| FAIR VALUE MEASUREMENTS |
| 9. |
FAIR VALUE MEASUREMENTS. |
The fair value hierarchy prioritizes the inputs
used in valuation techniques into three levels, as follows:
|
● |
Level
1 – Observable inputs – unadjusted quoted prices in active markets for identical
assets and liabilities; |
|
● |
Level
2 – Observable inputs other than quoted prices included in Level 1 that are observable
for the asset or liability through corroboration with market data; and |
|
● |
Level
3 – Unobservable inputs – includes amounts derived from valuation models where
one or more significant inputs are unobservable. For fair value measurements using significant
unobservable inputs, a description of the inputs and the information used to develop the
inputs is required along with a reconciliation of Level 3 values from the prior reporting
period. |
Pooled separate accounts – Pooled
separate accounts invest primarily in domestic and international stocks, commercial paper or single mutual funds. The net asset value
is used as a practical expedient to determine fair value for these accounts. Each pooled separate account provides for redemptions by
the Retirement Plan at reported net asset values per share, with little to no advance notice requirement, therefore these funds are classified
within Level 2 of the valuation hierarchy.
Long-Lived Assets Held-for-Sale –
The Company recorded its long-lived assets associated with its property and equipment held-for-sale at fair value at June 30, 2022 and
December 31, 2021 of $1,000,000. The fair values of these assets are based on observable values for the assets through corroboration
with market data and are designated as Level 3 inputs.
Other Derivative Instruments –
The Company’s other derivative instruments consist of commodity positions. The fair values of the commodity positions are based
on quoted prices on the commodity exchanges and are designated as Level 1 inputs.
The following table summarizes recurring and nonrecurring
fair value measurements by level at June 30, 2022 (in thousands):
| |
|
Fair |
|
|
|
|
|
|
|
|
|
|
| |
|
Value |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
| Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
| Derivative financial instruments |
|
$ |
27,488 |
|
|
$ |
27,488 |
|
|
$ |
— |
|
|
$ |
— |
|
| Long-lived assets held-for-sale |
|
|
1,000 |
|
|
|
— |
|
|
|
— |
|
|
|
1,000 |
|
| |
|
$ |
28,488 |
|
|
$ |
27,488 |
|
|
$ |
— |
|
|
$ |
1,000 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Derivative financial instruments |
|
$ |
(32,770 |
) |
|
$ |
(32,770 |
) |
|
$ |
— |
|
|
$ |
— |
|
The following table summarizes recurring and nonrecurring
fair value measurements by level at December 31, 2021 (in thousands):
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefit Plan |
|
| |
|
Fair |
|
|
|
|
|
|
|
|
|
|
|
Percentage |
|
| |
|
Value |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Allocation |
|
| Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Derivative financial instruments |
|
$ |
15,839 |
|
|
$ |
15,839 |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
| Long-lived assets held-for-sale |
|
|
1,000 |
|
|
|
— |
|
|
|
— |
|
|
|
1,000 |
|
|
|
|
|
| Defined benefit plan assets(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (pooled separate accounts): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Large U.S. Equity(2) |
|
|
5,612 |
|
|
|
— |
|
|
|
5,612 |
|
|
|
— |
|
|
|
28 |
% |
| Small/Mid U.S. Equity(3) |
|
|
3,684 |
|
|
|
— |
|
|
|
3,684 |
|
|
|
— |
|
|
|
18 |
% |
| International Equity(4) |
|
|
2,909 |
|
|
|
— |
|
|
|
2,909 |
|
|
|
— |
|
|
|
15 |
% |
| Fixed Income(5) |
|
|
7,782 |
|
|
|
— |
|
|
|
7,782 |
|
|
|
— |
|
|
|
39 |
% |
| |
|
$ |
36,826 |
|
|
$ |
15,839 |
|
|
$ |
19,987 |
|
|
$ |
1,000 |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Derivative financial instruments |
|
$ |
(13,582 |
) |
|
$ |
(13,582 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
| (1) |
Included
in other assets in the consolidated balance sheets. |
| (2) |
This
category includes investments in funds comprised of equity securities of large U.S. companies.
The funds are valued using the net asset value method in which an average of the market prices
for the underlying investments is used to value the fund. |
| (3) |
This
category includes investments in funds comprised of equity securities of small- and medium-sized
U.S. companies. The funds are valued using the net asset value method in which an average
of the market prices for the underlying investments is used to value the fund. |
| (4) |
This
category includes investments in funds comprised of equity securities of foreign companies
including emerging markets. The funds are valued using the net asset value method in which
an average of the market prices for the underlying investments is used to value the fund. |
| (5) |
This
category includes investments in funds comprised of U.S. and foreign investment-grade fixed
income securities, high-yield fixed income securities that are rated below investment-grade,
U.S. treasury securities, mortgage-backed securities, and other asset-backed securities.
The funds are valued using the net asset value method in which an average of the market prices
for the underlying investments is used to value the fund. |
|