FAIR VALUE MEASUREMENTS

12 Months Ended

Dec. 31, 2018

We account for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are:


•	Level 1: Quoted prices in active markets for identical assets or liabilities;


•	Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and


•	Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Assets and liabilities measured at fair value on a recurring basis are summarized as follows (in thousands):



	Level 1		Level 2		Level 3		Total
December 31, 2018:
Available-for-sale securities	$	—	$	2,309	$	—	$	2,309
Asset retirement obligations ⁽¹⁾	—		—		2,090		2,090


December 31, 2017:
Available-for-sale securities	—		2,271		—		—
Asset retirement obligations ⁽¹⁾	$	—	$	—	$	1,936	$	1,936

⁽¹⁾

We calculate the fair value of asset retirement obligations ("ARO") by discounting the estimated amount using the current Treasury bill rate adjusted for our credit non-performance. At December 31, 2018, the balance is included in "Other long-term liabilities," in the accompanying consolidated balance sheets. At December 31, 2017, $0.2 million and $1.7 million were included in "Other current liabilities" and "Other long-term liabilities," respectively, in the accompanying consolidated balance sheets.

The following table provides a summary of changes in our Level 3 asset retirement obligations (in thousands):



	2018		2017			2016
Balance, January 1	$	1,936	$	2,810		$	2,803
Accretion	154		197			207
Subsequent revision of estimated obligation	—		449			—
Payments	—		(1,520		)	(200		)
Balance, December 31	$	2,090	$	1,936		$	2,810

As of December 31, 2018, the Company held $2.3 million of available-for-sale debt securities which are reported at fair value on the Company's consolidated balance sheets in "Deposits and other assets." Unrealized holding gains and losses are reported within accumulated other comprehensive loss in the consolidated statements of operations and comprehensive loss. A decline in the fair value of a marketable security below the Company's cost basis is determined to be other than temporary, such marketable security is written down to its estimated fair value as a new cost basis and the amount of the write-down is included in earnings as an impairment charge. The Company may sell certain of its marketable securities prior to their stated maturities for strategic reasons including, but not limited to, anticipation of credit deterioration and maturity management.

The fair values of our Level 2 available-for-sale debt securities, based upon quoted prices for similar items in active markets, are as follows (in thousands):



	December 31, 2018
	Cost		Unrealized Gain		Unrealized Loss			Fair Value
Japanese Corporate Bonds	$	2,184	$	144	$	(107	)	$	2,221
Japanese Government Bonds	87		5		(4		)	88
Total Bonds	$	2,271	$	149	$	(111	)	$	2,309

	December 31, 2017
	Cost		Unrealized Gain		Unrealized Loss			Fair Value
Japanese Corporate Bonds	$	2,267	$	17	$	(100	)	$	2,184
Japanese Government Bonds	87		1		(1		)	87
Total Bonds	$	2,354	$	18	$	(101	)	$	2,271

The fair values of our other Level 2 debt liabilities, based upon quoted prices for similar items in active markets, are as follows (in thousands):



	December 31,
	2018				2017
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Term loan	$	429,143	$	428,071	$	298,500	$	301,485
Revolving credit facility	—		—		5,000		5,050

- 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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