Fair Value Measurement

9 Months Ended

Sep. 30, 2023

The following tables summarize significant assets and liabilities measured at fair value in the condensed consolidated balance sheets on a recurring basis for each of the fair value levels (in thousands):


	Fair Value Measurement at Reporting Date Using
September 30, 2023	Level 1		Level 2		Level 3		Total
Cash equivalents
Money market funds	$	61,321	$	—	$	—	$	61,321
Other current assets
Diesel collars	$	—	$	335	$	—	$	335
Commodity swaps	—		223		—		223
Total assets	$	61,321	$	558	$	—	$	61,879


December 31, 2022
Cash equivalents
Money market funds	$	99,806	$	—	$	—	$	99,806
Other current assets
Commodity swaps	—		121		—		121
Total assets	$	99,806	$	121	$	—	$	99,927

Commodity Derivatives

As of September 30, 2023 and December 31, 2022, we held commodity swaps for crude oil designated as cash flow hedges with a total outstanding notional amount of $1.6 million and $7.0 million, respectively, all maturing by October 31, 2023. The realized and unrealized gains associated with commodity swaps for the three and nine months ended September 30, 2023 were immaterial. The financial statement impact for the three and nine months ended September 30, 2022 was a realized gain of $1.2 million and $4.0 million, respectively. In addition, for the three months ended September 30, 2022, the commodity swaps had an unrealized loss of $2.6 million, and for the nine months ended September 30, 2022, the commodity swaps had an immaterial unrealized gain.

In the first three quarters of 2023, we entered into collar contracts to reduce our price exposure on diesel consumption. The collars were not designated as hedges and will be treated as a mark-to-market derivative instruments through their maturity dates. The financial statement impact for the three months ended September 30, 2023 was an unrealized gain of $1.3 million. The unrealized gain for the nine months ended September 30, 2023 and the realized gain for the three and nine months ended September 30, 2023 were immaterial.

Other Assets and Liabilities

The carrying values and estimated fair values of financial instruments that are not required to be recorded at fair value in the condensed consolidated balance sheets were as follows:


		September 30, 2023				December 31, 2022
(in thousands)	Fair Value Hierarchy	Carrying Value		Fair Value		Carrying Value		Fair Value
Assets:
Held-to-maturity marketable securities (1)	Level 1	$	37,028	$	36,150	$	65,943	$	64,584
Liabilities (including current maturities):
3.75% Convertible Notes (2)	Level 2	$	373,750	$	393,921	$	—	$	—
2.75% Convertible Notes (2)	Level 2	$	31,338	$	40,659	$	230,000	$	281,365
Credit Agreement - Revolver (2)	Level 3	$	—	$	—	$	50,000	$	49,536

(1) All marketable securities as of September 30, 2023 and December 31, 2022 were classified as held-to-maturity and consisted of U.S. Government and agency obligations maturing in two months to two years.

(2) The fair values of our 2.75% convertible senior notes due 2024 (the "2.75% Convertible Notes") and the 3.75% convertible senior notes due 2028 (the "3.75% Convertible Notes") are based on the median price of the notes in an active market. The fair value of the Fourth Amended and Restated Credit Agreement, as amended (the "Credit Agreement"), is based on borrowing rates available to us for long-term loans with similar terms, average maturities, and credit risk. See Note 14 for more information about the 2.75% Convertible Notes, 3.75% Convertible Notes and the Credit Agreement.

During the nine months ended September 30, 2023 and 2022, we did not record any fair value adjustments related to nonfinancial assets and liabilities measured at fair value on a nonrecurring basis.

- 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.

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