Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements

v3.19.1
Fair Value Measurements
3 Months Ended
Mar. 31, 2019
Fair Value Disclosures [Abstract]  
Fair Value Measurements

8.

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 March 31, 2019 that are measured at fair value on a recurring basis were as follows (in thousands):

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

March 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

Construction reserve funds

 

$

28,109

 

 

$

 

 

$

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

Derivative instruments

 

 

 

 

 

2,295

 

 

 

 

Conversion Option Liability on Convertible Senior Notes

 

 

 

 

 

 

 

 

6,201

 

December 31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

Construction reserve funds

 

$

28,221

 

 

$

 

 

$

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

Derivative instruments

 

 

 

 

 

1,659

 

 

 

 

Conversion Option Liability on Convertible Senior Notes

 

 

 

 

 

 

 

 

5,276

 

 

Level 3 Measurement.  The fair value of the conversion option liability on the Convertible Senior Notes is estimated with significant inputs that are both observable and unobservable in the market and therefore is considered a Level 3 fair value measurement. The Company used a binomial lattice model that assumes the holders will maximize their value by finding the optimal decision between redeeming at the redemption price or converting into shares of Common Stock.  This model estimates the fair value of the conversion option as the differential in the fair value of the notes including the conversion option compared with the fair value of the notes excluding the conversion option.  The significant observable inputs used in the fair value measurement include the price of Common Stock and the risk-free interest rate. The significant unobservable inputs are the estimated Company credit spread and Common Stock volatility, which were based on comparable companies in the transportation and energy industries. 

The estimated fair values of the Company’s other financial assets and liabilities as of March 31, 2019 were as follows (in thousands):

 

 

 

 

 

 

 

Estimated Fair Value

 

 

 

Carrying

Amount

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

March 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash, cash equivalents and restricted cash

 

$

66,095

 

 

$

66,095

 

 

$

 

 

$

 

Investments, at cost, in 50% or less owned companies (included in other assets)

 

 

132

 

 

see below

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term debt, including current portion

 

 

401,770

 

 

 

 

 

 

387,937

 

 

 

 

December 31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash, cash equivalents and restricted cash

 

$

96,852

 

 

$

96,852

 

 

$

 

 

$

 

Investments, at cost, in 50% or less owned companies (included in other assets)

 

 

132

 

 

see below

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term debt, including current portion

 

 

404,666

 

 

 

 

 

 

388,949

 

 

 

 

 

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 analysis based on estimated current rates for similar types of arrangements. It was not practicable to estimate the fair value of certain 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. 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 had no other assets and liabilities that were measured at fair value, and recognized no impairment charges, during the three months ended March 31, 2019.