FAIR VALUE OF FINANCIAL INSTRUMENTS

6 Months Ended

Jun. 30, 2023

FAIR VALUE OF FINANCIAL INSTRUMENTS

FAIR VALUE OF FINANCIAL INSTRUMENTS

9.          FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company values its financial instruments based on the fair value hierarchy of valuation techniques for fair value measurements. Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2 inputs include quoted prices for similar assets and liabilities in active markets and inputs other than quoted prices observable for the asset or liability. Level 3 inputs are unobservable inputs for the asset or liability. If the technique used to measure fair value includes inputs from multiple levels of the fair value hierarchy, the lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy.

The Company uses Level 1 inputs for the fair values of its cash, cash equivalents, restricted cash and cash in the CCF, and Level 2 inputs for its variable and fixed rate debt. The fair values of cash, cash equivalents, restricted cash and cash on deposit in the CCF, and variable rate debt approximate their carrying values due to the nature of the instruments. The fair value of fixed rate debt is calculated based upon interest rates available for debt with terms and maturities similar to the Company’s existing debt arrangements.

The carrying value and fair value of the Company’s financial instruments as of June 30, 2023 and December 31, 2022 are as follows:

					Quoted Prices in		Significant		Significant
	Total				Active Markets		Observable		Unobservable
	Carrying Value		Total		(Level 1)		Inputs (Level 2)		Inputs (Level 3)
(In millions)	June 30, 2023		Fair Value Measurements at June 30, 2023
Cash and cash equivalents	$	122.0	$	122.0	$	122.0	$	—	$	—
Restricted cash	$	3.9	$	3.9	$	3.9	$	—	$	—
Capital Construction Fund	$	583.9	$	583.9	$	583.9	$	—	$	—
Fixed rate debt	$	462.4	$	377.6	$	—	$	377.6	$	—
(In millions)	December 31, 2022		Fair Value Measurements at December 31, 2022
Cash and cash equivalents	$	249.8	$	249.8	$	249.8	$	—	$	—
Restricted cash	$	3.9	$	3.9	$	3.9	$	—	$	—
Capital Construction Fund	$	518.2	$	518.2	$	518.2	$	—	$	—
Fixed rate debt	$	517.5	$	427.3	$	—	$	427.3	$	—