Fair Value Measurements

9 Months Ended

Sep. 30, 2024

Fair Value Measurements

Fair Value Measurements

Note 7 Fair Value Measurements

Fair value is the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date (exit price). We utilize market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market-corroborated, or generally unobservable. We primarily apply the market approach for recurring fair value measurements and endeavor to utilize the best information available. Accordingly, we employ valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.

The use of unobservable inputs is intended to allow for fair value determinations in situations where there is little, if any, market activity for the asset or liability at the measurement date. We are able to classify fair value balances utilizing a fair value hierarchy based on the observability of those inputs.

Under the fair value hierarchy:

● Level 1 measurements include unadjusted quoted market prices for identical assets or liabilities in an active market;

● Level 2 measurements include quoted market prices for identical assets or liabilities in an active market that have been adjusted for items such as effects of restrictions for transferability and those that are not quoted but are observable through corroboration with observable market data, including quoted market prices for similar assets; and

● Level 3 measurements include those that are unobservable and of a subjective nature.

Recurring Fair Value Measurements

Our financial assets that are accounted for at fair value on a recurring basis as of September 30, 2024 and December 31, 2023 consisted of short-term investments and restricted cash held in trust. During the nine months ended September 30, 2024, there were no transfers of our financial assets between Level 1 and Level 2 measures. Our financial assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. As of September 30, 2024 and December 31, 2023, our restricted cash held in trust was carried at fair market value and totaled $328.0 million and $315.5 million, respectively, and consisted of Level 1 measurements. Our short-term investments were primarily held at fair market value and totaled $7.7 million and $12.7 million, respectively and primarily consisted of Level 2 measurements. No material Level 3 measurements existed for our financial assets for any of the periods presented.

Our financial liabilities that are accounted for at fair value on a recurring basis as of September 30, 2024 and December 31, 2023 consisted of the Warrants and are included in other long-term liabilities in the accompanying consolidated financial statements. As of September 30, 2024 and December 31, 2023, the Warrants were carried at fair market value using their trading price and totaled $13.4 million and $25.9 million, respectively.

Nonrecurring Fair Value Measurements

We applied fair value measurements to our nonfinancial assets and liabilities measured on a nonrecurring basis, which consist of measurements primarily related to equity method investments, other long-lived assets and assets acquired and liabilities assumed in a business combination. Based upon our review of the fair value hierarchy, the inputs used in these fair value measurements generally include Level 3 inputs but could include Level 1 and 2 inputs.

During the three months ended September 30, 2024, approximately $15.4 million was recognized as an other than temporary impairment related to our investment in Vast Renewables Limited (“Vast”). As Vast is a publicly traded company, the valuation assessment was based on the observable market trading price of Vast’s stock. During the third quarter, we determined that the fair value of our Vast investment was below carrying value for a prolonged period of time resulting in the impairment. This impairment has been included in Other, net in our consolidated statements of income (loss).

Fair Value of Debt Instruments

We estimate the fair value of our debt financial instruments in accordance with U.S. GAAP. The fair value of our long-term debt and revolving credit facilities is estimated based on quoted market prices or prices quoted from third-party financial institutions. The fair value of our debt instruments is determined using Level 2 measurements. The carrying and fair values of these liabilities were as follows:

		September 30, 2024				December 31, 2023
		Carrying		Fair		Carrying		Fair
		Value		Value		Value		Value
	(In thousands)
0.75% senior exchangeable notes due January 2024		$	—	$	—	$	155,529	$	154,989
5.75% senior notes due February 2025			—		—		474,092		474,120
7.25% senior guaranteed notes due January 2026			—		—		555,902		535,328
7.375% senior priority guaranteed notes due May 2027			700,000		702,086		700,000		687,526
7.50% senior guaranteed notes due January 2028			389,609		366,642		389,609		334,090
1.75% senior exchangeable notes due June 2029			250,000		196,743		250,000		185,383
9.125% senior priority guaranteed notes due January 2030			650,000		671,268		650,000		656,871
8.875% senior guaranteed notes due August 2031			550,000		523,523		—		—
		$	2,539,609	$	2,460,261	$	3,175,132	$	3,028,307
Less: current portion			—				629,621
Less: deferred financing costs			36,339				33,992
		$	2,503,270			$	2,511,519

The fair values of our cash equivalents, trade receivables and trade payables approximate their carrying values due to the short-term nature of these instruments.