Fair Value Measurements

3 Months Ended

Mar. 31, 2016

Fair Value Measurements

5. Fair Value Measurements

The Company’s derivative instruments are measured at fair value on a recurring basis. U.S. GAAP establishes a fair value hierarchy that has three levels based on the reliability of the inputs used to determine the fair value. These levels include: (1) Level 1, defined as inputs such as unadjusted quoted prices in active markets for identical assets or liabilities; (2) Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and (3) Level 3, defined as unobservable inputs for use when little or no market data exists, therefore requiring an entity to develop its own assumptions.

The Company’s natural gas derivative instruments are included within Level 2 of the fair value hierarchy (see Note 4 herein for additional information on the derivative instruments). The following table sets forth by level within the fair value hierarchy the Company’s assets and liabilities that were accounted for at fair value:

	Fair value as of March 31, 2016
	Level 1		Level 2			Level 3		Total
Assets	$	—	$	—		$	—	$	—
Liabilities:
Derivative instruments		—		(10,371	)		—		(10,371	)
Total fair value	$	—	$	(10,371	)	$	—	$	(10,371	)
	Fair value as of December 31, 2015
	Level 1		Level 2			Level 3		Total
Assets	$	—	$	—		$	—	$	—
Liabilities:
Derivative instruments		—		(11,155	)		—		(11,155	)
Total fair value	$	—	$	(11,155	)	$	—	$	(11,155	)

At March 31, 2016, the fair value of the Company’s bank borrowings approximated the carrying value.