Fair Value Measurements.

12 Months Ended

Dec. 31, 2020

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS.

16. FAIR VALUE MEASUREMENTS.

The fair value hierarchy prioritizes the inputs used in valuation techniques into three levels, as follows:

● Level 1 – Observable inputs – unadjusted quoted prices in active markets for identical assets and liabilities;

● Level 2 – Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability through corroboration with market data; and

● Level 3 – Unobservable inputs – includes amounts derived from valuation models where one or more significant inputs are unobservable. For fair value measurements using significant unobservable inputs, a description of the inputs and the information used to develop the inputs is required along with a reconciliation of Level 3 values from the prior reporting period.

Pooled separate accounts – Pooled separate accounts invest primarily in domestic and international stocks, commercial paper or single mutual funds. The net asset value is used as a practical expedient to determine fair value for these accounts. Each pooled separate account provides for redemptions by the Retirement Plan at reported net asset values per share, with little to no advance notice requirement, therefore these funds are classified within Level 2 of the valuation hierarchy.

Long-Lived Assets Held-for-Sale – The Company recorded its long-lived assets associated with its property and equipment held-for-sale at fair value at December 31, 2020 and 2019 of $48,548,000 and $70,400,000, respectively. The fair values of these assets are based on observable values for the assets through corroboration with market data and are designated as Level 3 inputs.

Warrants issued to Senior Noteholders – The Company’s warrants issued December 22, 2019, were valued using the Black-Scholes Valuation Model and adjusted for quarterly. On August 5, 2020, these warrants were exercised in full and prior to exercise, the Company adjusted their fair value using the following assumptions (fair value dollars in thousands):

Original Issuance	Exercise Price		Volatility			Risk Free Interest Rate			Term (years)		Fair Value
12/22/19	$	1.00		178.0	%		0.08	%		0.10	$	8,474

The assumptions used and related fair value for these warrants as of December 31, 2019 were as follows (fair value dollars in thousands):

Original Issuance	Exercise Price		Volatility			Risk Free Interest Rate			Term (years)		Fair Value
12/22/19	$	1.00		76.0	%		1.66	%		3.00	$	977

Warrants issued in Equity Offering – The Company issued pre-funded warrants and other warrants with exercise prices of $0.001 and $9.757, respectively. The Company valued these warrants upon issuance using the Binomial valuation methodology. On November 16, 2020, the pre-funded warrants were exercised, and as a result, were revalued immediately prior to their exercise. Further, the other warrants were amended on November 24, 2020, resulting in equity accounting, and accordingly were revalued immediately prior to their amendment. The assumptions used were as follows (fair value dollars in thousands):

Warrant Type	Valuation Date	Exercise Price		Volatility			Risk Free Interest Rate			Term (years)		Fair Value
Pre-funded	10/28/2020	$	0.01		97.0	%		0.34	%		5.00	$	23,638
Other	10/28/2020	$	9.76		134.0	%		0.14	%		1.50	$	27,048
Pre-funded	11/16/2020	$	0.01		97.0	%		0.40	%		4.95	$	21,916
Other	11/24/2020	$	9.76		135.0	%		0.13	%		1.45	$	31,231

The fair values of the warrants are based on unobservable inputs and are designated as Level 3 inputs. The changes in the Company’s fair value of its Level 3 inputs with respect to its warrants were as follows (in thousands):

	Warrants to Senior Noteholders			Pre-funded Warrants			Other Warrants
Balance, December 31, 2019	$	977		$	—		$	—
Issuance of warrants in October offering		—			23,638			27,048
Exercise of warrants/reclass to equity		(8,474	)		(21,917	)		(31,231	)
Adjustments to fair value for the period		7,497			(1,721	)		4,183
Balance, December 31, 2020	$	—		$	—		$	—

Other Derivative Instruments – The Company’s other derivative instruments consist of commodity positions. The fair values of the commodity positions are based on quoted prices on the commodity exchanges and are designated as Level 1 inputs.

The following table summarizes recurring and nonrecurring fair value measurements by level at December 31, 2020 (in thousands):

	Fair Value		Level 1		Level 2		Level 3		Benefit Plan Percentage Allocation
Assets:
Derivative financial instruments	$	17,149	$	17,149	$	—	$	—
Long-lived assets held-for-sale		58,295		—		—		58,295
Defined benefit plan assets(1) (pooled separate accounts):
Large U.S. Equity(2)		5,470		—		5,470		—		31	%
Small/Mid U.S. Equity(3)		2,605		—		2,605		—		15	%
International Equity(4)		2,921		—		2,921		—		17	%
Fixed Income(5)		6,592		—		6,592		—		37	%
	$	93,032	$	17,149	$	17,588	$	58,295
Liabilities:
	$	—	$	—	$	—	$	—

The following table summarizes recurring and nonrecurring fair value measurements by level at December 31, 2019 (in thousands):

	Fair Value			Level 1			Level 2		Level 3			Benefit Plan Percentage Allocation
Assets:
Derivative financial instruments	$	2,438		$	2,438		$	—	$	—
Long-lived assets held-for-sale		70,400			—			—		70,400
Defined benefit plan assets(1) (pooled separate accounts):
Large U.S. Equity(2)		4,654			—			4,654		—			30	%
Small/Mid U.S. Equity(3)		2,348			—			2,348		—			15	%
International Equity(4)		2,596			—			2,596		—			17	%
Fixed Income(5)		6,056			—			6,056		—			38	%
	$	88,492		$	2,438		$	15,654	$	70,400
Liabilities:
Derivative financial instruments	$	(1,860	)	$	(1,860	)	$	—	$	—
Warrants		(977	)		—			—		(977	)
	$	(2,837	)	$	(1,860	)	$	—	$	(977	)

(1)	See Note 10 for accounting discussion.
(2)	This category includes investments in funds comprised of equity securities of large U.S. companies. The funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value the fund.
(3)	This category includes investments in funds comprised of equity securities of small- and medium-sized U.S. companies. The funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value the fund.
(4)	This category includes investments in funds comprised of equity securities of foreign companies including emerging markets. The funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value the fund.
(5)	This category includes investments in funds comprised of U.S. and foreign investment-grade fixed income securities, high-yield fixed income securities that are rated below investment-grade, U.S. treasury securities, mortgage-backed securities, and other asset-backed securities. The funds are valued using the net asset value method in which an average of the market prices for the underlying investments is used to value the fund.