Fair Value Measurements

12 Months Ended

Dec. 31, 2017

FAIR VALUE MEASUREMENTS

Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value of assets and liabilities, the following hierarchy is used in selecting inputs, with the highest priority given to Level 1, as these are the most transparent or reliable:


•	Level 1 – quoted prices for identical instruments in active markets.


•	Level 2 – quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets.


•	Level 3 – valuations derived using one or more significant inputs that are not observable.

Financial Instruments Recorded at Fair Value (in millions)



	December 31, 2017								December 31, 2016
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents	$	208.8	$	—	$	—	$	208.8	$	260.7	$	—	$	—	$	260.7
Deferred compensation asset (a)	1.4		—		—		1.4		1.1				—		1.1

Liabilities:
Deferred compensation obligation (a)	1.4		—		—		1.4		1.1				—		1.1


(a)	The deferred compensation obligation represents the balance of deferred compensation plus net investment earnings. The deferred compensation plan is funded through a rabbi trust. Trust funds are invested in mutual funds for which unit prices are quoted in active markets and are classified within Level 1 of the valuation hierarchy.

There were no transfers between Levels 1, 2 or 3 during the periods presented.

Other Financial Instruments

As of December 31, 2017, and December 31, 2016, the balance sheet carrying amounts for Accounts Receivable, Accounts Payable and Accrued Liabilities (excluding the deferred compensation obligation described above), and payables under SWU purchase agreements approximate fair value because of the short-term nature of the instruments.

The carrying value and estimated fair value of long-term debt follow (in millions):



	December 31, 2017					December 31, 2016
	Carrying Value			Estimated Fair Value ^(a)		Carrying Value		Estimated Fair Value ^(a)
8.25% Notes	$	132.4	^(b)	$	61.7	$	—	$	—
8% PIK Toggle Notes	31.3			25.1		234.6		107.4

^(a) Based on the trading price nearest the balance sheet date observed on secondary markets, which is considered a Level 2 input as of December 31, 2017, and a Level 1 input as of December 31, 2016, based on the frequency of trading.


^(b)	The carrying value of the 8.25% Notes as of December 31, 2017, consists of the principal balance of $74.3 million and the sum of interest payment obligations until maturity. Refer to Note 9, Debt.

- 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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