Fair Value Measurement

12 Months Ended

Dec. 31, 2016

The following tables summarize significant assets and liabilities measured at fair value in the consolidated balance sheets on a recurring basis for each of the fair value levels (in thousands):



	Fair Value Measurement at Reporting Date Using
December 31, 2016	Level 1		Level 2		Level 3		Total
Cash equivalents
Money market funds	$	10,057	$	—	$	—	$	10,057
Total assets	$	10,057	$	—	$	—	$	10,057



	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

A reconciliation of cash equivalents to consolidated cash and cash equivalents is as follows (in thousands):



December 31,	2016		2015
Cash equivalents	$	10,057	$	62,024
Cash	179,269		190,812
Total cash and cash equivalents	$	189,326	$	252,836

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. These commodity swaps were settled in October 2015 and gains or losses, including net periodic settlement amounts, were recorded in other income, net in our consolidated statements of operations. During the years ended December 31, 2015 and 2014, we recorded net losses of $0.4 million and $2.0 million, respectively.

Interest Rate Swaps

In March 2014, we entered into an interest rate swap with a notional amount of $100.0 million with a maturity date of June 2018 designed to convert the interest rate of our 2019 Notes (defined in Note 11) from a fixed rate of 6.11% to a variable rate of 4.15% plus six-month LIBOR. We terminated the interest rate swap in December 2016 due to the possibility of increasing interest rates. The interest rate swap is reported at fair value using Level 2 inputs in the consolidated balance sheets. Gains or losses, including net periodic settlement amounts, are recorded in other income, net, in our consolidated statements of operations. During the years ended December 31, 2016, 2015 and 2014, we recorded net gains of $0.3 million, $1.5 million and $1.4 million, respectively. The associated balance was recorded in other current assets in the consolidated balance sheets and was $0.6 million as of December 31, 2015.

In January 2016, we entered into an interest rate swap designated as a cash flow hedge with an effective date of April 2016 and an initial notional amount of $98.8 million which matures in October 2020. The interest rate swap is designed to convert the interest rate on the term loan described in Note 11 from a variable rate of interest of LIBOR plus an applicable margin to a fixed rate of 1.47% plus the same applicable margin. The interest rate swap is reported at fair value using Level 2 inputs in the consolidated balance sheets. Gains or losses on the effective portion are initially reported as a component of accumulated other comprehensive income (loss) and subsequently reclassified to interest expense in the consolidated statements of operations when the quarterly hedged interest payment is settled. As of December 31, 2016, the fair value of the cash flow hedge was $0.8 million and was included in other current assets in the consolidated balance sheets. During the year ended December 31, 2016, the unrealized gain, net of taxes, on the effective portion was $0.2 million and was reported as a component of accumulated other comprehensive income (loss). During the year ended December 31, 2016, there was no ineffective portion and the interest expense reclassified from accumulated other comprehensive loss was $0.3 million. We estimate $0.3 million to be reclassified from accumulated other comprehensive income into pre-tax earnings within the next twelve months.

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



December 31,		2016				2015
	Fair Value Hierarchy	Carrying Value		Fair Value		Carrying Value		Fair Value
Assets:
Held-to-maturity marketable securities	Level 1	$	127,779	$	127,365	$	105,695	$	105,336
Liabilities (including current maturities):
Senior notes payable¹	Level 3	$	120,000	$	124,654	$	160,000	$	165,731
Credit Agreement term loan¹	Level 3	$	95,000	$	93,991	$	100,000	$	99,375
Credit Agreement - revolving credit facility¹	Level 3	$	30,000	$	29,452	$	—	$	—

¹The fair values of the senior notes payable and Credit Agreement (defined in Note 11) loan are based on borrowing rates available to us for long-term loans with similar terms, average maturities, and credit risk.

We measure certain nonfinancial assets and liabilities at fair value on a nonrecurring basis, at least annually. As of December 31, 2016 and 2015, the nonfinancial assets and liabilities included our asset retirement and reclamation obligations, as well as assets and corresponding liabilities associated with performance guarantees.

Fair value for the asset retirement and reclamation obligations were measured using Level 3 inputs and performance guarantees were measured using Level 2 inputs. Asset retirement and reclamation obligations were initially measured using internal discounted cash flow calculations based upon our estimates of future retirement costs - see Note 8 for details of the asset retirement balances and Note 1 for further discussion on fair value measurements. Performance guarantees were measured using estimated partner bond rates - see Note 10 for the liability balances and Note 1 for further discussion on performance guarantees.

During the years ended December 31, 2016, 2015 and 2014, fair value adjustments to our nonfinancial assets and liabilities were related to our asset retirement and reclamation obligations, restructuring gains associated with our EIP and non-cash impairment gains separate from our EIP, and are detailed as follows:


•	Asset retirement obligations adjustments were $2.1 million, $0.2 million and $3.0 million, respectively. See Note 8 for further information.


•	Restructuring gains associated with our EIP were $1.9 million, $6.0 million and $1.3 million, during the years ended December 31, 2016, 2015 and 2014, respectively, primarily associated with the sale of a real estate asset related to our equity method investments, the sale of a previously impaired consolidated real estate asset and the release of lease obligations.


•	Non-cash impairment gains were $1.3 million during 2014 and were associated with the sale of a previously impaired quarry site.

- 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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