Fair Value Measurements

6 Months Ended

Jun. 30, 2015

Fair Value Measurements [Abstract]

Fair Value Measurements

(11)  Fair Value Measurements

The Company follows the authoritative guidance for fair value measurements relating to financial and nonfinancial assets and liabilities, including presentation of required disclosures herein.  This guidance establishes a fair value framework requiring the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to price the assets and liabilities.  Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment.  The three levels are defined as follows:

Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities.

Level 2: Observable inputs other than those included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical assets or liabilities in inactive markets; or model-derived valuations or other inputs that can be corroborated by observable market data.

Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.

The following tables provide a summary of the financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2015 and December 31, 2014 (in thousands):

			Fair Value Measurements at Reporting Date Using
	June 30, 2015		Level 1		Level 2		Level 3
Intangible and other long-term assets, net
Non-qualified deferred compensation assets	$	11,858	$	368	$	11,490		-
Interest rate swaps	$	4,860		-	$	4,860		-
Accounts payable
Non-qualified deferred compensation liabilities	$	661		-	$	661		-
Other long-term liabilities
Non-qualified deferred compensation liabilities	$	17,440		-	$	17,440		-
	December 31, 2014		Level 1		Level 2		Level 3
Intangible and other long-term assets, net
Non-qualified deferred compensation assets	$	12,982	$	1,481	$	11,501		-
Interest rate swaps	$	4,183		-	$	4,183		-
Accounts payable
Non-qualified deferred compensation liabilities	$	2,291		-	$	2,291		-
Other long-term liabilities
Non-qualified deferred compensation liabilities	$	14,720		-	$	14,720		-

The Company’s non-qualified deferred compensation plans allow officers, certain highly compensated employees and non-employee directors to defer receipt of a portion of their compensation and contribute such amounts to one or more hypothetical investment funds.  The Company entered into separate trust agreements, subject to general creditors, to segregate assets of each plan and reports the accounts of the trusts in its condensed consolidated financial statements.  These investments are reported at fair value based on unadjusted quoted prices in active markets for identifiable assets and observable inputs for similar assets and liabilities, which represent Levels 1 and 2, respectively, in the fair value hierarchy. 

The Company has three interest rate swap agreements related to its fixed rate debt maturing in 2021 for notional amounts of $100 million each, whereby the Company is entitled to receive semi-annual interest payments at a fixed rate of 7 1/8% per annum and is obligated to make semi-annual interest payments at floating rates, which are adjusted every 90 days, based on LIBOR plus a fixed margin. The swap agreements, scheduled to terminate on December 15, 2021, are designated as fair value hedges of a portion of the Company’s 7 1/8% senior notes, as the derivatives have been tested to be highly effective in offsetting changes in the fair value of the underlying notes.  As these derivatives are classified as fair value hedges, the changes in the fair value of the derivatives are offset against the changes in the fair value of the underlying note in interest expense, net (see note 12). 

The fair value of the Company’s cash equivalents, accounts receivable and current maturities of long-term debt approximates their carrying amounts.  The fair value of the Company’s long-term debt was approximately $1,714.8 million and $1,624.3million as of June 30, 2015 and December 31, 2014, respectively.  The fair value of these debt instruments is determined by reference to the market value of the instruments as quoted in over-the-counter markets, which are Level 1 inputs.

The following table reflects the fair value measurements used in testing the impairment of long-lived assets and goodwill during the six months ended June 30, 2015 (in thousands):

			Fair Value Measurements at Reporting Date Using
	June 30, 2015		(Level 1)		(Level 2)		(Level 3)		Total Losses
Property, plant and equipment, net	$	97,114	$	-	$	-	$	97,114	$	(107,142)
Goodwill	$	329,594		-		-	$	329,594	$	(575,389)
Intangible assets	$	6,345	$	-	$	-	$	6,345	$	(43,114)

See note 2 for a discussion of reduction in value of assets expense recorded during the second quarter of 2015.