FAIR VALUE OF FINANCIAL INSTRUMENTS, DERIVATIVES AND FAIR VALUE DISCLOSURES (Tables)

9 Months Ended

Sep. 30, 2022

FAIR VALUE OF FINANCIAL INSTRUMENTS, DERIVATIVES AND FAIR VALUE DISCLOSURES [Abstract]

The estimated fair values of the Company’s financial instruments, other than derivatives that are not measured at fair value on a recurring basis, categorized based upon the fair value hierarchy, are as follows:


(Dollars in thousands)	September 30, 2022		December 31, 2021		Fair Value Level
Cash and cash equivalents⁽¹⁾	$	175,525	$	98,933		Level 1
Short-term investments⁽²⁾		80,000		n/a		Level 1
$750 Million Facility Term Loan		(530,000)		n/a		Level 2
$390 Million Facility Term Loan		n/a		(191,050)		Level 2
$525 Million Facility Term Loan		n/a		(216,289)		Level 2
$525 Million Facility Revolving Loan		n/a		(44,193)		Level 2
$360 Million Facility Term Loan		n/a		(105,325)		Level 2
$360 Million Facility Revolving Loan		n/a		(38,889)		Level 2
Macquarie Credit Facility		(17,750)		(19,475)		Level 2
ING Credit Facility		(23,438)		(25,000)		Level 2
Ocean Yield Lease Financing		(348,466)		(370,305)		Level 2
BoComm Lease Financing		(52,841)		(9,608)		Level 2
Toshin Lease Financing		(16,028)		(16,995)		Level 2
Hyuga Lease Financing		(15,744)		n/a		Level 2
COSCO Lease Financing		(48,986)		(52,746)		Level 2
Kaiyo Lease Financing		(14,511)		n/a		Level 2
Kaisha Lease Financing		(14,622)		n/a		Level 2
8.5% Senior Notes		n/a		(25,940)		Level 1

(1)	Includes restricted cash of $1.1 million at September 30, 2022 and December 31, 2021, respectively.

(2)	Short-term investments consist of time deposits with original maturities of between 90 and 180 days.

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value


(Dollars in thousands)	Current portion of derivative asset		Long-term derivative assets		Current portion of derivative liabilities		Long-term derivative liabilities
September 30, 2022:
Derivatives designated as hedging instruments:
Interest rate swaps	$	4,801	$	6,252	$	—	$	—
Total	$	4,801	$	6,252	$	—	$	—

December 31, 2021:
Derivatives designated as hedging instruments:
Interest rate swaps	$	—	$	1,296	$	(2,539)	$	(757)
Total	$	—	$	1,296	$	(2,539)	$	(757)

Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Loss

The effect of cash flow hedging relationships recognized in other comprehensive income excluding amounts reclassified from accumulated other comprehensive income/(loss), including hedges of equity method investees, for the three and nine months ended September 30, 2022 and 2021 follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands)		2022		2021		2022		2021
Derivatives designated as hedging instruments:
Interest rate swaps	$	10,559	$	568	$	21,491	$	5,333

Other-than-insignificant financing element of derivatives:
Interest rate swaps		—		(435)		—		(1,351)
Total other comprehensive income	$	10,559	$	133	$	21,491	$	3,982

The effect of cash flow hedging relationships on the condensed consolidated statement of operations is presented excluding hedges of equity method investees. The effect of the Company’s cash flow hedging relationships on the condensed consolidated statement of operations for the three and nine months ended September 30, 2022 and 2021 follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands)		2022		2021		2022		2021
Derivatives designated as hedging instruments:
Interest rate swaps	$	261	$	1,293	$	(226)	$	3,558

Discontinued hedging instruments:
Interest rate swap		(708)		—		445		—

Other-than-insignificant financing element of derivatives:
Interest rate swaps		—		1,528		—		4,681
Total interest expense	$	(447)	$	2,821	$	219	$	8,239

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following table presents the fair values, which are pre-tax, for assets and liabilities measured on a recurring basis (excluding investments in affiliated companies):


(Dollars in thousands)	September 30, 2022		December 31, 2021		Fair Value Level
Derivative Assets (interest rate swaps)	$	11,053	$	1,296		Level 2⁽¹⁾
Derivative Liabilities (interest rate swaps)		—		(3,296)		Level 2⁽¹⁾

(1)

For the interest rate swaps, fair values are derived using valuation models that utilize the income valuation approach. These valuation models take into account contract terms such as maturity, as well as other inputs such as interest rate yield curves and creditworthiness of the counterparty and the Company.

Schedule of Fair Value, Assets and Liabilities Measured on Nonrecurring Basis

The following table summarizes the fair values of assets for which impairment charges were recognized for the nine months ended September 30, 2022:


(Dollars in thousands)		Fair Value		Level 2		Total Impairment Charges
Crude Tankers - Vessels held for sale ⁽¹⁾⁽²⁾	$	7,561	$	7,561	$	(1,019)
Product Carriers - Vessels held for sale^{(1) (2)}		9,850		9,850		(207)
Product Carriers - Vessels held for use ^{(1) (2)}		9,575		9,575		(471)

(1)

A pre-tax held for sale impairment charge of $1.0 million related to one Panamax in the Crude Tankers segment was recorded during the first quarter of 2022, including a charge of $0.9 million to write the value of the vessel down to its estimated fair value, and estimated costs to sell the vessel of $0.1 million. A pre-tax held for sale impairment charge of $0.2 million related to one MR in the Product Carriers segment was recorded during the first quarter of 2022, consisting of $0.2 million costs to sell the vessel. A pre-tax held for use impairment charge of $0.5 million related to one Handysize product carrier was recorded during the first quarter of 2022 to write the value of the vessel down to its estimated fair value.

(2)

Fair value measurement of $27.0 million at March 31, 2022 used to determine the impairments for the vessels was based upon a market approach, which considered the sale prices of the vessels based on the executed memoranda of agreements as discussed in Note 6, "Vessels." The sales prices are considered to be Level 2 because sales of vessels occur somewhat infrequently.