Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of carrying amounts and estimated fair values by input level

The carrying amounts and estimated fair values by input level of the Company’s financial instruments were as follows:



	December 31, 2019
(in millions)	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	437.4	$	437.4	$	437.4	$	—	$	—
Equity securities	$	40.5	$	40.5	$	—	$	40.5	$	—
Held-to-maturity securities	$	6.7	$	6.7	$	—	$	6.7	$	—
Promissory notes	$	15.1	$	15.1	$	—	$	15.1	$	—
Financial liabilities:
Long-term debt
Senior Secured Credit Facilities	$	1,896.5	$	1,930.6	$	1,930.6	$	—	$	—
5.625% Notes	$	399.4	$	426.0	$	426.0	$	—	$	—
Other long-term obligations	$	89.2	$	89.7	$	—	$	89.7	$	—
Other liabilities	$	20.3	$	20.3	$	—	$	2.8	$	17.5



	December 31, 2018
(in millions)	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	479.6	$	479.6	$	479.6	$	—	$	—
Held-to-maturity securities	$	7.5	$	7.9	$	—	$	7.9	$	—
Promissory notes	$	16.9	$	17.4	$	—	$	17.4	$	—
Financial liabilities:
Long-term debt
Senior Secured Credit Facilities	$	1,907.9	$	1,886.3	$	1,886.3	$	—	$	—
5.625% Notes	$	399.3	$	360.0	$	360.0	$	—	$	—
Other long-term obligations	$	104.6	$	96.3	$	—	$	96.3	$	—
Other liabilities	$	21.9	$	21.8	$	—	$	2.8	$	19.0

Summary of the changes in fair value of Level 3 liabilities

The following table summarizes the changes in fair value of our Level 3 liabilities measured on a recurring basis:



	Other Liabilities
(in millions)	Contingent Purchase Price
Balance as of January 1, 2017	$	48.2
Additions	0.9
Payments	(19.6		)
Included in earnings⁽¹⁾	(6.8		)
Balance as of December 31, 2017	22.7
Payments	(4.2		)
Included in earnings⁽¹⁾	0.5
Balance as of December 31, 2018	19.0
Payments	(8.5		)
Included in earnings⁽¹⁾	7.0
Balance as of December 31, 2019	$	17.5

(1)

The expense is included in “General and administrative” within our Consolidated Statements of Income.

Schedule of the assets measured at fair value on a non-recurring basis

The following table sets forth the assets measured at fair value on a non-recurring basis during the years ended December 31, 2019 and 2018:



(in millions)	Valuation Date	Valuation Technique	Level 1		Level 2		Level 3		Total Balance		Total Reduction in Fair Value Recorded
Goodwill	10/1/2019	Discounted cash flow and market approach	$	—	$	—	$	161.1	$	161.1	$	(88.0	)
Gaming licenses	10/1/2019	Discounted cash flow	$	—	$	—	$	290.0	$	290.0	$	(62.6	)
Trademarks	10/1/2019	Discounted cash flow	$	—	$	—	$	87.5	$	87.5	$	(20.0	)
Property and equipment ⁽¹⁾	12/31/2018	Cost and market approach	$	—	$	—	$	—	$	—	$	(34.3	)

(1)

The fair value, which was concluded to be zero, of our property and equipment associated with Resorts Casino Tunica was determined using Level 2 inputs. See Note 7, “Property and Equipment” for more information.

Summary of significant unobservable inputs used in fair value calculations

The following table presents quantitative information about the significant unobservable inputs used in the fair value measurements of other indefinite-lived intangible assets as of the valuation date below:



(in millions)	Fair Value		Valuation Technique	Unobservable Input	Range or Amount
As of October 1, 2019
Gaming licenses	$	290.0	Discounted cash flow	Discount rate	10.5% - 11.25%
				Long-term revenue growth rate	2.0	%
Trademarks	$	87.5	Discounted cash flow	Discount rate	10.5% - 11.25%
				Long-term revenue growth rate	2.0	%
				Pretax royalty rate	1.0% - 2.0%

The following table summarizes the significant unobservable inputs used in calculating fair value for our Level 3 liabilities on a recurring basis as of December 31, 2019:



	Valuation Technique	Unobservable Input	Discount Rate
Plainridge Park Casino contingent purchase price	Discounted cash flow	Discount rate	5.63%