Fair Value Measurements

9 Months Ended

Sep. 30, 2015

FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. This hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The classification of each financial asset or liability within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The three levels of inputs used to measure fair value are as follows:


•	Level 1 - Quoted prices in active markets for identical assets or liabilities.


•	Level 2 - Observable inputs other than quoted prices included in Level 1 such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or inputs that are observable or can be corroborated by observable market data.


•	Level 3 - Unobservable inputs supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Financial assets and liabilities measured at fair value on a recurring basis at September 30, 2015, and December 31, 2014, consisted of the following:



(In thousands)	Fair Value Measurements
At September 30, 2015	Total		Level 1		Level 2		Level 3
Mutual funds	$	624	$	624	$	—	$	—
Investments
Federal agency notes	$	286,292	$	—	$	286,292	$	—
Commercial paper	$	40,052	$	—	$	40,052	$	—



(In thousands)	Fair Value Measurements
At December 31, 2014	Total		Level 1		Level 2		Level 3
Mutual funds	$	623	$	623	$	—	$	—
Investments
Federal agency notes	$	143,139	$	—	$	143,139	$	—
Commercial paper	$	108,115	$	—	$	108,115	$	—

The fair value of the mutual funds is based on market prices that are readily available and are recorded in Other noncurrent assets on the Company's Consolidated Balance Sheets. The balance of the money market funds at September 30, 2015 and December 31, 2014, was $45.9 million and $120.0 million, respectively, and is classified as Level 1. The money market funds are recorded in Cash and cash equivalents on the Company's Consolidated Balance Sheets. The fair value of the investments is valued indirectly using observable data, quoted prices for similar assets or liabilities in active markets. Unrealized gains or losses on mutual funds and investments are recorded in Accumulated other comprehensive income on the Company's Consolidated Balance Sheets.

Assets and liabilities measured at fair value on a nonrecurring basis at September 30, 2015, and December 31, 2014, consisted of the following:



(In thousands)	Fair Value Measurements
At September 30, 2015	Total		Level 1		Level 2		Level 3
Marathon mineral properties	$	8,560	$	—	$	—	$	8,560
1.875% Convertible debentures	$	524	$	—	$	524	$	—
1.75% Convertible debentures	$	302,684	$	—	$	302,684	$	—
Long-term investments	$	692	$	—	$	692	$	—



(In thousands)	Fair Value Measurements
At December 31, 2014	Total		Level 1		Level 2		Level 3
Certain Marathon real estate properties	$	754	$	—	$	—	$	754
1.875% Convertible debentures	$	2,245	$	—	$	2,245	$	—
1.75% Convertible debentures	$	303,108	$	—	$	303,108	$	—
Long-term investments	$	896	$	—	$	896	$	—

The Company determined in the second quarter of 2015, that the Marathon mineral properties owned by the Company in northern Ontario, Canada should be considered for impairment. The Company prepared an estimate of fair value and impaired those properties in the second quarter of 2015. An impairment charge of $46.8 million (before-tax) was taken on the Marathon mineral properties, reflecting an estimated fair value of $8.6 million.

The Company used its current trading data to determine the fair value of its $0.5 million of outstanding 1.875% debentures. The Company determined the fair value of the liability component of its $335.15 million and $396.75 million of outstanding 1.75% debentures at September 30, 2015 and December 31, 2014, respectively, by using observable market based information for debt instruments of similar amounts and duration.

The Company determined at December 31, 2014, that certain real estate properties owned by the Company in the town of Marathon should be considered for impairment. The Company obtained an estimate of fair value and impaired those properties.

The fair value of the Company's long-term investments in certain Canadian junior exploration companies at September 30, 2015 and December 31, 2014, was based on market prices for similar assets.

- 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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