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Fair Value Measurements and Derivative Instruments Reporting | 9 Months Ended
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Sep. 30, 2015
Fair Value Measurements and Derivative Instruments Reporting [Abstract] |
Fair Value Measurements and Derivative Instruments Reporting | 11. FAIR VALUE MEASUREMENTS AND DERIVATIVE INSTRUMENTS REPORTING Fair Value Measurements The Company follows fair value measurement authoritative accounting guidance for all assets and liabilities measured at fair value. That authoritative accounting guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. Market or observable inputs are the preferred sources of values, followed by assumptions based on hypothetical transactions in the absence of market inputs. The fair value hierarchy for grouping these assets and liabilities is based on the significance level of the following inputs:
| · |  | Level 1 – quoted prices in active markets for identical assets or liabilities
| · |  | Level 2 – quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations whose inputs are observable or whose significant value drivers are observable
| · |  | Level 3 – significant inputs to the valuation model are unobservable
A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The Company reflects transfers between the three levels at the beginning of the reporting period in which the availability of observable inputs no longer justifies classification in the original level. Recurring Fair Value Measurements The estimated fair value and basis of valuation of our financial liabilities that are measured at fair value on a recurring basis were as follows:
Amounts in thousands |  | September 30, 2015
|  | Level 1 |  | Level 2 |  | Level 3
Interest rate swaps (1) |  | $ | 0 |  | $ | (223) |  | $ | 0
(a) See “Derivative Instruments Reporting” below for detailed information regarding our interest rate swaps.
There were no recurring fair value measurements as of December 31, 2014. Non-Recurring Fair Value Measurements The Company applies the provision of the fair value measurement standard to its non-recurring, non-financial assets and liabilities measured at fair value. There were no assets or liabilities measured at fair value on a non-recurring basis as of September 30, 2015 and December 31, 2014. Long-Term Debt – The carrying value of the Company’s BMO Credit Agreement that bears interest at the lenders’ variable rate and the carrying value of the CPL debt approximate fair value as of September 30, 2015 and December 31, 2014. Based on prices for identical or similar instruments in markets that are not active, recently negotiated terms of the debt and a large portion of the debt being current, the estimated fair values of the outstanding balances under the Company’s BMO Credit Agreement and CPL debt are designated as Level 2 measurements in the fair value hierarchy. The carrying value of the CDR debt approximates fair value as of September 30, 2015 and December 31, 2014 because the debt bears interest at a rate implicit in the CDR land lease and, as a result, the estimated fair value of the Company’s CDR debt is designated as a Level 3 measurement in the fair value hierarchy. As of September 30, 2015, the carrying amount of CDR’s land lease was CAD 19.5 million ($14.6 million based on the exchange rate in effect on September 30, 2015) with an effective interest rate of 12.9%. Other Estimated Fair Value Measurements – The estimated fair value of our other assets and liabilities, such as cash and cash equivalents, accounts receivable, inventory, accrued payroll, accounts payable and accrued liabilities have been determined to approximate carrying value based on the short-term nature of those financial instruments. As of September 30, 2015 and December 31, 2014, the Company had no cash equivalents. Derivative Instruments Reporting As of April 2015, we began using interest rate swaps to mitigate the risk of variable interest rates under our BMO Credit Agreement. As of September 30, 2015, we had two interest rate swap agreements, each with an outstanding balance of CAD 10.7 million ($8.0 million based on the exchange rate in effect on September 30, 2015) at a fixed CDOR rate of 3.92% and 3.89%, respectively, that were not designated as accounting hedges. These interest rate swaps reset monthly and expire on August 15, 2019. The difference to be paid or received under the terms of the interest rate swap agreements is accrued as interest rates change and recognized as an adjustment to interest expense for the related debt. Changes in the variable interest rates to be paid or received pursuant to the terms of the interest rate swap agreements will have a corresponding effect on future cash flows. Changes in fair value of the swap agreements are recognized in interest expense. The following table summarizes the location and effects of derivative instruments on the condensed consolidated statements of earnings (loss) for the three and nine months ended September 30, 2015. There were no derivative instruments for the three and nine months ended September 30, 2014.
Amounts in thousands |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivatives not designated as |  | Income Statement |  | For the three months ended September 30, |  | For the nine months ended September 30,
ASC 815 hedges |  | Classification |  | 2015 |  | 2014 |  | 2015 |  | 2014
Interest Rate Swaps |  | Interest Expense |  | $ | 229 |  | $ | 0 |  | $ | 518 |  | $ | 0
The following table summarizes the location and fair value amounts of our derivative instruments in the condensed consolidated balance sheets as of September 30, 2015. There were no derivative instruments as of December 31, 2014.
Amounts in thousands |  |  |  | As of September 30, 2015
Derivatives not designated as ASC 815 hedges |  | Balance Sheet Classification |  | Gross Recognized Liabilities |  | Gross Amounts Offset |  | Net Recognized Fair Value Liabilities
Derivative liabilities: |  |  |  |  |  |  |  |  |  |  |
Interest rate swaps - current |  | Accrued liabilities |  | $ | (107) |  | $ | 0 |  | $ | (107)
Interest rate swaps - non-current |  | Taxes payable and other |  |  | (116) |  |  | 0 |  |  | (116)
Total derivative liabilities |  |  |  | $ | (223) |  | $ | 0 |  | $ | (223)

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- 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. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=36462937&loc=d3e19207-110258 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 28 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13537-108611 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 16 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13504-108611 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13433-108611 + Details
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