XML 33 R21.htm IDEA: XBRL DOCUMENT v3.24.3
Fair Value Measurements
 9 Months Ended
Sep. 30, 2024
Fair Value Disclosures [Abstract]  
Fair Value Measurements FAIR VALUE MEASUREMENTS
Financial assets and liabilities measured at fair value on a recurring basis in the Company's consolidated financial statements as of September 30, 2024 and December 31, 2023 are summarized by type of inputs applicable to the fair value measurements as follows:
September 30, 2024Level 1Level 2Level 3Total
Assets:
Long-term investments (a)
$48,861 $5,568 $4,842 $59,271 
Precious metal and commodity inventories recorded at fair value
49,355 — — 49,355 
Economic interests in loans (b)
— — 5,207 5,207 
Warrants (c)
— — 1,436 1,436 
Total$98,216 $5,568 $11,485 $115,269 
Liabilities:
Commodity contracts on precious metal and commodity inventories
$— $53 $— $53 
Other precious metal liabilities$41,022 $— $— $41,022 
Total$41,022 $53 $— $41,075 

December 31, 2023Level 1Level 2Level 3Total
Assets:
Long-term investments (a)
$15,965 $447 $5,746 $22,158 
Precious metal and commodity inventories recorded at fair value
35,361 — — 35,361 
Economic interests in loans (b)
— — 4,903 4,903 
Commodity contracts on precious metal and commodity inventories
— 75 — 75 
Warrants (c)
— — 1,436 1,436 
Total$51,326 $522 $12,085 $63,933 
Liabilities:
Commodity contracts on precious metal and commodity inventories
$— $25 $— $25 
Other precious metal liabilities 30,958 — — 30,958 
Total$30,958 $25 $— $30,983 
(a)    For additional details of the long-term investments, see Note 7 – "Investments." The investment in PCS-Mosaic of $19,058 and $19,067 as of September 30, 2024 and December 31, 2023, respectively, is not included in the fair value leveling tables as it is valued at cost.
(b)    For additional details of the economic interests in loans, see Note 9 – "Financial Instruments".
(c)     Included within Other non-current assets in the Company's consolidated balance sheets.

During the three and nine months ended September 30, 2024, $5,075 of assets, were transferred from Level 1 to Level 2, due to being delisted from the London Stock Exchange. There were no level changes during the three and nine months ending September 30, 2023.

Level 1 inputs are quoted prices in active markets for identical assets or liabilities as of the measurement date ("Level 1").

Level 2 inputs may include quoted prices in active markets for similar assets or liabilities, quoted prices in a market that is not active for identical assets or liabilities, or other inputs that can be corroborated by observable market data ("Level 2").

Level 3 inputs are unobservable for the asset or liability when there is little, if any, market activity for the asset or liability. Level 3 inputs are based on the best information available and may include data developed by the Company ("Level 3").

The fair value of the Company's financial instruments, such as cash and cash equivalents, trade and other receivables and accounts payable, approximates carrying value due to the short-term maturities of these assets and liabilities. Carrying cost approximates fair value for long-term debt, which has variable interest rates.

The precious metal and commodity inventories associated with the Company's fair value hedges (see Note 9 - "Financial Instruments") are reported at fair value. Fair values of these inventories are based on quoted market prices on commodity exchanges and are considered Level 1 measurements. The derivative instruments that the Company purchases in connection with its precious metal and commodity inventories, specifically commodity futures and forward contracts, are also
valued at fair value. The futures contracts are Level 1 measurements since they are traded on a commodity exchange. The forward contracts are entered into with a counterparty and are considered Level 2 measurements.

Following is a summary of changes in financial assets measured using Level 3 inputs:
Long Term Investments (a)
Economic Interests in Loans (b)
Warrants (b)
Total
Balance as of December 31, 2023
$5,746 $4,903 $1,436 $12,085 
Purchases
373 — — 373 
Sales, cash collections, and eliminations(49)(3,883)— (3,932)
Realized gains— 4,187 — 4,187 
Unrealized losses
(1,228)— — (1,228)
Balance as of September 30, 2024
$4,842 $5,207 $1,436 $11,485 
Balance as of December 31, 2022
$52,336 $5,728 $3,564 $61,628 
Purchases
589 — — 589 
Sales, cash collections, and eliminations(49,521)(4,393)— (53,914)
Realized gains
(5)3,763 — 3,758 
Unrealized gains
106 — — 106 
Balance as of September 30, 2023
$3,505 $5,098 $3,564 $12,167 
(a)    Unrealized gains and losses are recorded in Loss of associated companies, net of taxes in the Company's consolidated statements of operations.
(b)    Realized and unrealized gains and losses are recorded in Realized and unrealized losses (gains) on securities, net or Financial Services revenue in the Company's consolidated statements of operations.

Long-Term Investments - Valuation Techniques

The Company estimated the value of its investment in the STCN Note as of March 31, 2023 using a Binomial Lattice Model. Key inputs in the valuation included the trading price and volatility of STCN's common stock, the risk-free rate of return, as well as the dividend rate, conversion price, and maturity date. The fair value of the Company’s investment in STCN preferred stock as of March 31, 2023 was its par value because the Company has the right to redeem and the issuer has the right to convert the instrument at the redemption value. The Company's investments in the STCN Note and STCN preferred stock were remeasured as of the date of the Exchange Transaction. The Company's investment in Steel Connect as of March 31, 2023 was eliminated as the Company's ownership of Steel Connect increased to 84.0% on May 1, 2023, as discussed in Note 3 - "Acquisitions and Divestitures".

Marketable Securities and Other - Valuation Techniques

The Company determines the fair value of certain corporate securities and corporate obligations by incorporating and reviewing prices provided by third-party pricing services based on the specific features of the underlying securities.

The Company uses the net asset value included in quarterly statements it receives in arrears from a venture capital fund to determine the fair value of such fund and determines the fair value of certain corporate securities and corporate obligations by incorporating and reviewing prices provided by third-party pricing services based on the specific features of the underlying securities. The fair value of the derivatives held by WebBank (see Note 9 - "Financial Instruments") represent the estimated amounts that WebBank would receive or pay to terminate the contracts at the reporting date and is based on discounted cash flow analyses that consider credit, performance and prepayment. Unobservable inputs used in the discounted cash flow analyses are: a constant prepayment rate of 8.82% to 35.95%, a constant default rate of 1.72% to 21.50% and a discount rate of 1.82% to 25.41%.

Assets Measured at Fair Value on a Nonrecurring Basis

The Company's non-financial assets and liabilities measured at fair value on a non-recurring basis, include goodwill and other intangible assets, any assets and liabilities acquired in a business combination, or its long-lived assets written down to fair value. To measure fair value for such assets and liabilities, the Company uses techniques including an income approach, a market approach and/or appraisals (Level 3 inputs). The income approach is based on a discounted cash flow analysis ("DCF") and calculates the fair value by estimating the after-tax cash flows attributable to an asset or liability and then discounting the after-tax cash flows to a present value using a risk-adjusted discount rate. Assumptions used in the DCF require the exercise of significant judgment, including judgment about appropriate discount rates and terminal values, growth rates and the amount and timing of expected future cash flows. The discount rates, which are intended to reflect the risks inherent in future cash flow
projections, used in the DCF are based on estimates of the weighted-average cost of capital of a market participant. Such estimates are derived from analysis of peer companies and consider the industry weighted-average return on debt and equity from a market participant perspective. A market approach values a business by considering the prices at which shares of capital stock, or related underlying assets, of reasonably comparable companies are trading in the public market or the transaction price at which similar companies have been acquired. If comparable companies are not available, the market approach is not used.