Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2018

Financial Assets and Liabilities Required Fair Value Measurement on Recurring Basis

The Company’s financial assets and liabilities which require fair value measurement on a recurring basis are classified within the fair value hierarchy as follows (in thousands):



	September 30, 2018
	Level 1		Level 2		Level 3		Total
Assets
Interest rate swaps	$	—	$	18,673	$	—	$	18,673
Energy derivative	—		—		11,880		11,880
Foreign currency forward contracts	—		10,046		—		10,046
	$	—	$	28,719	$	11,880	$	40,599
Liabilities
Interest rate swaps	$	—	$	15,091	$	—	$	15,091
Foreign currency forward contracts	—		2,084		—		2,084
Contingent consideration	—		—		124,848		124,848
	$	—	$	17,175	$	124,848	$	142,023



	December 31, 2017
	Level 1		Level 2		Level 3		Total
Assets
Interest rate swaps	$	—	$	2,196	$	—	$	2,196
Energy derivative	—		—		26,872		26,872
Foreign currency forward contracts	—		5		—		5
	$	—	$	2,201	$	26,872	$	29,073
Liabilities
Interest rate swaps	$	—	$	25,758	$	—	$	25,758
Foreign currency forward contracts	—		3,623		—		3,623
Contingent consideration	—		—		21,943		21,943
	$	—	$	29,381	$	21,943	$	51,324

Fair Value Measurements, Recurring Level 3, Valuation Techniques

The valuation techniques and significant unobservable inputs used in recurring Level 3 fair value measurements were as follows (in thousands, for fair value):



September 30, 2018	Fair Value	Valuation Technique	Significant Unobservable Inputs	Range
Energy derivative	$11,880	Discounted cash flow	Forward electricity prices	$20.65-$32.70 ⁽¹⁾
			Discount rate	2.40%-2.60%

Broadview contingent consideration	$24,771	Discounted cash flow	Discount rate	4.0%-8.0%
			Annual energy production loss	0.7%
Tsugaru contingent consideration	$100,097	Discounted cash flow	Deferred purchase price	$109 - $128 million
			Discount rate	6.9%

December 31, 2017	Fair Value	Valuation Technique	Significant Unobservable Inputs	Range
Energy derivative	$26,872	Discounted cash flow	Forward electricity prices	$14.44 - $71.45⁽¹⁾
			Discount rate	1.69% - 1.96%

Contingent consideration	$21,943	Discounted cash flow	Discount rate	4.0% - 8.0%
			Annual energy production loss	1.0%


⁽¹⁾	Represents price per MWh

Reconciliation of Energy Derivative Contract Measured at Fair Value

The following tables present a reconciliation of the energy derivative contract and contingent consideration liability measured at fair value on a recurring basis using significant unobservable inputs (in thousands):



	Three months ended September 30,						Nine months ended September 30,
Energy Derivative	2018			2017			2018			2017
Balances, beginning of period	$	12,198		$	33,895		$	26,872		$	40,916
Total gain (loss) included in electricity sales	1,714			83			(2,356		)	4,144
Settlements	(2,032		)	(3,196		)	(12,636		)	(14,278		)
Balances, end of period	$	11,880		$	30,782		$	11,880		$	30,782

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation



	Three months ended September 30,					Nine months ended September 30,
Contingent Consideration Liability	2018			2017		2018			2017
Balances, beginning of period	128,000			21,502		21,943			—
Purchase	—			—		105,922			21,284
Total gain (loss) included in other income (expense), net	(311		)	3		(176		)	221
Settlement	(2,821		)	—		(2,821		)	—
Balances, end of period	$	124,868		$	21,505	$	124,868		$	21,505

Carrying Amounts and Fair Values of Company's Financial Liabilities

The following table presents the carrying amount and fair value and the fair value hierarchy of the Company’s financial liabilities that are not measured at fair value in the consolidated balance sheets, but for which fair value is disclosed (in thousands):



			Fair Value
	As reflected on the balance sheet		Level 1		Level 2		Level 3		Total
September 30, 2018
Long-term debt, including current portion	$	2,379,637	$	—	$	2,348,240	$	—	$	2,348,240
December 31, 2017
Long-term debt, including current portion	$	1,930,731	$	—	$	1,937,671	$	—	$	1,937,671