Fair Value Measurements

9 Months Ended

Sep. 30, 2022

NOTE 10 – FAIR VALUE MEASUREMENTS

The following table presents the carrying amount and fair values of the Company’s financial assets and liabilities measured on a recurring basis:


	September 30, 2022				December 31, 2021
(in millions)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Assets
Non-derivatives:
Cash and cash equivalents	$	100.5	$	100.5	$	141.8	$	141.8
Derivatives (Level 1 measurement):
Other current and non-current assets:
Emissions Trading Scheme credits		2.7		2.7		3.9		3.9

Liabilities
Non-derivatives:
Finance leases (including current portion)	$	—	$	—	$	0.1	$	0.1
Derivatives (Level 1 measurement):
Other current and non-current liabilities:
Foreign currency forward exchange contracts		0.8		0.8		1.2		1.2
Non-financial liabilities (Level 3 measurement):
Other current and non-current liabilities:
Stock equivalent units		24.1		24.1		17.3		17.3

The following methods and assumptions were used to estimate the fair values:

Cash and cash equivalents:

The carrying amount approximates fair value because of the short-term maturities of such instruments.

Emissions Trading Scheme credits:

The fair value is determined by the open market pricing at the end of the reporting period.

Derivatives:

The fair value of derivatives relating to foreign currency forward exchange contracts are derived from current settlement prices and comparable contracts using current assumptions. Foreign currency forward exchange contracts primarily relate to contracts entered into to hedge future known transactions or hedge balance sheet net cash positions. The movements in the carrying amounts and fair values of these contracts are largely due to changes in exchange rates against the U.S. dollar.

Finance leases:

Finance leases relate to certain fixed assets in our Fuel Specialties and Oilfield Services segments. The carrying amount of finance leases approximates to the fair value.

Stock equivalent units:

The fair values of stock equivalent units are calculated at each balance sheet date using either the Black-Scholes or Monte Carlo method depending on the terms of each grant.