Fair Value Measurement |
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| Fair Value Measurement | (3) Fair Value Measurement For assets and liabilities required to be reported at fair value, GAAP provides a hierarchy that prioritizes inputs to valuation techniques used to measure fair value into three broad levels. Level 1 inputs are quoted market prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs, other than quoted market prices included within Level 1, that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. The Company does not have any recurring assets or liabilities measured at fair value that would be considered Level 3. The Company’s assets and liabilities measured at fair value are as follows:
Level 2 cash equivalents are interest-bearing time deposits. These assets are not considered to be traded on “active markets,” as defined in GAAP. The fair value of debt and financial instrument liabilities, which includes forward contracts, is based on quoted market prices but is not considered to be traded on “active markets,” as defined by GAAP. Accordingly, those debt and financial instrument liabilities are reported in the foregoing table as Level 2 fair value. As of September 30, 2026, financial instrument liabilities are comprised of the 2025 Forward Contracts, as defined in note 6. The fair value of the 2025 Forward Contracts was derived from a Black-Scholes-Merton model using observable market data as the significant inputs. Realized and Unrealized Gains (Losses) on Financial Instruments, net Realized and unrealized gains (losses) on financial instruments, net are comprised of changes in the fair value of the following:
The Company uses the measurement alternative (defined as the cost of the security, adjusted for changes in fair value when there are observable prices, less impairments) for its equity securities without readily determinable fair values. For such securities the downward adjustments for the three months ended September 30, 2026 and 2025 were $1,465 thousand and zero, respectively, and downward adjustments for the nine months ended September 30, 2026 and 2025 were $1,518 thousand and $6,943 thousand, respectively, and the cumulative downward adjustments as of September 30, 2026 were $23,538 thousand. The upward adjustments for the three months ended September 30, 2026 and 2025 were not material, and upward adjustments for the nine months ended September 30, 2026 and 2025 were $2,074 thousand and not material, respectively, and the cumulative upward adjustments as of September 30, 2026 were $129,187 thousand. There were no impairments for the three and nine months ended September 30, 2026 and 2025, and cumulative impairments as of September 30, 2026 were $14,707 thousand. The Company elected to account for its exchangeable senior debentures (as described in note 6) using the fair value option. Changes in the fair value of the exchangeable senior debentures recognized in the condensed consolidated statements of operations are due to market factors primarily driven by changes in the risk-free rate and in the fair value of the underlying shares into which the debt is exchangeable. The Company isolates the portion of the unrealized gain (loss) attributable to changes in the instrument specific credit risk and recognizes such amount in other comprehensive earnings (loss). The change in the fair value of the exchangeable senior debentures attributable to changes in the instrument specific credit risk before tax was a gain of $4,666 thousand and a gain of $11,834 thousand for the three months ended September 30, 2026 and 2025, respectively, and a loss of $11,828 thousand and a gain of $8,234 thousand for the nine months ended September 30, 2026 and 2025, respectively. During the nine months ended September 30, 2026, the Company realized $10,404 thousand of previously unrealized losses related to the retirement of a portion of the Old Debentures (as defined in note 6) in Realized and unrealized gains (losses), net in the condensed consolidated statement of operations. The cumulative change since issuance was a gain of $715 thousand as of September 30, 2026, net of the realization of previously unrealized gains and losses. |
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