| Fair Value Measurements |
FAIR VALUE MEASUREMENTS Financial Instruments
Investments
Our investments in Kodiak and Standard Lithium are recorded in investments on our consolidated balance sheets based on the quoted market stock price (Level 1 fair value measurements). The stock component of consideration received from Standard Lithium is initially recorded as unearned income based on the quoted market price at the time the stock is received, then recognized in income over the contract term. Changes in the value of stock are recorded in other (income) expense, net in our consolidated statements of operations. We also hold investments in convertible notes, common units, and preferred units issued by two privately-held companies. Our investment in certain preferred units as of December 31, 2024 were recorded based on observable market-based inputs for preferred units issued to several investors during August through October 2024 (Level 2 fair value measurement). Our investment in convertible notes, common units, and certain preferred units are recorded in our consolidated financial statements based on internal valuations with assistance from a third-party valuation specialist (Level 3 fair value measurement). The valuations are impacted by key assumptions, including the assumed probability and timing of potential debt or equity offerings. One of the convertible notes includes an option to convert the note into equity interests. The change in the fair value of the embedded option, as well as the preferred units and common units, are included in other (income) expense, net in our consolidated statements of operations. The change in the fair value of the convertible note, excluding the embedded option, is included in other comprehensive income (loss) in our consolidated statements of comprehensive income.
The change in our investments for the three and six months ended June 30, 2025 and June 30, 2024 are as follows: | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended June 30, 2025 | | | Fair Value Measurements Using | | | Quoted Prices in Active Markets for Identical Assets or Liabilities | | | | Significant Unobservable Inputs | | | | | (Level 1) | | | | (Level 3) | | Total | | | (in thousands) | Investment balance at beginning of period | | $ | 1,016 | | | | | $ | 8,670 | | | $ | 9,686 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Unrealized gain (loss) on equity securities | | 552 | | | | | (191) | | | 361 | | Unrealized loss on embedded option | | — | | | | | (660) | | | (660) | | Unrealized loss on convertible note, excluding embedded option | | — | | | | | (416) | | | (416) | | Investment balance at end of period | | $ | 1,568 | | | | | $ | 7,403 | | | $ | 8,971 | |
| | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended June 30, 2024 | | | Fair Value Measurements Using | | | Quoted Prices in Active Markets for Identical Assets or Liabilities | | | | Significant Unobservable Inputs | | | | | (Level 1) | | | | (Level 3) | | Total | | | (in thousands) | | Investment balance at beginning of period | | $ | 13,148 | | | | | $ | 7,238 | | | $ | 20,386 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Unrealized gain on equity securities | | 131 | | | | | — | | | 131 | | | Unrealized loss on embedded option | | — | | | | | (85) | | | (85) | | | Unrealized loss on convertible note, excluding embedded option | | — | | | | | (5) | | | (5) | | | Investment balance at end of period | | $ | 13,279 | | | | | $ | 7,148 | | | $ | 20,427 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Six Months Ended June 30, 2025 | | | Fair Value Measurements Using | | | Quoted Prices in Active Markets for Identical Assets or Liabilities | | Significant Other Observable Inputs | | Significant Unobservable Inputs | | | | | (Level 1) | | (Level 2) | | (Level 3) | | Total | | | (in thousands) | | Investment balance at beginning of period | | $ | 19,561 | | | $ | 1,388 | | | $ | 7,210 | | | $ | 28,159 | | | | | | | | | | | | Sale of investments | | (18,393) | | | — | | | — | | | (18,393) | | | Reclassification between Level 2 and Level 3 fair value | | — | | | (1,388) | | | 1,388 | | | — | | | Unrealized gain (loss) on equity securities | | 400 | | | — | | | (177) | | | 223 | | | Unrealized loss on embedded option | | — | | | — | | | (883) | | | (883) | | | Unrealized loss on convertible note, excluding embedded option | | — | | | — | | | (135) | | | (135) | | | Investment balance at end of period | | $ | 1,568 | | | $ | — | | | $ | 7,403 | | | $ | 8,971 | |
| | | | | | | | | | | | | | | | | | | | | | | | | Six Months Ended June 30, 2024 | | | Fair Value Measurements Using | | | Quoted Prices in Active Markets for Identical Assets or Liabilities | | | | Significant Unobservable Inputs | | | | | (Level 1) | | | | (Level 3) | | Total | | | (in thousands) | | Investment balance at beginning of period | | $ | 10,154 | | | | | $ | 7,200 | | | $ | 17,354 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Unrealized gain on equity securities | | 3,125 | | | | | — | | | 3,125 | | Unrealized loss on embedded option | | — | | | | | (284) | | | (284) | | Unrealized gain on convertible note, excluding embedded option | | — | | | | | 232 | | | 232 | | | Investment balance at end of period | | $ | 13,279 | | | | | $ | 7,148 | | | $ | 20,427 | |
Recurring fair value measurements by valuation hierarchy as of June 30, 2025 and December 31, 2024 are as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Fair Value Measurements Using | | | Total as of | | Quoted Prices in Active Markets for Identical Assets or Liabilities | | Significant Other Observable Inputs | | Significant Unobservable Inputs | | Description | | June 30, 2025 | | (Level 1) | | (Level 2) | | (Level 3) | | | (in thousands) | | | | | | | | | | | Investment in Standard Lithium | | $ | 1,568 | | | $ | 1,568 | | | $ | — | | | $ | — | | Other investments | | 7,403 | | | — | | | — | | | 7,403 | | | | | | | | | | | Total investments | | $ | 8,971 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Fair Value Measurements Using | | | Total as of | | Quoted Prices in Active Markets for Identical Assets or Liabilities | | Significant Other Observable Inputs | | Significant Unobservable Inputs | | Description | | December 31, 2024 | | (Level 1) | | (Level 2) | | (Level 3) | | | (in thousands) | | Investment in Kodiak | | $ | 18,393 | | | $ | 18,393 | | | $ | — | | | $ | — | | | Investment in Standard Lithium | | 1,168 | | | 1,168 | | | — | | | — | | Other investments | | 8,598 | | | — | | | 1,388 | | | 7,210 | | | | | | | | | | | Total investments | | $ | 28,159 | | | | | | | |
Other
The fair values of cash, restricted cash, accounts receivable, accounts payable, accrued liabilities, short-term borrowings and long-term debt approximate their carrying amounts. See Note 5 - “Long-Term Debt and Other Borrowings” for further discussion.
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