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Fair Value Measurements

12 Months Ended

Dec. 31, 2023

5. Fair Value Measurements

The carrying amounts of cash and cash equivalents, net accounts receivable, accounts payable and accrued expenses and other current liabilities approximate fair value based on their short-term maturities. With the exception of the Convertible Notes issued in June 2023, as discussed in Note 7. Debt, Interest Income, Expense, and Other Finance Costs, the carrying values of our debt and notes receivable approximate fair value as these instruments bear interest either at variable rates or fixed rates, which are not significantly different from market rates. The fair value measurements for our debt and notes receivable are considered to be Level 2 measurements based on the fair value hierarchy.

Recurring Fair Value Measurements

The following tables present information about our gross assets and liabilities that are measured at fair value on a recurring basis (in millions):


	Fair Value Measurements as of December 31, 2023
		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
Assets:
Commodities contracts		$	220.0	$	560.2	$	11.6	$	791.8
Interest rate contract		—		14.8		—		14.8
Foreign currency contracts		—		34.1		—		34.1
Cash surrender value of life insurance		—		16.5		—		16.5
Total assets at fair value		$	220.0	$	625.6	$	11.6	$	857.3

Liabilities:
Commodities contracts		$	322.1	$	345.3	$	1.8	$	669.1

Foreign currency contracts		—		28.7		—		28.7
Total liabilities at fair value		$	322.1	$	373.9	$	1.8	$	697.8


	Fair Value Measurements as of December 31, 2022
		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
Assets:
Commodities contracts		$	496.2	$	797.6	$	4.2	$	1,298.0
Interest rate contract		—		24.7		—		24.7
Foreign currency contracts		—		24.7		—		24.7
Cash surrender value of life insurance		—		14.4		—		14.4
Total assets at fair value		$	496.2	$	861.4	$	4.2	$	1,361.8

Liabilities:
Commodities contracts		$	497.4	$	951.2	$	3.4	$	1,452.1
Interest rate contract		—		—		—		—
Foreign currency contracts		—		38.7		—		38.7
Total liabilities at fair value		$	497.4	$	989.9	$	3.4	$	1,490.8

For our derivative contracts, we may enter into master netting, collateral and offset agreements with counterparties. These agreements provide us the ability to offset a counterparty's rights and obligations, request additional collateral when necessary, or liquidate the collateral in the event of counterparty default. We net the fair value of cash collateral paid or received against fair value amounts recognized for net derivative positions executed with the same counterparty under the same master netting or offset agreement.

We have elected to offset the recognized fair value amounts for multiple derivative instruments executed with the same counterparty in our financial statements when a legal right of offset exists. The following tables summarize those derivative balances subject to the right of offset as presented on our Consolidated Balance Sheets (in millions):


	Fair Value as of December 31, 2023
	Gross Amounts Recognized		Gross Amounts Offset		Net Amounts Presented		Cash Collateral		Gross Amounts Without Right of Offset		Net Amounts
Assets:
Commodities contracts	$	791.8	$	399.0	$	392.8	$	45.2	$	—	$	347.7
Interest rate contract	14.8		—		14.8		—		—		14.8
Foreign currency contracts	34.1		19.1		15.0		—		—		15.0
Total assets at fair value	$	840.7	$	418.0	$	422.7	$	45.2	$	—	$	377.5

Liabilities:
Commodities contracts	$	669.1	$	399.0	$	270.1	$	100.5	$	—	$	169.7

Foreign currency contracts	28.7		19.1		9.6		—		—		9.6
Total liabilities at fair value	$	697.8	$	418.0	$	279.7	$	100.5	$	—	$	179.2


	Fair Value as of December 31, 2022
	Gross Amounts Recognized		Gross Amounts Offset		Net Amounts Presented		Cash Collateral		Gross Amounts Without Right of Offset		Net Amounts
Assets:
Commodities contracts	$	1,298.0	$	756.8	$	541.1	$	79.3	$	—	$	461.9
Interest rate contract	24.7		—		24.7		—		—		24.7
Foreign currency contracts	24.7		20.9		3.8		—		—		3.8
Total assets at fair value	$	1,347.4	$	777.7	$	569.7	$	79.3	$	—	$	490.5

Liabilities:
Commodities contracts	$	1,452.1	$	755.6	$	696.4	$	243.1	$	—	$	453.3
Interest rate contract	—		—		—		—		—		—
Foreign currency contracts	38.7		22.1		16.7		—		—		16.7
Total liabilities at fair value	$	1,490.8	$	777.7	$	713.1	$	243.1	$	—	$	470.0

At December 31, 2023 and 2022, we did not present any amounts gross on our Consolidated Balance Sheets where we had the right to offset.

Concentration of Credit Risk

Our individual over-the-counter ("OTC") counterparty exposure is managed within predetermined credit limits and includes the use of cash-call margins when appropriate, thereby reducing the risk of significant nonperformance. At December 31, 2023, two of our counterparties with a total exposure of $129.2 million represented over 10% of our credit exposure to OTC derivative counterparties, for which we held cash collateral of $44.3 million.

Nonrecurring Fair Value Measurements

During the fourth quarter of 2023, we identified impairment indicators with respect to two of our investments as well as certain long-lived assets, as discussed below.

We identified an other-than-temporary impairment with respect to an equity method investment in a non-core business due to the inability of the investee to sustain an earning capacity at the pre-pandemic levels. The investment was written down to its fair value of $19.1 million (15.0 million GBP) as of December 31, 2023, resulting in the recognition of an impairment loss of $14.1 million during the three months ended December 31, 2023 and is recorded within Asset impairments on the Consolidated Statements of Income and Comprehensive Income and reported in our corporate segment. The fair value of the investment was measured using a combination of an income approach based on estimated future cash flows available to us as of the measurement date and a market approach using a selection of global companies comparable with the operations of the investee to derive market-based multiples. Due to the significance of unobservable inputs, including expected growth rates, the measurement is categorized as Level 3.

Additionally, we were notified that one of our investee's, accounted for as a cost method investment, is not able to raise capital and therefore intends to restructure its operations. As a result, the fair value of the investment was determined to be nominal and the investment was fully impaired. An impairment loss of $5.0 million was recognized during the three months ended December 31, 2023 and is recorded within Asset impairments on the Consolidated Statements of Income and Comprehensive Income and reported in our corporate segment. Due to the significance of unobservable inputs the measurement is categorized as Level 3.

The fair values of nonrecurring assets or liabilities measured using Level 3 inputs were not material as of December 31, 2022. The Flyers assets acquired and liabilities assumed were measured and recorded at their acquisition date fair values during the year ended December 31, 2022 as discussed in Note 3. Acquisitions.

During the fourth quarter of 2023 and the second quarter of 2021, we identified impairment indicators with respect to an asset group within the land segment. In each case, we determined that the carrying amount was not recoverable and recognized asset impairment charges of $2.2 million and $4.7 million during the years ended December 31, 2023 and 2021, respectively. The impairments are recorded within Asset impairments on the Consolidated Statements of Income and Comprehensive Income and reported in our land segment. The fair value of the asset group was measured using an income approach based on estimated future cash flows as of the measurement date. Due to the significance of unobservable inputs, the measurements are categorized as Level 3.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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