Note 16 - Fair Value Measurements

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Fair Value Disclosures [Text Block]

16. Fair Value Measurements

Accounting standards, among other things, define fair value, establish a framework for measuring fair value and expand disclosure about such fair value measurements. Assets and liabilities measured at fair value are based on

one

or more of

three

valuation techniques provided for in the standards.

The standards clarify that fair value is an exit price, representing the amount that would be received to sell an asset, based on the highest and best use of the asset, or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for evaluating such assumptions, the standards establish a

three

-tier fair value hierarchy, which prioritizes the inputs in measuring fair value as follows:

Level 1	Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. An active market is defined as a market in which transactions for the assets or liabilities occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2	Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active (markets with few transactions), inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that derived principally from or corroborated by observable market data correlation or other means (market corroborated inputs).
Level 3	Unobservable inputs, only used to the extent that observable inputs are not available, reflect the Company’s assumptions about the pricing of an asset or liability.

The following table summarizes liabilities measured at fair value at

December 

31,

2018

and

2017

(in thousands):

	2018
	Fair Value		Input Level
Liabilities
Forward Contract	$	1,793		3

	2017
	Fair Value		Input Level
Liabilities
Forward Contract	$	1,985		3

The following table summarizes the changes in the fair value of assets and liabilities measured at fair value using significant unobservable inputs (Level

3

) for the years ended

December 

31,

2018,

2017

and

2016

(in thousands):

	2018			2017			2016
Balance at beginning of year	$	1,985		$	2,683		$	4,000
Cash Settlement		-			-			2,200
Forward Contract Adjustment		(192	)		(698	)		883
Balance at end of year	$	1,793		$	1,985		$	2,683

During

2016,

the Company purchased a

5%

interest in Xpress Internacional for

$2.2

million and had a commitment to purchase the remaining

5%

interest

no

later than

2020,

based on an earnings calculation. The obligation was considered a physically settled forward contract and the commitment liability was included in other accrued liabilities and other long-term liabilities on the accompanying balance sheets. In

January 2019,

the Company disposed of its interest in Xpress Internacional and the commitment was reclassified to long term liabilities associated with assets held for sale at

December 31, 2018.

This liability is classified as Level

3

under the fair value hierarchy and is based on earnings calculation. The carrying amount of this commitment is accreted through interest to equal the settlement amount at each reporting date.

The carrying values of cash and cash equivalents, customer and other receivables and accounts payable are reasonable estimates of their fair values because of the short maturity of these financial instruments. Interest rates that are currently available to us for issuance of long-term debt with similar terms and remaining maturities are used to estimate the fair value of our long-term debt, which primarily consists of revenue equipment installment notes. The fair value of our revenue equipment installment notes approximated the carrying value at

December 31, 2018,

as the weighted average interest rate on these notes approximates the market rate for similar debt. Borrowings under our revolving Credit Facility approximate fair average interest rate on these notes approximates the market rate for similar debt.