Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements.

v3.21.2
Fair Value Measurements.
 9 Months Ended
Sep. 30, 2021
Fair Value Disclosures [Abstract]  
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 September 30, 2021 and December 31, 2020 of $20,535,000 and $48,548,000, respectively. 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 September 30, 2021 (in thousands):

 

    Fair Value     Level 1     Level 2     Level 3  
Assets:                        
Derivative financial instruments   $ 12,977     $ 12,977     $
—
     $
—
  
                                 
Long-lived assets held-for-sale     30,158      
—
      
—
       30,158  
    $ 43,135     $ 12,977     $
—
     $ 30,158  
                                 
Liabilities:                                
                                 
Derivative financial instruments   $ (2,735 )   $ (2,735 )   $
—
     $
—
  
    $ (2,735 )   $ (2,735 )   $
—
     $
—
  

 

The following table summarizes recurring and nonrecurring fair value measurements by level at December 31, 2020 (in thousands):

 

                            Benefit Plan  
    Fair                       Percentage  
    Value     Level 1     Level 2     Level 3     Allocation  
Assets:                              
Derivative financial instruments   $ 17,149     $ 17,149     $
—
     $
—
      
 
  
                                         
Long-lived assets held-for-sale     58,295      
—
      
—
       58,295      
 
  
Defined benefit plan assets(1)    
 
      
 
      
 
      
 
      
 
  
(pooled separate accounts):                                        
Large U.S. Equity(2)     5,470      
—
       5,470      
—
       31 %
Small/Mid U.S. Equity(3)     2,605      
—
       2,605      
—
       15 %
International Equity(4)     2,921      
—
       2,921      
—
       17 %
Fixed Income(5)     6,592      
—
       6,592      
—
       37 %
    $ 93,032     $ 17,149     $ 17,588     $ 58,295          
                                         
Liabilities:                                        
                                         
    $
—
     $
—
     $
—
     $
—
          

 

(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.