Fair Value Disclosures

12 Months Ended

Dec. 31, 2019

Fair Value Disclosures

Fair Value Disclosures

Note 10: Fair Value Disclosures

The various inputs used to measure assets at fair value establish a hierarchy that distinguishes between assumptions based on market data (observable inputs) and the Company’s assumptions (unobservable inputs). The hierarchy consists of three broad levels as follows:

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

2. Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

3. Level 3 – Unobservable inputs developed using the Company’s estimates and assumptions, which reflect those that market participants would use.

The following table summarizes the valuation of financial instruments measured at fair value on a recurring basis on the balance sheet as of December 31, 2019 and 2018:

			Fair Value Measurements at December 31, 2019 with:
			Quoted prices in		Significant
			active markets		other		Significant
			for identical		observable		unobservable
(in thousands)	Total		assets		inputs		inputs
			(Level 1)		(Level 2)		(Level 3)
Assets:
Available-for-sale securities – equity securities	$	237	$	237	$	—	$	—
Investments measured at net asset value - trading securities	$	28,476

			Fair Value Measurements at December 31, 2018 with:
			Quoted prices in		Significant
			active markets		other		Significant
			for identical		observable		unobservable
(in thousands)	Total		assets		inputs		inputs
			(Level 1)		(Level 2)		(Level 3)
Assets:
Available-for-sale securities – equity securities	$	211	$	211	$	—	$	—
Investments measured at net asset value - trading securities	$	22,815

The Company determines the fair value of marketable securities classified as available-for-sale through quoted market prices. The total fair value is the final closing price, as defined by the exchange in which the asset is actively traded, on the last trading day of the period, multiplied by the number of units held without consideration of transaction costs. Marketable securities classified as trading are comprised of the SERP assets, as described in Note 12, and are recorded primarily at their net cash surrender values, calculated using their net asset values, which approximates fair value, as provided by the issuing insurance company. Significant observable inputs, in addition to quoted market prices, were used to value the trading securities. The Company’s policy is to recognize transfers between levels at the beginning of quarterly reporting periods. For the year ended December 31, 2019 there were no significant transfers in or out of levels 1, 2 or 3.

Under the Company’s revolving credit facility, there was no balance outstanding at December 31, 2019 and 2018. Outstanding balances based on the quote from the lender (level 2 inputs) is similar to the fair value as of the same date. The borrowings under our revolving credit facility bear variable interest rates as described in Note 8. The Company is subject to interest rate risk on the variable component of the interest rate.

The carrying amounts of other financial instruments reported in the balance sheet for current assets and current liabilities approximate their fair values because of the short maturity of these instruments. The Company currently does not use the fair value option to measure any of its existing financial instruments and has not determined whether or not it will elect this option for financial instruments it may acquire in the future.

The Company’s real estate classified as held for sale has been stated at fair value less costs to sell since the fair value less costs to sell is lower than its carrying amount. The non-recurring fair value measurement was completed in the third quarter of 2019 and determined based on observable market data that includes price per square foot involving comparable properties in similar locations and reflected in the table below:

			Quoted prices in		Significant
			active markets		other		Significant
			for identical		observable		unobservable
(in thousands)	Total		assets		inputs		inputs
			(Level 1)		(Level 2)		(Level 3)
Assets:
Assets held for sale	$	5,385	$	—	$	5,385	$	—