|
8.
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.
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, 2024 (in thousands):
| |
|
Fair |
|
|
|
|
|
|
|
|
|
|
| |
|
Value |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
| Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
| Derivative instruments |
|
$ |
5,606 |
|
|
$ |
5,606 |
|
|
$ |
— |
|
|
$ |
— |
|
| Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Derivative instruments |
|
$ |
(2,764 |
) |
|
$ |
(2,764 |
) |
|
$ |
— |
|
|
$ |
— |
|
The
following table summarizes recurring and nonrecurring fair value measurements by level at December 31, 2023 (in thousands):
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefit Plan |
|
| |
|
Fair |
|
|
|
|
|
|
|
|
|
|
|
Percentage |
|
| |
|
Value |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Allocation |
|
| Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Derivative financial instruments |
|
$ |
2,412 |
|
|
$ |
2,412 |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Defined benefit plan assets(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (pooled separate accounts): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Large U.S. Equity(2) |
|
|
5,608 |
|
|
|
— |
|
|
|
5,608 |
|
|
|
— |
|
|
|
30 |
% |
| Small/Mid U.S. Equity(3) |
|
|
3,350 |
|
|
|
— |
|
|
|
3,350 |
|
|
|
— |
|
|
|
18 |
% |
| International Equity(4) |
|
|
2,682 |
|
|
|
— |
|
|
|
2,682 |
|
|
|
— |
|
|
|
15 |
% |
| Fixed Income(5) |
|
|
6,845 |
|
|
|
— |
|
|
|
6,845 |
|
|
|
— |
|
|
|
37 |
% |
| |
|
$ |
20,897 |
|
|
$ |
2,412 |
|
|
$ |
18,485 |
|
|
$ |
— |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Derivative financial instruments |
|
$ |
13,849 |
|
|
$ |
13,849 |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
(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. |
|