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Note 10 - Fair Value Measurement

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Fair Value Disclosures [Text Block]

10. Fair Value Measurement

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

		*Fair Value Measurement at Reporting Date Using*
September 30, 2019		*Level 1*				*Level 2*				*Level 3*				*Total*
Cash equivalents
Money market funds		$	68,579			$	—			$	—			$	68,579
Other noncurrent assets
Restricted cash			5,658				—				—				5,658
Total assets		$	74,237			$	—			$	—			$	74,237
Other current liabilities
Interest rate cash flow hedge		$	—			$	5,564			$	—			$	5,564
Total liabilities		$	—			$	5,564			$	—			$	5,564

December 31, 2018
Cash equivalents
Money market funds		$	84,613			$	—			$	—			$	84,613
Other noncurrent assets
Restricted cash			5,825				—				—				5,825
Total assets		$	90,438			$	—			$	—			$	90,438
Other current liabilities
Interest rate cash flow hedge		$	—			$	1,098			$	—			$	1,098
Total liabilities		$	—			$	1,098			$	—			$	1,098

September 30, 2018
Cash equivalents
Money market funds		$	68,765			$	—			$	—			$	68,765
Other current assets
Interest rate cash flow hedge			—				1,500				—				1,500
Other noncurrent assets
Restricted cash			5,599				—				—				5,599
Total assets		$	74,364			$	1,500			$	—			$	75,864

Commodity Swap

In February 2019, we entered into a commodity swap designated as a cash flow hedge covering the periods from March to October 2019 with an original notional amount of $8.7 million which represented approximately 60.0% of our forecasted purchases for fixed price asphalt during these periods. The commodity swap is reported at fair value using Level 2 inputs in the condensed consolidated balance sheets. Gains or losses on the effective portion are initially reported as a component of AOCI and subsequently reclassified to cost of revenue in the condensed consolidated statements of operations when the monthly hedged commodity payment is settled. As of September 30, 2019, the fair value of the cash flow hedge was immaterial and was included in other current assets in the condensed consolidated balance sheets. During the three and nine months ended September 30, 2019, the unrealized gain, net of taxes, on the effective portion was immaterial, there was no ineffective portion, the cost of revenue reclassified from AOCI was immaterial and we estimate an immaterial amount to be reclassified from AOCI into pre-tax earnings within the next twelve months.

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, 2019

December 31, 2018

September 30, 2018

(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 $ 47,918 $ 47,856 $ 66,100 $ 65,290 $ 81,103 $ 79,941

Liabilities (including current maturities):

2019 Notes¹

Level 3
$ — $ — $ 40,000 $ 40,484 $ 80,000 $ 82,191

Credit Agreement - term loan¹

Level 3
140,625 141,634 146,250 147,141 148,125 148,832

Credit Agreement - revolving credit facility¹

Level 3
250,000 251,986 197,000 197,889 137,000 137,636

Convertible notes

Level 1
— — — — 69,659 69,472

¹ See Note 14 for definitions of, and more information about, the 2019 Notes and Credit Agreement.

During the three and nine months ended September 30, 2019 and 2018, we did not record any fair value adjustments related to nonfinancial assets and liabilities measured at fair value on a nonrecurring basis.

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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