Fair Value Measurement

6 Months Ended

Jun. 30, 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 and six months ended June 30, 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
June 30, 2016	Level 1		Level 2		Level 3		Total
Cash equivalents
Money market funds	$	30,082	$	—	$	—	$	30,082
Commercial paper	4,994		—		—		4,994
Total assets	$	35,076	$	—	$	—	$	35,076



December 31, 2015
Cash equivalents
Money market funds	$	62,024	$	—	$	—	$	62,024
Total assets	$	62,024	$	—	$	—	$	62,024



June 30, 2015
Cash equivalents
Money market funds	$	23,975	$	—	$	—	$	23,975
Total assets	$	23,975	$	—	$	—	$	23,975

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



(in thousands)	June 30, 2016		December 31, 2015		June 30, 2015
Cash equivalents	$	35,076	$	62,024	$	23,975
Cash	126,142		190,812		164,172
Total cash and cash equivalents	$	161,218	$	252,836	$	188,147

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

As of June 30, 2016, the fair value of the cash flow hedge that we entered into in January 2016 was $2.1 million and was included in accrued expenses and other current liabilities on the condensed consolidated balance sheets. During the three and six months ended June 30, 2016, the losses, net of taxes, on the effective portion were $0.4 million and $1.3 million, respectively, and were reported as a component of accumulated other comprehensive loss. During the three and six months ended June 30, 2016 there was no ineffective portion and the interest expense reclassified from accumulated other comprehensive income was $0.1 million for both periods. We estimate $0.8 million to be reclassified from accumulated other comprehensive income into pre-tax earnings within the next twelve months.

As of June 30, 2016, December 31, 2015 and June 30, 2015, the fair value of the interest rate swap that we entered into in March 2014 was $1.7 million, $0.6 million and $0.9 million, respectively, and was included in other current assets on the condensed consolidated balance sheets. During the three and six months ended June 30, 2016, we recorded net gains of $0.3 million and $1.6 million, respectively, and during the three and six months ended June 30, 2015 we recorded a net loss of less than $0.1 million and a net gain of $1.3 million, respectively, and these amounts were included in other income, net on our condensed consolidated statements of operations.

Other Derivatives

Our diesel and natural gas commodity swaps were settled in October 2015. As of June 30, 2015, the fair value of these swaps was $1.6 million and was included in accrued expenses and other current liabilities on the condensed consolidated balance sheets. During the three and six months ended June 30, 2015, the amounts included in other (income) expense, net in our condensed consolidated statements of operations were immaterial.

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:



		June 30, 2016				December 31, 2015				June 30, 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	$	77,612	$	77,678	$	105,695	$	105,336	$	88,068	$	88,075
Liabilities (including current maturities):
2019 Notes¹	Level 3	$	160,000	$	167,210	$	160,000	$	165,731	$	200,000	$	212,648
Credit Agreement loan¹	Level 3	97,500		97,409		100,000		99,375		70,000		69,387

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 debt 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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