Fair Value Measurement

6 Months Ended

Jun. 30, 2021

(5) Fair Value Measurement

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The following fair value hierarchy classifies the inputs to valuation techniques used to measure fair value into one of three levels:

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Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities.

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Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These included quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

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Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.

The following tables present the assets and liabilities recorded at fair value on a recurring basis:

	Balance at		Balance Sheet	Basis of Fair Value Measurement
(in thousands)	June 30, 2021		Location	Level 1		Level 2		Level 3
Assets:
Money market mutual funds	$	13,900	Cash and cash equivalents	$	13,900
Money market mutual funds		71,012	Other assets		71,012
Certificates of deposit		2,200	Other assets				2,200
Equity securities		77,675	Other assets		77,675
Deferred compensation assets		44,019	Other assets		44,019
Foreign currency exchange contracts		442	Other current assets				442
	$	209,248		$	206,606	$	2,642		-
Liabilities:
Deferred compensation liability		44,019	Other noncurrent liabilities		44,019
	$	44,019		$	44,019		-		-

	Balance at		Balance Sheet	Basis of Fair Value Measurement
(in thousands)	December 31, 2020		Location	Level 1		Level 2		Level 3
Assets:
Term Deposit	$	540,000	Cash and cash equivalents			$	540,000
Money market mutual funds		37,100	Cash and cash equivalents		37,100
Money market mutual funds		70,995	Other assets		70,995
Certificates of deposit		2,300	Other assets				2,300
Equity securities		78,367	Other assets		78,367
Deferred compensation assets		42,044	Other assets		42,044
Foreign currency exchange contracts		9,987	Other current assets				9,987
	$	780,793		$	228,506	$	552,287		-
Liabilities:
Deferred compensation liability	$	42,044	Other noncurrent liabilities	$	42,044
	$	42,044		$	42,044		-		-

The fair value of our money market mutual funds, certificates of deposit and equity securities with a readily determinable fair value are computed based upon quoted market prices in an active market. The fair value of deferred compensation assets and offsetting liability are computed based on market prices in an active market held in a rabbi trust. The fair value of our interest rate swaps are based on quotes from our counter parties. The fair value of our foreign currency exchange contracts is valued using quoted forward exchange rates and spot rates at the reporting date.

As of June 30, 2021, in addition to the $14 million reflected above in cash and cash equivalents, we had approximately $83 million of other cash accounts that earn interest at variable rates ranging from .20% to .25%.

As of December 31, 2020, in addition to the $577 million reflected above in cash and cash equivalents, we had approximately $581 million of other cash accounts that earn interest at variable rates ranging from .20% to .25%.

- 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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