Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2023

We recognize our fair value estimates using a fair value hierarchy based on the inputs used to measure fair value. The fair value hierarchy has three levels based on reliability of inputs used to determine fair value as follows:

Level 1: Quoted market prices in active markets for identical assets and liabilities.

Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data

The carrying value and estimated fair value of our financial instruments at June 30, 2023 and December 31, 2022 were as follows:


		As at June 30, 2023		As at December 31, 2022
(In $ millions)	Hierarchy	Fair value	Carrying value	Fair value	Carrying value
Assets
Cash and cash equivalents (1)	1	83.8	83.8	108.0	108.0
Restricted cash (1)	1	—	—	2.5	2.5


Trade receivables (1)	1	53.9	53.9	43.0	43.0
Other current assets (1)	1	32.8	32.8	25.4	25.4
Due from related parties (1)	1	81.8	81.8	65.6	65.6

Non-current restricted cash (1)	1	—	—	8.0	8.0

Liabilities
Trade payables (1)	1	37.8	37.8	47.7	47.7
Accrued expenses (1)	1	90.6	90.6	80.8	80.8
Short term accrued interest and other items (1)	1	76.3	76.3	77.7	77.7
Other current liabilities (1)	1	43.5	43.5	36.2	36.2
Short-term debt (2)	1	107.9	107.9	100.8	100.8
Short-term debt (3)	2	—	—	330.8	350.0
Long-term debt (2)	1	1,295.5	1,295.5	1,177.7	1,177.7
Long-term debt (4)	2	247.5	250.0	—	—

(1) The carrying values approximate the fair values due to their near term expected receipt/payment of cash.

(2) Short-term and long-term debt excludes deferred charges and effective interest rate adjustments.

(3)This relates to our 3.875% convertible bonds which were due in May 2023 and which were fair valued using observable market-based inputs.

(4)This relates to our 5.00% convertible bonds due in 2028 which are fair valued using observable market-based inputs.

Share Lending Agreement

In addition, during the six months ended June 30, 2023, the Company recognized a deferred finance charge in the amount of $12.4 million in relation to our Share Lending Framework Agreement ("SFLA") , which was fair valued using observable market-based inputs and is amortized over the term of the $250.0 million Convertible Bonds. During the six months ended June 30, 2023, $1.0 million was amortized and recognized in "Other Financial Expenses, net" in the Unaudited Consolidated Statements of Operations. As at June 30, 2023, the current element of the unamortized deferred finance charge of $2.5 million and the non-current element of the unamortized deferred finance charge of $8.9 million are presented as a reduction to short-term and long-term debt, respectively, in the Unaudited Consolidated Balance Sheets (see Note 21 - Common Shares).

- 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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