Fair Value Measurements

9 Months Ended

Sep. 30, 2016

9.	Fair Value Measurements

In connection with the refinancing of the 2015 Credit Facility, the Company terminated its interest rate swap agreements related to the 2015 Credit Facility which resulted in a $2 million termination charge. The remaining unrecognized loss of approximately $1 million will be reclassified to earnings through December 31, 2016.

In connection with the 2015 Credit Facility, the Company entered into the foregoing interest rate swap agreements in order to reduce its exposure to variability in cash flows relating to interest payments on a portion of its outstanding debt payments. These interest rate swap agreements were designated as cash flow hedges. The effective portion of the derivative’s gain or loss was initially reported in stockholders’ equity (as a component of accumulated other comprehensive loss) and would be subsequently reclassified into earnings in the same period or periods during which the hedged forecasted transaction affects earnings. The ineffective portion of the gain or loss of a cash flow hedge would be reported in earnings.

The Company’s interest rate swap liabilities were measured at fair value on a recurring basis and were aggregated by the level in the fair value hierarchy within which those measurements fall. All instruments were classified as Level 2 and there were no transfers of financial instruments between the three levels of fair value hierarchy during the periods ended September 30, 2016 and December 31, 2015.

The derivative instruments were comprised of $200 million of contracts effective December 31, 2015 which would have expired December 31, 2016. The Company had not posted any collateral related to these agreements. The other terms of these instruments were as follows:

Contract received:		Floating interest rate		LIBOR (subject to minimum of 1.25%)
Contract paid:		Fixed interest rates		3.09% - 3.18%

The following table presents our liabilities that are measured at fair value on a recurring basis:

Fair Value

Hierarchy

September 30, 2016

December 31, 2015

Interest rate swap liability

Level 2

—

3,590

- 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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