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Fair Value Measurements And Derivative Instruments Reporting | 9 Months Ended
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Sep. 30, 2019
Fair Value Measurements And Derivative Instruments Reporting [Abstract] |
Fair Value Measurements And Derivative Instruments Reporting | 9. 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 the Company’s financial liabilities that are measured at fair value on a recurring basis were as follows: ﻿ ﻿
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿Amounts in thousands |  | September 30, 2019 |  | December 31, 2018
﻿ |  | Level 1 |  | Level 2 |  | Level 3 |  | Level 1 |  | Level 2 |  | Level 3
﻿Interest rate swap asset (1) |  | $ | — |  | $ | 33 |  | $ | — |  | $ | — |  | $ | 169 |  | $ | —
﻿
| (1) |  | See “Derivative Instruments Reporting” below for detailed information regarding the Company’s interest rate swap agreements.
﻿ The Company determines the fair value of its interest rate swap agreements based on the notional amount of the swap and the forward rate CAD-CDOR curve provided by Bloomberg and zero-coupon Canadian spot rates as of the valuation date. The Company classifies these instruments as Level 2 because the inputs into the valuation model can be corroborated utilizing observable benchmark market rates at commonly quoted intervals. ﻿ Non-Recurring Fair Value Measurements The Company applies the provisions 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, 2019. ﻿ Long-Term Debt – The carrying value of the BMO Credit Agreement approximates fair value based on the variable interest paid on the obligations. The carrying value of the CPL credit facilities approximates fair value based on the short-term nature of the facilities, the variable interest paid on the Alior Bank facility and the recently negotiated terms. The carrying value of the CPL credit agreements approximates fair value based on the variable interest paid on the obligations. The carrying value of the CCB loan agreement approximates fair value based on the variable interest paid on the obligation. The estimated fair values of the outstanding balances under the BMO Credit Agreement, CPL credit facilities, CPL credit agreements, and CCB loan agreement are designated as Level 2 measurements in the fair value hierarchy based on quoted prices in active markets for similar liabilities. The carrying values of the Company’s finance lease obligations approximate fair value based on the similar terms and conditions currently available to the Company in the marketplace for similar financings. The fair value of the CDR land lease was CAD 28.6 million ($21.6 million based on the exchange rate in effect on September 30, 2019) as of September 30, 2019. The estimated fair values of the outstanding balances related to the Company’s finance lease obligations and the CDR land lease are designated as Level 3 measurements based on the unobservable nature of the inputs used to evaluate such liabilities. The Company entered into a line of credit agreement with UniCredit in August 2018. The Company had not borrowed against this line of credit as of September 30, 2019. ﻿ Other Estimated Fair Value Measurements – The estimated fair value of the Company’s other assets and liabilities, such as cash and cash equivalents, accounts receivable, inventory, accrued payroll and accounts payable, have been determined to approximate carrying value based on the short-term nature of those financial instruments. As of September 30, 2019 and December 31, 2018, the Company had no cash equivalents. ﻿ Derivative Instruments Reporting As of April 2015, the Company began using interest rate swaps to mitigate the risk of variable interest rates under its BMO Credit Agreement. The interest rate swaps were not designated as accounting hedges. The interest rate swap resets monthly, and the difference to be paid or received under the terms of the interest rate swap agreement is accrued as interest rates change and is recognized as an adjustment to interest expense for the related debt. See Note 5 for details of the Company’s outstanding interest rate swap agreement. ﻿ Changes in the variable interest rates to be paid or received pursuant to the terms of the interest rate swap agreements are recognized in interest expense on the Company’s condensed consolidated statements of earnings. The location and effects of derivative instruments on the condensed consolidated statements of earnings were as follows:
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿Amounts in thousands |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿ |  |  |  | For the three months |  | For the nine months
﻿Derivatives not designated as |  | Income Statement |  | ended September 30, |  | ended September 30,
﻿ASC 815 hedges |  | Classification |  | 2019 |  | 2018 |  | 2019 |  | 2018
﻿Interest Rate Swaps |  | Interest Expense |  | $ | 153 |  | $ | 171 |  | $ | 669 |  | $ | 624
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |  |
The location and fair value amounts of the Company’s derivative instruments in the condensed consolidated balance sheets were as follows: ﻿ ﻿
﻿ |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿Amounts in thousands |  |  |  | As of September 30, 2019 |  | As of December 31, 2018
﻿Derivatives not designated as ASC 815 hedges |  | Balance Sheet Classification |  | Gross Recognized Assets (Liabilities) |  | Gross Amounts Offset |  | Net Recognized Fair Value Assets (Liabilities) |  | Gross Recognized Assets (Liabilities) |  | Gross Amounts Offset |  | Net Recognized Fair Value Assets (Liabilities)
﻿Derivative assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
﻿Interest rate swaps - current |  | Other current assets |  | $ | 24 |  | $ | — |  | $ | 24 |  | $ | 94 |  | $ | — |  | $ | 94
﻿Interest rate swaps - non-current |  | Deposits and other |  |  | 9 |  |  | — |  |  | 9 |  |  | 75 |  |  | — |  |  | 75
﻿Total derivative assets |  |  |  | $ | 33 |  | $ | — |  | $ | 33 |  | $ | 169 |  | $ | — |  | $ | 169
﻿

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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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258 + Details
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