FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

12 Months Ended

Dec. 31, 2015

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

NOTE C – FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

Financial Instruments

The following table presents the components of cash and cash equivalents, short‑term investments, and restricted funds:

	December 31		December 31
	2015		2014
	(in thousands)
Cash and cash equivalents
Cash deposits(1)	$	110,279	$	99,615
Variable rate demand notes(1)(2)		29,790		16,326
Money market funds(3)		24,904		41,101
Total cash and cash equivalents	$	164,973	$	157,042
Short-term investments
Certificates of deposit(1)	$	61,597	$	45,909
Restricted cash(4)
Cash deposits(1)	$	1,384	$	1,386

⁽¹⁾ Recorded at cost plus accrued interest, which approximates fair value.

⁽²⁾ Amounts may be redeemed on a daily basis with the original issuer.

⁽³⁾ Recorded at fair value as determined by quoted market prices (see amounts presented in the table of financial assets and liabilities measured at fair value within this Note).

⁽⁴⁾ Amounts restricted for use are subject to change based on the requirements of the Company’s collateralized facilities (see Note G).

The Company’s long‑term investment financial instruments are presented in the table of financial assets and liabilities measured at fair value within this Note.

Concentrations of Credit Risk of Financial Instruments

The Company is potentially subject to concentrations of credit risk related to its cash, cash equivalents, and short‑term investments. The Company reduces credit risk by maintaining its cash deposits primarily in FDIC‑insured accounts and placing its unrestricted short‑term investments primarily in FDIC‑insured certificates of deposit. However, certain cash deposits and certificates of deposit may exceed federally insured limits. At December 31, 2015 and 2014, cash and cash equivalents totaling $69.9 million and $77.3 million, respectively, were not FDIC insured.

Fair Value Disclosure of Financial Instruments

Fair value and carrying value disclosures of financial instruments as of December 31 are presented in the following table:

	2015				2014
	(in thousands)
		Carrying		Fair		Carrying		Fair
		Value		Value		Value		Value
Credit Facility(1)	$	70,000	$	70,000	$	—	$	—
Term Loan(2)		—		—		70,000		70,000
Accounts receivable securitization borrowings(3)		35,000		35,000		—		—
Notes payable(4)		106,703		106,495		56,759		56,743
	$	211,703	$	211,495	$	126,759	$	126,743

⁽¹⁾ The revolving credit facility (the “Credit Facility”)under the Company’s Amended and Restated Credit Agreement, which was entered into in January 2015, carries a variable interest rate based on LIBOR, plus a margin, that is considered to be priced at market for debt instruments having similar terms and collateral requirements (Level 2 of the fair value hierarchy).

⁽²⁾ The Term Loan, which was entered into on June 15, 2012 and converted to borrowings under the Credit Facility on January 2, 2015, carried a variable interest rate based on LIBOR, plus a margin, that was considered to be priced at market for debt instruments having similar terms and collateral requirements (Level 2 of the fair value hierarchy).

⁽³⁾ Borrowings under the Company’s accounts receivable securitization program carry a variable interest rate based on LIBOR, plus a margin, that is considered to be priced at market for debt instruments having similar terms and collateral requirements (Level 2 of the fair value hierarchy).

⁽⁴⁾ Fair value of the notes payable was determined using a present value income approach based on quoted interest rates from lending institutions with which the Company would enter into similar transactions (Level 2 of the fair value hierarchy).

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the assets and liabilities that are measured at fair value on a recurring basis as of December 31:

	2015		2014
	(in thousands)
Assets:
Money market funds(1)(3)	$	24,904	$	41,101
Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan(2)(3)		2,127		2,968
	$	27,031	$	44,069
Liabilities:
Interest rate swap(4)	$	897	$	576

⁽¹⁾ Included in cash equivalents.

⁽²⁾ Nonqualified deferred compensation plan investments consist of U.S. and international equity mutual funds, government and corporate bond mutual funds, and money market funds which are held in a trust with a third‑party brokerage firm. Quoted market prices are used to determine fair values of the investments which are included in other long‑term assets, with a corresponding liability reported within other long‑term liabilities.

⁽³⁾ Fair value measured using quoted prices of identical assets in active markets (Level 1 of the fair value hierarchy).

⁽⁴⁾ Included in other long‑term liabilities. The interest rate swap fair value was determined by discounting future cash flows and receipts based on expected interest rates observed in market interest rate curves (Level 2 of the fair value hierarchy) adjusted for estimated credit valuation considerations reflecting nonperformance risk of the Company and the counterparty (Level 3 of the fair value hierarchy). The Company assessed Level 3 inputs as insignificant to the valuation at December 31, 2015 and 2014 and considers the interest rate swap valuation in Level 2 of the fair value hierarchy.