Fair Value Measurements

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements

8.FAIR VALUE MEASUREMENTS

The fair value of an asset or liability is the price that would be received to sell an asset or transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company utilizes a fair value hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value and defines three levels of inputs that may be used to measure fair value. Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs are observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, or inputs derived from observable market data. Level 3 inputs are unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities.

The Company’s financial assets and liabilities as of September 30, 2024 and December 31, 2023 that are measured at fair value on a recurring basis were as follows (in thousands):

September 30, 2024	Level 1		Level 2		Level 3
ASSETS
Derivative instruments	$	—	$	72	$	—
December 31, 2023
ASSETS
Derivative instruments	$	—	$	608	$	—

The fair value of the Company’s derivative instruments was estimated by utilizing a spot rate as of the measurement date provided by an independent third party.

The estimated fair values of the Company’s other financial assets and liabilities as of September 30, 2024 and December 31, 2023 were as follows (in thousands):

			Estimated Fair Value
September 30, 2024	Carrying Amount		Level 1		Level 2		Level 3
ASSETS
Cash, cash equivalents and restricted cash	$	37,864	$	37,864	$	—	$	—
LIABILITIES
Long-term debt, including current portion		300,930		—		297,861		—
December 31, 2023
ASSETS
Cash, cash equivalents and restricted cash	$	84,131	$	84,131	$	—	$	—
LIABILITIES
Long-term debt, including current portion		315,909		—		307,653		—

The carrying value of cash, cash equivalents, restricted cash and trade receivables approximates fair value. The fair value of the Company’s long-term debt was estimated based upon quoted market prices or by using discounted cash flow analysis based on estimated current rates for similar types of arrangements. Considerable judgment was required in developing certain of the estimates of fair value, and, accordingly, the estimates presented herein are not necessarily indicative of the amounts that the Company could realize in a current market exchange.

Property and equipment. During the nine months ended September 30, 2024, the Company recognized no impairment charges. During the year ended December 31, 2023, the Company recognized impairment charges totaling $0.7 million for one leased-in AHTS to adjust for indicative cash flows and the cost to return the vessel to its owner.