Financial Instruments

3 Months Ended

Mar. 31, 2022

15. FINANCIAL INSTRUMENTS

The Company's only financial assets and liabilities which are measured at fair value on a recurring basis relate to certain aspects of the Company's benefit plans and our derivative instruments. We use the market approach to determine the fair value of these assets and liabilities using significant other observable inputs (Level 2) with the assistance of a third-party specialist. We do not have any assets or liabilities measured at fair value on a recurring basis using quoted prices in an active market (Level 1) or significant unobservable inputs (Level 3). Gains and losses related to the fair value changes in the deferred compensation assets and liabilities are recorded in general and administrative expense in the consolidated statements of operations. Gains and losses related to the fair value of the interest rate and forward interest rate swaps are recorded in other comprehensive income.

The following table summarizes the fair value balances (in thousands):


			Fair Value Measurement at
			March 31, 2022
	Total		Level 1		Level 2		Level 3
Assets:
Company owned life insurance policies (1)	$	28,315	$	—	$	28,315	$	—
	$	28,315	$	—	$	28,315	$	—
Liabilities:
Deferred compensation liabilities	$	20,449	$	—	$	20,449	$	—
10 year forward interest rate swap		1,489		—		1,489		—
	$	21,938	$	—	$	21,938	$	—


			Fair Value Measurement at
			December 31, 2021
	Total		Level 1		Level 2		Level 3
Assets:
Company owned life insurance policies (1)	$	32,299	$	—	$	32,299	$	—
	$	32,299	$	—	$	32,299	$	—
Liabilities:
Deferred compensation liabilities	$	22,114	$	—	$	22,114	$	—
10 year forward interest rate swap		5,446		—		5,446		—
	$	27,560	$	—	$	27,560	$	—
(1) Deferred compensation assets consist of the cash surrender value of life insurance policies and are intended to assist in the funding of the deferred compensation liabilities.

- 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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