XML 26 R13.htm IDEA: XBRL DOCUMENT

Fair Value Measurements

6 Months Ended

Jun. 30, 2022

The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

Cash, cash equivalents and restricted cash—the carrying amounts reported in the Condensed Consolidated Balance Sheets for interest-bearing deposits approximate their fair value due to the short-term nature thereof.

Debt—the carrying values approximates fair values for bonds issued under the Convertible Bond Debt, which is traded on NASDAQ. The carrying amount of our term loan borrowing under the Global Ultraco Debt Facility approximates its fair value, due to its variable interest rates.

The Company defines fair value, establishes a framework for measuring fair value and provides disclosures about fair value measurements. The fair value hierarchy for disclosure of fair value measurements is as follows:

Level 1 – Quoted prices in active markets for identical assets or liabilities. Our Level 1 non-derivatives include cash, money-market accounts, restricted cash accounts and collateral on derivatives.

Level 2 – Quoted prices for similar assets and liabilities in active markets or inputs that are observable. Our Level 2 non-derivatives include our debt balances under the Convertible Bond Debt and the Global Ultraco Debt Facility. Freight forward agreements, bunker swaps and interest rate swaps are considered to be a Level 2 item as the Company, using the income approach to value the derivatives, uses observable Level 2 market inputs at measurement date and standard valuation techniques to convert future amounts to a single present amount assuming that participants are motivated, but not compelled to transact. See Note 5, Derivative Instruments.

Level 3 – Inputs that are unobservable (for example cash flow modeling inputs based on assumptions).

June 30, 2022


			Fair Value
(In thousands)	Carrying Value (7)		Level 1		Level 2
Assets
Cash and cash equivalents (1)	$	141,530	$	141,530	$	—
Collateral on derivatives	16,770		16,770		—
Fair value of derivative assets - current (2)	8,459		—		8,459
Fair value of derivative assets - noncurrent (3)	7,746		—		7,746
Liabilities
Global Ultraco Debt Facility (4)	262,650		—		262,650
Convertible Bond Debt (5)	114,119		—		199,698
Fair value of derivative liabilities - current (6)	269		—		269

December 31, 2021


			Fair Value
(In thousands)	Carrying Value (7)		Level 1		Level 2
Assets
Cash and cash equivalents (1)	$	86,222	$	86,222	$	—
Collateral on derivatives	15,081		15,081		—
Fair value of derivative assets - current (2)	4,669		—		4,669
Fair value of derivative assets - noncurrent (3)	3,112		—		3,112
Liabilities
Global Ultraco Debt Facility (4)	287,550		—		287,550
Convertible Bond Debt (5)	114,119		—		147,499
Fair value of derivative liabilities - current (6)	4,253		—		4,253

(1) Includes restricted cash (noncurrent) of $2.6 million at June 30, 2022 and $0.1 million at December 31, 2021.

(2) Includes $2.9 million of unrealized mark-to-market gains on bunker swaps, $0.4 million of unrealized mark-to-market gains on FFAs and $5.2 million of unrealized gains on our interest rate swaps as of June 30, 2022 and $4.7 million of unrealized mark-to-market gains on FFAs and bunker swaps as of December 31, 2021.

(3) Includes $7.7 million and $3.1 million of unrealized gains on our interest rate swaps as of June 30, 2022 and December 31, 2021, respectively.

(4) The fair value of the liabilities is based on the required repayment to the lenders if the debt was discharged in full on June 30, 2022 and December 31, 2021.

(5) The fair value of the Convertible Bond Debt is based on the last trade on May 9, 2022 and December 16, 2021 on Bloomberg.com.

(6) Includes $0.3 million of unrealized mark-to-market losses on FFAs and a de minimus amount of unrealized mark-to-market

losses on bunker swaps as of June 30, 2022 and $3.4 million of unrealized mark-to-market losses on FFAs and $0.9 million of unrealized losses on our interest rate swaps as of December 31, 2021.

(7) The outstanding debt balances represent the face value of the debt excluding debt discount and debt issuance costs.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details