Note 14 - Fair Value

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Fair Value Disclosures [Text Block]

14. Fair Value

Fair value is the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy prioritizes the inputs used in measuring fair value into

three

broad levels as follows:

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

• Level 2 — Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

• Level 3 — Unobservable inputs based on our own assumptions.

The fair value of our derivative financial instruments by level is as follows:

	Fair Value at										Fair Value at
Asset / (Liability)	December 31, 2019										December 31, 2018
(dollars in thousands)	Level 1		Level 2			Level 3		Total			Level 1		Level 2			Level 3		Total
Commodity futures natural gas contracts	$	—	$	(839	)	$	—	$	(839	)	$	—	$	265		$	—	$	265
Interest rate swaps		—		(14,563	)		—		(14,563	)		—		(4,288	)		—		(4,288	)
Net derivative asset (liability)	$	—	$	(15,402	)	$	—	$	(15,402	)	$	—	$	(4,023	)	$	—	$	(4,023	)

The fair values of our commodity futures natural gas contracts is determined using observable market inputs. The fair value of our interest rate swaps are based on the market standard methodology of netting the discounted expected future variable cash receipts and the discounted future fixed cash payments. The variable cash receipts are based on an expectation of future interest rates derived from observed market interest rate forward curves. Since these inputs are observable in active markets over the terms that the instruments are held, the derivatives are classified as Level

2

in the hierarchy. We also evaluate Company and counterparty risk in determining fair values. The commodity futures natural gas contracts and interest rate swaps are hedges of either recorded assets or liabilities or anticipated transactions. Changes in values of the underlying hedged assets and liabilities or anticipated transactions are

not

reflected in the above table.

Financial instruments carried at cost on the Consolidated Balance Sheets, as well as the related fair values, are as follows:

		December 31, 2019				December 31, 2018
(dollars in thousands)	Fair Value Hierarchy Level	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Term Loan B	Level 2	$	375,800	$	304,398	$	380,200	$	362,141

The fair value of our Term Loan B has been calculated based on quoted market prices for the same or similar issues, and the fair value of our ABL Facility approximates carrying value due to variable rates. The fair value of our cash and cash equivalents, accounts receivable and accounts payable approximate their carrying value due to their short term nature.