents a reconciliation of the fair value of the liabilities that use significant unobservable inputs (Level 3):

	Year Ended		Year Ended
	March 31, 2022		March 31, 2021
Balance at beginning of period	$	—	$	(3,000)
Gain (loss) included in Other, net		—		3,000
Balance at end of period	$	—	$	—

The contingent consideration obligation was acquired as part of the Merger and there was no significant activity for the year ended March 31, 2020.

Assets and Liabilities Measured at Fair Value upon Initial Recognition

The carrying amount and the fair value of financial instruments held as of March 31, 2022 and 2021 were as follows:

	March 31, 2022				March 31, 2021
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Cash and cash equivalents	$	252,298	$	252,298	$	113,101	$	113,101
Senior Credit Facilities (Level 2)	$	3,257,487	$	3,288,401	$	3,405,552	$	3,488,883
Senior Notes (Level 2)	$	1,319,697	$	1,316,785	$	1,318,079	$	1,351,500
Debt component of tangible equity units (Level 2)	$	4,234	$	4,284	$	20,345	$	21,435

As described in Note 10, Goodwill and Intangible Assets, our prior year goodwill impairment analysis utilized Level 3 inputs in determining reporting unit fair values. Additionally, the assets acquired and liabilities assumed as part of business acquisitions were recorded at fair value upon initial recognition. See Note 4, Business Combinations, for additional information.