Annual report pursuant to Section 13 and 15(d)

Fair Value Measurements (Tables)

v3.24.0.1
Fair Value Measurements (Tables)
 12 Months Ended
Dec. 31, 2023
Fair Value Disclosures [Abstract]  
Summary of Assets and Liabilities Measured at Fair Value on Recurring Basis

Our assets and liabilities measured at fair value on a recurring basis consist of the following:

 

 

Fair Value Measurements Using

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

December 31, 2023:

 

 

 

 

 

 

 

 

 

Assets — Investment in BPC

 

$

—

 

 

$

—

 

 

$

23.4

 

 

 

 

 

 

 

 

 

 

 

Liabilities — Munger make-whole provision

 

$

—

 

 

$

—

 

 

$

7.5

 

 

 

 

 

 

 

 

 

 

 

December 31, 2022:

 

 

 

 

 

 

 

 

 

Assets — Investment in BPC

 

$

—

 

 

$

—

 

 

$

53.6

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

REV earnout payment

 

$

—

 

 

$

—

 

 

$

6.6

 

Munger make-whole provision

 

 

—

 

 

 

—

 

 

 

0.4

 

Warrants

 

 

1.1

 

 

 

—

 

 

 

—

 

Total

 

$

1.1

 

 

$

—

 

 

$

7.0

 
Reconciliation of Recurring Level 3 Fair Value Measurements

The following is a reconciliation of our recurring Level 3 fair value measurements:

 

 

Year Ended December 31,

 

 

 

2023

 

 

2022

 

Balance at beginning of period

 

$

46.6

 

 

$

—

 

Acquisition of Flotek convertible notes

 

 

—

 

 

 

20.0

 

Election of fair value option for Investment in BPC

 

 

—

 

 

 

51.4

 

Change in Flotek fair value up to acquisition date

 

 

—

 

 

 

10.2

 

Elimination of Flotek convertible notes at acquisition date

 

 

—

 

 

 

(30.2

)

Recognition of Munger make-whole provision

 

 

—

 

 

 

(4.6

)

Recognition of REV earnout liability

 

 

—

 

 

 

(6.6

)

Change in fair value of Level 3 fair value measurements

 

 

(30.7

)

 

 

6.4

 

Balance at end of period

 

$

15.9

 

 

$

46.6

 
Fair Value Measurement Key Inputs

The key inputs into the Monte Carlo simulation used to estimate the fair value the Flotek Convertible Notes were as follows:

 

 

May 17,
2022

 

Risk-free interest rate

 

 

1.82

%

Expected volatility

 

 

90.0

%

Term until liquidation (years)

 

 

0.72

 

Stock price

 

$

1.29

 
Summary of Carrying Amounts and Fair Value of Financial Instruments

The carrying amounts of our financial instruments other than long-term debt approximate fair value because of the short-term nature of the items. The carrying amounts of our floating rate debt approximate fair value due to their variable interest rates. The fair value of our fixed rate debt, classified as Level 2 in the fair value hierarchy, was as follows:

 

 

December 31,

 

 

 

2023

 

 

2022

 

Carrying amount of fixed rate debt

 

$

74.7

 

 

$

142.7

 

Fair value of fixed rate debt

 

$

74.3

 

 

$

142.5