

2.	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 December 31 that are measured at fair value on a recurring basis were as follows (in thousands):



	Level 1		Level 2		Level 3
2013
ASSETS
Marketable securities⁽¹⁾	$	24,292	$	—	$	—
Derivative instruments (included in other receivables)	185		6,072		—
Construction reserve funds and Title XI reserve funds	261,739		—		—
LIABILITIES
Short sales of marketable securities	10,697		—		—
Derivative instruments (included in other current liabilities)	1,511		1,828		—
2012
ASSETS
Marketable securities⁽¹⁾	$	21,688	$	—	$	—
Derivative instruments (included in other receivables)	2,840		4,696		—
Construction reserve funds and Title XI reserve funds	195,629		—		—
LIABILITIES
Short sales of marketable securities	8,277		—		—
Derivative instruments (included in other current liabilities)	840		6,140		—

______________________

(1)

Marketable security gains (losses), net include gains of $5.8 million and losses of $0.7 million and $7.5 million for the years ended December 31, 2013, 2012 and 2011, respectively, related to marketable security positions held by the Company as of December 31, 2013. Marketable security gains (losses), net include losses of $0.9 million and $7.7 million for the years ended December 31, 2012 and 2011, respectively, related to marketable security positions held by the Company as of December 31, 2012. During the years ended December 31, 2013, 2012 and 2011, the Company recorded net dividend expense on marketable securities of $0.2 million, $0.5 million and $0.8 million, respectively. During the year ended December 31, 2013, net interest income on marketable securities was not material. During the years ended December 31, 2012 and 2011, the Company recorded net interest income on marketable securities of $0.2 million and $2.8 million, respectively.

The estimated fair value of the Company’s other financial assets and liabilities as of December 31 were as follows (in thousands).



			Estimated Fair Value
	Carrying Amount		Level 1		Level 2		Level 3
2013
ASSETS
Cash, cash equivalents and restricted cash	$	539,610	$	539,610	$	—	$	—
Investments, at cost, in 50% or less owned companies (included in other assets)	9,315		see below
Notes receivable from third parties (included in other receivables and other assets)	13,544		see below
LIABILITIES
Long-term debt, including current portion⁽¹⁾	879,441		—		1,094,193		—
2012
ASSETS
Cash, cash equivalents and restricted cash	276,489		276,489		—		—
Investments, at cost, in 50% or less owned companies (included in other assets)	9,315		see below
Notes receivable from third parties (included in other receivables and other assets)	26,063		see below
LIABILITIES
Long-term debt, including current portion⁽²⁾	677,229		—		747,973		—

______________________


(1)	The estimated fair value includes the conversion option on the Company's 2.5% and 3.0% Convertible Notes.


(2)	The estimated fair value includes the conversion option on the Company's 2.5% Convertible Notes.

The carrying value of cash, cash equivalents and restricted cash 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 analyses based on estimated current rates for similar types of arrangements. It was not practicable to estimate the fair value of the Company’s investments, at cost, in 50% or less owned companies because of the lack of quoted market prices and the inability to estimate fair value without incurring excessive costs. It was not practicable to estimate the fair value of the Company’s notes receivable from third parties as the overall returns are uncertain due to certain provisions for additional payments contingent upon future events. 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.

The Company’s non-financial assets and liabilities that were measured at fair value during the years ended December 31 were as follows (in thousands):



	Level 1		Level 2		Level 3
2013
ASSETS
Long-lived assets under construction⁽¹⁾	$	17,494	$	—	$	—
Investment in C-Lift LLC⁽²⁾	—		13,290		—
Contribution of non-cash consideration to Dorian LPG Ltd.⁽³⁾	—		14,989		—
Investment in Zhuhai SEACOR/Avion Logistics Company Limited (included in Investments, at Equity, and Advances to 50% or Less Owned Companies)⁽⁴⁾	—		924		—
2012
ASSETS
Investment in ICP⁽⁵⁾	$	—	$	30,916	$	—
Long-lived assets held for sale⁽⁶⁾	—		8,400		—
Investment in Witt O'Brien's (included in Investments, at Equity, and Advances to 50% or Less Owned Companies)⁽⁷⁾	—		50,261		—

______________________


(1)	During the year ended December 31, 2013, the Company recognized impairment charges of $3.0 million related to two of Shipping Services' harbor tugs while under construction, which were sold and leased back upon their completion (see Note 4).


(2)	During the year ended December 31, 2013, the Company marked its equity investment in C-Lift LLC ("C-Lift") to fair value following its acquisition of a controlling interest (see Note 4). The investment's fair value was determined based on the Company's purchase price of the acquired interest.


(3)	During the year ended December 31, 2013, the Company marked to fair value the non-cash consideration contributed to Dorian LPG Ltd. ("Dorian") in exchange for an equity investment (see Note 5). The fair value was determined based on the value of the equity investment the Company received.

(4)

During the year ended December 31, 2013, the Company marked its equity investment in Zhuhai SEACOR/Avion Logistics Company Limited, an Asian industrial aviation company, to fair value upon the deconsolidation of the previously controlled subsidiary following the sale of a portion of the Company's ownership to a third party. The investment's fair value was determined based on the purchase price of the Company's interest sold.


(5)	On February 1, 2012, the Company marked its equity investment in its ICP to fair value following the acquisition of a controlling interest (see Note 5). The investment's fair value was determined based on a fair value analysis of the assets and liabilities of ICP.


(6)	During the year ended December 31, 2012, the Company recorded an impairment loss of $1.2 million to reduce the carrying value of one of its fixed-wing aircraft used in its lending and leasing activities following the conclusion of a lease.


(7)	On December 31, 2012, the Company marked its equity investment in Witt O'Brien's LLC, a response management company, to fair value following the ORM Transaction (see Note 5). The investment's fair value was determined based the Company's interest in the fair value of the assets and liabilities of Witt O'Brien's.