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SEC Filings

10-Q
NN INC filed this Form 10-Q on 11/09/2017
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Table of Contents
            Fair Value Measurements at December 31, 2016  

Description

   December 31,
2016
     Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
     Significant Other
Observable Inputs
(Level 2)
     Significant
Unobservable
Inputs (Level 3)
 

Derivative asset - current

   $ 69      $ —        $ 69      $ —    

Derivative asset - noncurrent

     6        —          6        —    

Derivative liability - current

     (1,903      —          (1,903      —    

Derivative liability - noncurrent

     (1,028      —          (1,028      —    
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ (2,856    $ —        $ (2,856    $ —    
  

 

 

    

 

 

    

 

 

    

 

 

 

Our policy is to manage interest expense using a mix of fixed and variable rate debt. To manage this mix effectively, we may enter into interest rate swaps to exchange the difference between fixed and variable interest amounts.

The inputs for determining fair value of the interest rate swap are classified as Level 2 inputs. Level 2 fair value is based on estimates using standard pricing models. These standard pricing models use inputs which are derived from or corroborated by observable market data such as interest rate yield curves, index forward curves, discount curves, and volatility surfaces. Counterparties to these derivative contracts are highly rated financial institutions which management believes carry only a minimal risk of nonperformance.

We have elected to present the derivative contracts on a gross basis in the Condensed Consolidated Balance Sheets included within other current assets, other non-current assets, other current liabilities and other non-current liabilities. If the derivative contract were presented on a net basis, the derivative would reflect in a net liability position of $1.5 million as of September 30, 2017. We do not have any cash collateral due under such agreements.

As of September 30, 2017, we had no gains or losses in accumulated other comprehensive income related to the interest rate swap. Additionally, during the nine months ended September 30, 2016, when the interest rate swap was accounted for in accordance with hedge accounting, the periodic settlements and related reclassification of other comprehensive income was $1.4 million of net hedging losses on the interest rate swap in the interest expense line on the Condensed Consolidated Statements of Operations and Comprehensive Income. The “Derivative loss (gain) on change in interest rate swap fair value” line on the Condensed Consolidated Statements of Operations and Comprehensive Income includes interest rate swap settlements of $0.3 million and $1.3 million for the three-month and nine-month periods ended September 30, 2017, and $0.6 million for the three-month and nine-month periods ended September 30, 2016. Effective October 27, 2017, we terminated our interest rate swap with a cash payment of $1.3 million. Therefore, we classified all amounts related to the interest rate swap as current assets and current liabilities on our balance sheet as of September 30, 2017.

Note 14. Restructuring and Integration

We recognized restructuring and integration costs totaling $0.3 million and $0.4 million in the three-month and nine-month periods ended September 30, 2017. We recognized restructuring and integration costs totaling $0.6 million and $4.9 million in the three-month and nine-month periods ended September 30, 2016.

Within APC, certain restructuring programs that included the closure of one facility, the Wheeling Plant, resulted in a charge of $0.3 million and $0.4 million for the three-month and nine-month periods ended September 30, 2017, and $0.3 million and $3.9 million for the three-month and nine-month periods ended September 30, 2016.

Within PEP, initiatives resulted in integration, site closure and employee costs of $0.3 million and $1.0 million for the three-month and nine-month periods ended September 30, 2016. There were no charges in the three-month and nine-month periods ended September 30, 2017.

 

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