Aveanna Healthcare Holdings, Inc. Fair Value Disclosure
9. FAIR VALUE MEASUREMENTS
The carrying amounts of cash and cash equivalents, patient accounts receivable, accounts payable, accrued expenses and other current liabilities approximate their fair values due to the short-term maturities of the instruments.
The Company’s other assets measured at fair value were as follows (amounts in thousands):
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Fair Value Measurements at January 3, 2026 |
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Level 1 |
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Level 2 |
|
Level 3 |
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Total |
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Assets: |
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|
|
|
|
|
|
|
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Interest rate cap agreements |
$ |
- |
|
$ |
4,778 |
|
$ |
- |
|
$ |
4,778 |
|
Interest rate swap agreements |
|
- |
|
|
3,851 |
|
|
- |
|
|
3,851 |
|
$ |
- |
|
$ |
8,629 |
|
$ |
- |
|
$ |
8,629 |
|
|
|
|
|
|
|
|
|
|
|
||||
|
Fair Value Measurements at December 28, 2024 |
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|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
|
||||
Assets: |
|
|
|
|
|
|
|
|
||||
Interest rate cap agreements |
$ |
- |
|
$ |
22,543 |
|
$ |
- |
|
$ |
22,543 |
|
Interest rate swap agreements |
|
- |
|
|
15,737 |
|
|
- |
|
|
15,737 |
|
$ |
- |
|
$ |
38,280 |
|
$ |
- |
|
$ |
38,280 |
|
|
During the fiscal years ended January 3, and December , , there were no transfers between Level 1, Level 2, and Level 3.
The fair values of the interest rate swap and cap agreements are based on the estimated net proceeds or costs to settle the transactions as of the respective balance sheet dates. The valuations are based on commercially reasonable industry and market practices for valuing similar financial instruments. See Note 10 – Derivative Financial Instruments for further details on the Company’s interest rate swap and cap agreements.
At the most recent quantitative goodwill impairment test on September 29, 2024, the Company performed a Step 1 analysis that used a combination of expected present value of future cash flows (income approach) and comparable public companies (market approach) to determine the fair value of the reporting unit. These approaches used primarily unobservable inputs, including revenue growth rates, projected EBITDA margins, and discount rates, which were considered Level 3 fair value measurements. The fair value analysis took into account recent and expected operating performance.
See Note 12 – Share-Based Compensation for further details on the valuation methodologies related to the Company’s deferred restricted stock units.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Mar 19, 2026 | Showing above |
| 2024 | Mar 13, 2025 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.