Fair Value Measurements

9 Months Ended

Sep. 30, 2016

(8) Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or the price paid to transfer a liability in an orderly transaction between market participants at the measurement date. Inputs used in determining fair value are characterized according to a hierarchy that prioritizes those inputs based on the degree to which they are observable. The three input levels of the fair value hierarchy are 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 (in thousands):



			Fair Value Measurements at Reporting Date Using
	September 30, 2016		Level 1		Level 2		Level 3
Intangible and other long-term assets, net
Non-qualified deferred compensation assets	$	12,370	$	367	$	12,003		-
Interest rate swaps	$	10,869		-	$	10,869		-
Accounts payable
Non-qualified deferred compensation liabilities	$	1,589		-	$	1,589		-
Other long-term liabilities
Non-qualified deferred compensation liabilities	$	18,591		-	$	18,591		-

	December 31, 2015		Level 1		Level 2		Level 3
Intangible and other long-term assets, net
Non-qualified deferred compensation assets	$	11,548	$	368	$	11,180		-
Interest rate swaps	$	6,905		-	$	6,905		-
Accounts payable
Non-qualified deferred compensation liabilities	$	721		-	$	721		-
Other long-term liabilities
Non-qualified deferred compensation liabilities	$	17,367		-	$	17,367		-

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 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 $1,282.0 million and $1,508.0 million as of September 30, 2016 and December 31, 2015, 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 impairments of long-lived assets and goodwill (in thousands):



	Nine Months Ended September 30, 2016
	Impairment		Fair Value
Goodwill	$	330,500	$	668,864
Property, plant and equipment, net	$	38,977	$	284,457
Intangible assets	$	66,882	$	-

Fair value is measured as of the impairment date using Level 3 inputs. See note 2 for discussion of reduction in value of assets and other charges.

- 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.

+ References + Details