Fair value refers to the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the entity transacts business. The inputs used to develop these fair value measurements are established in a hierarchy, which ranks the quality and reliability of the information used to determine the fair values. The fair value classification is based on levels of inputs. Assets and liabilities that are carried at fair value are classified and disclosed in one of the following categories:

Recurring Fair Value Measurements. The following table summarizes the fair value hierarchy of the Company’s financial assets carried at fair value on a recurring basis:

(1)

The investments relate to a non-qualified deferred compensation arrangement on behalf of certain members of management. The Company has an equivalent liability for this related-party transaction recorded in other long-term liabilities for the deferred compensation obligation.

Valuation Techniques. The Company’s money market mutual funds are invested in funds that seek to preserve principal, are highly liquid, and therefore are recorded on the balance sheet at the principal amounts deposited, which equals fair value. See Note 14—Accumulated Other Comprehensive Income (Loss) for the unrealized gain on equity securities recorded in accumulated other comprehensive income.

On September 14, 2018, the Company issued Convertible Notes due 2024 with a conversion feature that gave rise to an embedded derivative instrument and a stock purchase and cancellation agreement that gave rise to a derivative asset (See Note 8—Corporate Borrowings and Finance Lease Obligations). The derivative features have been valued using a Monte Carlo simulation approach. The Monte Carlo simulation approach consists of simulated common stock prices from the valuation date to the maturity of the Convertible Notes and to September 14, 2020 for the contingent call option for forfeiture shares. Increases or decreases in the Company’s share price, the volatility of the share price, the passage of time, risk-free interest rate, discount yield, and dividend yield will all impact the value of the derivative instruments. The Company re-values the derivative instruments at the end of each reporting period and any changes are recorded in other expense (income) in the consolidated statements of operations.

Nonrecurring Fair Value Measurements. The following table summarizes the fair value hierarchy of the Company’s assets that were measured at fair value on a nonrecurring basis:


			Fair Value Measurements at December 31, 2019 Using
					Significant other		Significant
	Total Carrying		Quoted prices in		observable		unobservable
	Value at		active market		inputs		inputs		Total
(In millions)	December 31, 2019		(Level 1)		(Level 2)		(Level 3)		Losses
Property, net:
Property net	$	29.2	$	—	$	—	$	29.2	$	23.1
Operating lease right-of-use assets
Operating lease right-of-use assets		123.3		—		—		123.3		60.0
Other long-term assets
Property owned, net		3.0		—		—		3.0		1.2
Equity interest investment		2.2		—		—		2.2		3.6
Total	$	157.7	$	—	$	—	$	157.7		87.9

Long-lived assets held and used, operating lease right-of-use assets, a property held and not used, and an equity interest investment without a readibly determinable fair value were considered impaired and were written down to their fair value at December 31, 2019 of $157.7 million. There is considerable management judgment with respect to cash flow estimates and discount rates used in determining fair value, and therefore are classified as Level 3 measurements within the fair value measurement hierarchy. See Note 1—The Company and Significant Accounting Policies for further information.

Fair Value Measurements at December 31, 2018 Using

Significant other

Significant

Total Carrying

Quoted prices in

observable

unobservable

Value at

active market

inputs

Total

(In millions)

December 31, 2018

(Level 1)

(Level 2)

(Level 3)

Losses

Property, net:

Property owned, net

17.3

—

17.3

13.8

Long-lived assets held and used and a favorable lease were considered impaired and were written down to their fair value at December 31, 2018 of $17.3 million.

Other Fair Value Measurement Disclosures. The following table summarizes the fair value of financial instruments that are not recognized at fair value in the statement of financial position for which it is practicable to estimate that value:


			Fair Value Measurements at December 31, 2019 Using
					Significant other		Significant
	Total Carrying		Quoted prices in		observable		unobservable
	Value at		active market		inputs		inputs
(In millions)	December 31, 2019		(Level 1)		(Level 2)		(Level 3)
Current maturities of corporate borrowings	$	20.0	$	—	$	20.4	$	—
Corporate borrowings		4,733.4		—		4,135.3		514.9


			Fair Value Measurements at December 31, 2018 Using
					Significant other		Significant
	Total Carrying		Quoted prices in		observable		unobservable
	Value at		active market		inputs		inputs
(In millions)	December 31, 2018		(Level 1)		(Level 2)		(Level 3)
Current maturities of corporate borrowings	$	15.2	$	—	$	13.4	$	1.4
Corporate borrowings		4,707.8		—		3,909.2		475.2

Valuation Technique. Quoted market prices and observable market based inputs were used to estimate fair value for level 2 inputs. The level 3 fair value measurement represents the transaction price of the corporate borrowings under market conditions. On September 14, 2018, the Company issued $600.0 million of Convertible Notes due 2024. These notes were issued by private placement, as such there is no observable market for these Convertible Notes. The Company valued these notes at principal value less a discount reflecting a market yield to maturity. See Note 8—Corporate Borrowings and Finance Lease Obligations for further information.

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate fair value because of the short maturity of these instruments.