Fair Value Measurement

9 Months Ended

Sep. 30, 2016

Fair Value Measurement

We measure our cash equivalents and our 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 nine months ended September 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
September 30, 2016	Level 1		Level 2		Level 3		Total
Cash equivalents
Money market funds	$	12,041	$	—	$	—	$	12,041
Total assets	$	12,041	$	—	$	—	$	12,041



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



September 30, 2015
Cash equivalents
Money market funds	$	50,006	$	—	$	—	$	50,006
Total assets	$	50,006	$	—	$	—	$	50,006

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



(in thousands)	September 30, 2016		December 31, 2015		September 30, 2015
Cash equivalents	$	12,041	$	62,024	$	50,006
Cash	138,184		190,812		171,779
Total cash and cash equivalents	$	150,225	$	252,836	$	221,785

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 September 30, 2016, the fair value of the cash flow hedge that we entered into in January 2016 was $1.3 million and was included in accrued expenses and other current liabilities on the condensed consolidated balance sheet. During the three and nine months ended September 30, 2016, the unrealized gains and losses, net of taxes, on the effective portion were net gains of $0.4 million and net losses of $1.0 million, respectively, and were reported as a component of accumulated other comprehensive loss. During the three and nine months ended September 30, 2016 there was no ineffective portion and the interest expense reclassified from accumulated other comprehensive loss was $0.1 million and $0.2 million, respectively. We estimate $0.5 million to be reclassified from accumulated other comprehensive income into pre-tax earnings within the next twelve months.

As of September 30, 2016, December 31, 2015 and September 30, 2015, the fair value of the interest rate swap that we entered into in March 2014 was $1.1 million, $0.6 million and $2.1 million, respectively, and was included in other current assets on the condensed consolidated balance sheets. During the three and nine months ended September 30, 2016, we recorded net losses of $0.6 million and net gains of $1.0 million, respectively, and during the three and nine months ended September 30, 2015 we recorded net gains of $1.2 million and $2.5 million, respectively. These net gains and losses were included in other (income) expense, net on our condensed consolidated statements of operations.

Other Derivatives

Our diesel and natural gas commodity swaps were settled in October 2015. As of September 30, 2015, the fair value of these swaps was $0.7 million and was included in accrued expenses and other current liabilities on the condensed consolidated balance sheets. During each of the three and nine months ended September 30, 2015, we recorded net losses of $0.4 million on these swaps which 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 were as follows:



		September 30, 2016				December 31, 2015				September 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	$	107,771	$	107,770	$	105,695	$	105,336	$	88,253	$	88,313
Liabilities (including current maturities):
2019 Notes¹	Level 3	$	160,000	$	169,094	$	160,000	$	165,731	$	200,000	$	212,919
Credit Agreement loan¹	Level 3	96,250		96,151		100,000		99,375		70,000		69,753

¹The fair values of the 2019 Notes and Credit Agreement (defined in Note 10) 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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