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Derivatives Hedges and Financial Instruments | 9 Months Ended
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Sep. 30, 2021
Derivative Instruments And Hedging Activities Disclosure [Abstract] |
Derivatives Hedges and Financial Instruments | 7. Derivatives, Hedges and Financial Instruments For the periods presented, the following significant instruments are accounted for on a fair value basis: Natural Gas Contracts Periodically, we entered into certain forward natural gas contracts (“natural gas contracts”), which are accounted for on a mark-to-market basis. We are utilizing these natural gas contracts as economic hedges for risk management purposes but are not designated as hedging instruments. At December 31, 2020, our natural gas contracts included 7.3 million MMBtu of natural gas, that extended through December 2021, but these contracts were settled during the first quarter of 2021, primarily due to the weather event discussed in Note 6. At September 30, 2021, we had no outstanding natural gas contracts. The valuations of the natural gas contracts are classified as Level 2. At December 31, 2020, the fair value of the natural gas contracts included approximately $0.1 million (classified as a current asset) and approximately $1.3 million (classified as a current liability). The valuation inputs included the contractual weighted-average cost of $2.65 per MMBtu and the weighted-average market value of $2.49 per MMBtu. 7. Derivatives, Hedges and Financial Instruments (continued) For the nine months ended September 30, 2021, we recognized a gain of $2.7 million (including a realized gain of $1.5 million), all of which was recognized in the first quarter. For the three and nine months ended September 30, 2020, we recognized a $0.5 million gain and a loss of $0.2, respectively. The gain is classified as a reduction of cost of sales and the loss is classified as cost of sales. Embedded Derivative As discussed in Note 2, the Series E Redeemable Preferred was exchanged for our common stock during September 2021. As a result, certain bifurcated embedded redemption features and participation rights value (“embedded derivative”) included as a part of the terms of the Series E Redeemable Preferred were extinguished. Prior to the completion of the Exchange Transaction, the embedded derivative was classified as a liability. At December 31, 2020, the fair value of the embedded derivative was approximately $1.0 million (classified as a noncurrent liability). We estimated that the contingent redemption features had fair value since we estimate that a portion of the shares of this preferred stock would be redeemed prior to October 25, 2023, the earliest redemption date by the holder. For certain other embedded features, we estimated no fair value based on our assessment that there was a remote probability that these features would be exercised. The fair value of the embedded derivative was valued using discounted cash flow models and primarily based on the difference in the present value of estimated future cash flows with no redemptions prior to October 25, 2023, compared to certain estimated redemptions during the same period and applying the effective dividend rate of the Series E Redeemable Preferred. At December 31, 2020, the fair value of the embedded derivative included the valuation of the participation rights, which was based on the equivalent of 303,646 shares of our common stock at $3.39 per share. The valuations of the embedded derivative were classified as Level 3. This derivative was valued using market information, management’s redemption assumptions, the underlying number of shares as defined in the terms of the Series E Redeemable Preferred, and the market price of our common stock. For the three and nine months ended September 30, 2021, we recognized a loss of approximately $1.1 million and $2.3 million (including a realized loss of $3.3 million), respectively, due to the change in fair value of the embedded derivative through the date of the Exchange Transaction. For the three and nine months ended September 30, 2020, we recognized an unrealized loss of approximately $0.1 million and an unrealized gain of approximately $0.6 million, respectively, due to the change in fair value of the embedded derivative. The gain and loss are included in non-operating other income and expense. There was no Level 3 transfer activity for the nine months ended September 30, 2021.

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 40 -Section 50 -Paragraph 5 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=123477628&loc=d3e90205-114008 + Details
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