Fair Value Measurements

3 Months Ended

Mar. 26, 2022

The following table presents the carrying amount, estimated fair values and categorization under the fair value hierarchy for financial instruments held by the Company, using market information and what management believes to be appropriate valuation methodologies:


	March 26, 2022						December 31, 2021
	Carrying Amount		Fair Value (b)				Carrying Amount		Fair Value (b)
Assets:			Level 1		Level 2				Level 1		Level 2
Cash and cash equivalents	$	178,749	$	178,749	$	—	$	253,307	$	253,307	$	—


Investment in GreenFirst equity securities	$	48,087	$	48,087	$	—	$	38,510	$	—	$	38,510

Liabilities (a):


Fixed-rate long-term debt	921,625		—		934,787		919,455		—		964,308

(a) Liabilities exclude finance lease obligation.

(b) The Company did not have Level 3 assets or liabilities at March 26, 2022 or December 31, 2021.

The Company uses the following methods and assumptions in estimating the fair value of its financial instruments:

Cash and cash equivalents — The carrying amount is equal to fair market value.

Investment in GreenFirst shares — The Company received shares of common stock in connection with the sale of the lumber and newsprint assets to GreenFirst, which the Company was required to hold for a minimum of six months following the close of the transaction. Accordingly, prior to February 28, 2022, the fair value of these shares reflected a discount for lack of marketability (“DLOM”) given the restriction on sale by the Company. The primary inputs in the fair value estimate during the minimum holding period were expected term, dividend yield, volatility and risk-free rate. All inputs to the DLOM were observable. GreenFirst is based in Canada and currently does not pay a dividend. At March 26, 2022, the DLOM is no longer applicable as the six-month sale restriction has expired.

The following were the key inputs at each measurement date:


	March 26, 2022	December 31, 2021		At closing of transaction
Expected Term	n/a	0.16 years		0.5 years
Risk-free rate	n/a	0.10	%	0.20	%
Dividend yield	—	—		—
Volatility	n/a	73.77	%	92.04	%

DLOM	n/a	6.77	%	14.38	%

The Company recently sold the GreenFirst common shares. See Note 1 — Basis of Presentation and New Accounting Pronouncements for additional information.

Debt — The fair value of fixed rate debt is based upon quoted market prices for debt with similar terms and maturities.

The variable rate debt adjusts with changes in the market rate, therefore the carrying value approximates fair value.

- 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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