Fair Value Measurements

9 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurements

4. FAIR VALUE MEASUREMENTS

Accounting standards require that assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

The following table summarizes the valuation of our investments and financial instruments by the above pricing levels as of the valuation dates listed:

			September 30, 2016
	Total		(Level 1)		(Level 2)
			(Thousands of dollars)
Investments:
Money market mutual funds	$	17,608	$	17,608	$	—
Commercial paper		32,745		—		32,745
U.S. Government agencies		16,298		—		16,298
Corporate bonds and notes		235,893		—		235,893
		302,544		17,608		284,936
Deferred compensation plan assets		2,392		2,392		—
Total	$	304,936	$	20,000	$	284,936

			December 31, 2015
	Total		(Level 1)		(Level 2)
			(Thousands of dollars)
Investments:
Money market mutual funds	$	18,181	$	18,181	$	—
Commercial paper		5,981		—		5,981
U.S. Government agencies		11,469		—		11,469
Corporate bonds and notes		264,228		—		264,228
		299,859		18,181		281,678
Deferred compensation plan assets		2,294		2,294		—
Total	$	302,153	$	20,475	$	281,678

We hold our short-term investments in an investment fund consisting of high quality money market instruments of governmental and private issuers, which is classified as a short-term investment. Level 1 inputs are quoted prices (unadjusted) for identical assets or liabilities in active markets. These items are traded with sufficient frequency and volume to provide pricing on an ongoing basis. The fair values of the shares of these funds are based on observable market prices, and therefore, have been categorized in Level 1 in the fair value hierarchy. Level 2 inputs reflect quoted prices for identical assets or liabilities that are not actively traded. These items may not be traded daily; examples include corporate bonds and U.S. government agencies debt. There have been no reclassifications of assets between Level 1 and Level 2 investments during the periods covered by the financial statements included in this report. We hold no Level 3 investments. Investments reflected on our balance sheets as Other assets, which we hold to fund liabilities under our Officers’ Deferred Compensation Plan, consist mainly of multiple investment funds that are highly liquid and diversified.

Cash, accounts receivable, accounts payable and accrued liabilities, and our revolving credit facility debt all had fair values approximating their carrying amounts at September 30, 2016 and December 31, 2015. Our determination of the estimated fair value of our Senior Notes and our revolving credit facility debt is derived using Level 2 inputs, including quoted market indications of similar publicly-traded debt. The fair value of our Senior Notes, based on quoted market prices, was $485.6 million and $403.1 million at September 30, 2016 and December 31, 2015, respectively.