Fair Value of Assets and Liabilities

9 Months Ended

Sep. 30, 2023

4. FAIR VALUE OF ASSETS AND LIABILITIES

The Company’s consolidated balance sheets reflect certain financial assets and liabilities at carrying value. The carrying value of certain debt instruments, if applicable, is net of unamortized discount. The following tables present the carrying values of those financial instruments and the estimated corresponding fair values at September 30, 2023 and December 31, 2022 (in thousands):


			Estimated Fair Value Measurements at September 30, 2023
	Carrying Value as of September 30, 2023		Total Fair Value		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	141,020	$	141,020	$	141,020	$	—	$	—
Restricted cash and investments		35,459		35,459		35,459		—		—
Liabilities:
Borrowings under exchange credit facility	$	982,749	$	999,504	$	—	$	999,504	$	—
10.500% Public Second Lien Notes due 2028		286,521		288,011		—		288,011		—
9.500% Private Second Lien Notes due 2028		239,142		233,972		—		233,972		—
5.875% Senior Notes due 2024		23,253		22,591		—		22,591		—
6.00% Senior Notes due 2026		110,858		131,943		—		131,943		—
6.50% Exchangeable Senior Notes due 2026		230,000		209,662		—		209,662		—


			Estimated Fair Value Measurements at December 31, 2022
	Carrying Value as of December 31, 2022		Total Fair Value		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	95,073	$	95,073	$	95,073	$	—	$	—
Restricted cash and investments		48,770		48,770		48,770		—		—
Liabilities:
Borrowings under exchange credit facility	$	1,113,239	$	1,112,183	$	—	$	1,112,183	$	—
10.500% Public Second Lien Notes due 2028		286,521		291,610		—		291,610		—
9.500% Private Second Lien Notes due 2028		239,142		232,627		—		232,627		—
5.875% Senior Notes due 2024		23,253		22,997		—		22,997		—
6.00% Senior Notes due 2026		110,858		99,132				99,132
6.50% Exchangeable Senior Notes due 2026		230,000		327,872		—		327,872		—

The fair values of the Company’s cash and cash equivalents, and restricted cash and investments approximates the carrying values of these assets at September 30, 2023 and December 31, 2022. Restricted cash consists of money market funds, bank deposits, commercial paper and time deposits used for asset replacement funds and other funds contractually required to be maintained at the Company's Australian subsidiary. The fair value of the money market funds and bank deposits is based on quoted market prices (Level 1).

As of September 30, 2023, the recurring fair values of the Company's 10.500% Public Second Lien Notes due 2028 and the 9.500% Private Second Lien Notes due 2028 are based on Level 2 inputs using quotations by major market news services, such as Bloomberg. The fair value of the Company's exchange credit facility was also based on quotations by major market new services and also estimates of trading value considering the Company's borrowing rate, the undrawn spread and similar instruments.

As of September 30, 2023 and December 31, 2022, the fair values of the Company's 5.875% senior unsecured notes due 2024 ("5.875% Senior Notes due 2024"), 6.00% senior unsecured notes due 2026 (“6.00% Senior Notes”), and the 6.50% exchangeable senior unsecured notes due 2026 (“Convertible Notes” or “6.50% Exchangeable Notes due 2026”) are based on Level 2 inputs by major market news services.

- 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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