Fair Value Measurements

3 Months Ended

Mar. 31, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair Value Measurements

FAIR VALUE MEASUREMENTS

Financial Instruments

Investments

We retained an interest in CSI Compressco representing approximately 3.7% of CSI Compressco’s outstanding common units as of March 31, 2024. CSI Compressco was acquired by Kodiak on April 1, 2024. See Note 10 - “Subsequent Event” for further information. In December 2021, we invested in a $5.0 million convertible note issued by CarbonFree. In addition, we receive stock of Standard Lithium under the terms of our arrangements as noted in Note 4 - “Investments.”

Our investments in CSI Compressco and Standard Lithium are recorded in investments on our consolidated balance sheets based on the quoted market stock price (Level 1 fair value measurements). The stock component of consideration received from Standard Lithium was initially recorded as unearned income based on the quoted market price at the time the stock is received, then recognized in income over the contract term. Changes in the value of stock are recorded in other (income) expense, net in our consolidated statements of operations.

Our investment in convertible notes and common units issued by CarbonFree is recorded in our consolidated financial statements based on an internal valuation with assistance from a third-party valuation specialist (Level 3 fair value measurement). The valuation is impacted by key assumptions, including the assumed probability and timing of potential debt or equity offerings. The convertible note includes an option to convert the note into equity interests issued by CarbonFree. The change in the fair value of the embedded option is included in other (income) expense, net in our consolidated statements of operations. The change in the fair value of the convertible note, excluding the embedded option, and common units are included in other comprehensive income (loss) in our consolidated statements of comprehensive income.

The change in our investments for the three-month periods ended March 31, 2024 and 2023 are as follows:

	Three Months Ended March 31, 2024
	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Unobservable Inputs
	(Level 1)		(Level 3)		Total
	(in thousands)
Investment balance at beginning of period	$	10,154	$	7,200	$	17,354
Unrealized gain on equity securities	2,994		—		2,994
Unrealized loss on embedded option	—		(199)		(199)
Unrealized gain on convertible note, excluding embedded option	—		237		237
Investment balance at end of period	$	13,148	$	7,238	$	20,386
	Three Months Ended March 31, 2023
	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Unobservable Inputs
	(Level 1)		(Level 3)		Total
	(in thousands)
Investment balance at beginning of period	$	8,147	$	6,139	$	14,286
Unrealized loss on equity securities	(184)		—		(184)
Unrealized loss on embedded option	—		(321)		(321)
Unrealized gain on convertible note, excluding embedded option	—		121		121
Investment balance at end of period	$	7,963	$	5,939	$	13,902

Recurring fair value measurements by valuation hierarchy as of March 31, 2024 and December 31, 2023 are as follows:

			Fair Value Measurements Using
	Total as of		Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Other Observable Inputs		Significant Unobservable Inputs
Description	March 31, 2024		(Level 1)		(Level 2)		(Level 3)
	(in thousands)
Investment in CSI Compressco	$	12,204	$	12,204	$	—	$	—
Investment in CarbonFree	6,888		—		—		6,888
Investment in Standard Lithium	944		944		—		—
Other investments	350		—		—		350
Total investments	$	20,386

			Fair Value Measurements Using
	Total as of		Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Other Observable Inputs		Significant Unobservable Inputs
Description	December 31, 2023		(Level 1)		(Level 2)		(Level 3)
	(in thousands)
Investment in CSI Compressco	$	8,538	$	8,538	$	—	$	—
Investment in CarbonFree	6,850		—		—		6,850
Investment in Standard Lithium	1,616		1,616		—		—
Other investments	350		—		—		350
Investments	$	17,354

Other

The fair values of cash, restricted cash, accounts receivable, accounts payable, accrued liabilities, short-term borrowings and long-term debt approximate their carrying amounts. See Note 5 - “Long-Term Debt and Other Borrowings” for further discussion.