Fair Value Measurement

3 Months Ended

Mar. 31, 2016

Fair Value Measurement

We measure our cash equivalents and interest rate and commodity swap derivative contracts at fair value in the condensed consolidated balance sheets on a recurring basis. The carrying values of receivables, other current assets, and accrued expenses and other current liabilities approximate their fair values due to the short-term nature of these instruments. During the three months ended March 31, 2016 and 2015, we did not record any fair value adjustments related to nonfinancial assets and liabilities measured at fair value on a nonrecurring basis.

Cash and Cash Equivalents

The following tables summarize our cash equivalents by significant investment categories (in thousands):



	Fair Value Measurement at Reporting Date Using
March 31, 2016	Level 1		Level 2		Level 3		Total
Cash equivalents
Money market funds	$	46,094	$	—	$	—	$	46,094
Total assets	$	46,094	$	—	$	—	$	46,094



	Fair Value Measurement at Reporting Date Using
December 31, 2015	Level 1		Level 2		Level 3		Total
Cash equivalents
Money market funds	$	62,024	$	—	$	—	$	62,024
Total assets	$	62,024	$	—	$	—	$	62,024



	Fair Value Measurement at Reporting Date Using
March 31, 2015	Level 1		Level 2		Level 3		Total
Cash equivalents
Money market funds	$	54,709	$	—	$	—	$	54,709
Total assets	$	54,709	$	—	$	—	$	54,709

A reconciliation of cash equivalents to consolidated cash and cash equivalents is as follows:



(in thousands)	March 31, 2016		December 31, 2015		March 31, 2015
Cash equivalents	$	46,094	$	62,024	$	54,709
Cash	152,204		190,812		184,694
Total cash and cash equivalents	$	198,298	$	252,836	$	239,403

Derivatives

We recognize derivative instruments as either assets or liabilities in the condensed consolidated balance sheets at fair value using Level 2 inputs.

Interest Rate Swaps

In January 2016, we entered into an interest rate swap designated as a cash flow hedge with an effective date of April 29, 2016 and an initial notional amount of $98.8 million. This interest rate swap matures in October 2020. The interest rate swap is designed to convert the interest rate on the term loan described in Note 10 from a variable rate of interest of LIBOR plus an applicable margin to a fixed rate of 1.47% plus the same applicable margin. As of March 31, 2016, the fair value of the cash flow hedge was $1.5 million and was included in accrued expenses and other current liabilities on the condensed consolidated balance sheets. During the three months ended March 31, 2016, the loss, net of taxes, on the effective portion was $0.9 million that was reported as a component of accumulated other comprehensive income (loss) and there was no ineffective portion. As of March 31, 2016, there was no interest expense associated with the swap and we estimate $0.7 million to be reclassified from accumulated other comprehensive income into pre-tax earnings within the next twelve months.

In March 2014, we entered into an interest rate swap with a notional amount of $100.0 million which matures in June 2018 designed to convert the interest rate of our 2019 Notes (defined in Note 10) from a fixed rate of 6.11% to a variable rate of 4.15% plus six-month LIBOR. As of March 31, 2016, December 31, 2015 and March 31, 2015, the fair value of the interest rate swap was $1.9 million, $0.6 million and $1.7 million and was included in other current assets on the condensed consolidated balance sheets. During the three months ended March 31, 2016 and 2015, net gains were $1.3 million and $1.3 million and were included in other income, net on our condensed consolidated statements of operations.

Other Derivatives

In March 2014, we entered into two diesel commodity swaps covering the periods from May 2014 to October 2014 and from May 2015 to October 2015 which represented roughly 25% of our forecasted purchases for diesel during these periods. In May 2014, we entered into two natural gas commodity swaps covering the periods from June 2014 to October 2014 and from May 2015 to October 2015 representing roughly 25% of our forecasted purchases of natural gas during these periods. As of March 31, 2015, the fair value of the commodity swap was $1.9 million and was included in accrued expenses and other current liabilities on the condensed consolidated balance sheets. During the three months ended March 31, 2015, we recorded net losses of $0.2 million that were included in other (income) expense, net in our condensed consolidated statements of operations.

Other Assets and Liabilities

The carrying values and estimated fair values of our financial instruments that are not required to be recorded at fair value in the condensed consolidated balance sheets are as follows:



		March 31, 2016				December 31, 2015				March 31, 2015
(in thousands)	Fair Value Hierarchy	Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value
Assets:
Held-to-maturity marketable securities	Level 1	$	115,654	$	115,692	$	105,695	$	105,336	$	99,804	$	99,811
Liabilities (including current maturities):
2019 Notes¹	Level 3	$	160,000	$	169,744	$	160,000	$	165,731	$	200,000	$	222,973
Credit Agreement loan¹	Level 3	98,750		99,316		100,000		99,375		70,000		70,391

¹The fair values of the 2019 Notes and Credit Agreement (defined in Note 10) loan are based on borrowing rates available to us for long-term loans with similar terms, average maturities, and credit risk.

- 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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