Fair Value Measurement

12 Months Ended

Dec. 31, 2014

FAIR VALUE MEASUREMENT:

The Company did not have any assets or liabilities that are measured at fair value on a recurring basis at December 31, 2014. The following table sets forth the Company’s assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2013:



	Fair Value as of		Fair Value Measurements at December 31, 2013 Using Fair Value Hierarchy
	December 31, 2013		Level 1		Level 2
Assets:
Total	$	—	$	—	$	—
Liabilities:
Interest rate swaps	$	25	$	—	$	25
Total	$	25	$	—	$	25

The Company’s Level 2 instruments primarily included interest rate swap derivatives that were valued using pricing models based on an income approach that discounts future cash flows to a present value amount. The significant pricing model inputs for interest rate swaps included published rates for U.S. Dollar LIBOR interest rate swaps. The pricing models also adjusted for nonperformance risk associated with the counterparty or Company, as applicable, through the use of credit risk adjusted discount rates based on published default rates. During the periods ended December 31, 2014 and 2013, no transfers were made between any levels within the fair value hierarchy. The company had no outstanding interest rate swap agreements at December 31, 2014.

The fair value of the Lake Charles LNG reporting unit was classified as Level 3 of the fair value hierarchy due to the significance of unobservable inputs developed using company-specific information. We used the income approach to measure the fair value of the Lake Charles LNG reporting unit. Under the income approach, we calculated the fair value based on the present value of the estimated future cash flows. The discount rate used, which was an unobservable input, was based on the weighted-average cost of capital adjusted for the relevant risk associated with business-specific characteristics and the uncertainty related to the business’s ability to attain the projected cash flows.

The approximate fair value of the Company’s cash and cash equivalents, accounts receivable and accounts payable is equal to book value, due to their short-term nature.

- 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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