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Fair Value Measurements
 12 Months Ended
Dec. 31, 2024
Fair Value Disclosures [Abstract]  
Fair Value Measurements
13. Fair Value Measurements
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A three-level hierarchy prioritizes the inputs used to measure fair value as follows:
Level 1 — Quoted prices in active markets for identical assets or liabilities.
Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flows methodologies and similar techniques that use significant unobservable inputs.
Liabilities Measured at Fair Value on a Recurring Basis
Redeemable Noncontrolling Interest — Put Option
In November 2024, BioNova issued 111,111 preferred shares to SWEN in return for a redeemable noncontrolling interest of approximately 14 percent. The preferred shares contain an embedded put option that was determined should be bifurcated and recognized separately at fair value, with subsequent changes in fair value recorded in earnings. See Note 2—Significant Accounting Policies and Recent Accounting Developments for further information.
SWEN’s put option was initially measured at a fair value of $4 million and will be remeasured at the end of each reporting period. There was no meaningful change in the fair value of the put option as of December 31, 2024. The fair value of the put option was estimated using a Monte Carlo simulation model, which is a Level 3 measurement. The Monte Carlo simulation model included the following material assumptions based on observable and unobservable inputs:
December 31, 2024
Free cash flow to equity volatility(a)
52.0 %
Risk-free interest rateTerm structure of U.S. Treasury and Euro Government Bond securities
Weighted average cost of capital12.1 %
(a)The free cash flow to equity volatility is based on a peer group of companies in a similar or the same industry.
Assets Measured at Fair Value on a Nonrecurring Basis
Asset Impairment
In the third quarter of 2024, the Company recorded a $25 million non-cash impairment related to the Temiscaming High Purity Cellulose plant asset group. The fair value of the Temiscaming High Purity Cellulose plant assets was determined using discounted cash flows under the income approach from the perspective of a market participant assuming the highest and best use of the asset group. Discounted cash flows were estimated using key assumptions regarding production levels, price levels, profit margins, capital expenditures and discount rate, which are Level 3 measurements. See Note 3—Indefinite Suspension of Operations for further information on this impairment.
In the fourth quarter of 2023, the Company recorded a $62 million non-cash impairment related to the Temiscaming plant asset group. The fair value of the Temiscaming plant assets was determined using discounted cash flows under the income approach from the perspective of a market participant assuming the highest and best use of the asset group. Discounted cash flows were estimated using key assumptions regarding production levels, price levels, profit margins, capital expenditures and discount rate, which are Level 3 measurements. See Note 8—Property, Plant and Equipment, Net for further information on this impairment.
Financial Instruments
The carrying amounts of the Company’s cash, receivables and payables approximate fair value due to the short-term nature of those instruments. The carrying amount of borrowings outstanding under the ABL Credit Facility, 2029 Term Loan and short-term factoring facility approximate fair value due to their variable interest rates.
The fair value of the Company’s fixed rate debt is estimated using quoted market prices for debt with similar terms and maturities, which are Level 2 inputs, and was as follows:
December 31,
20242023
Carrying amount of fixed rate debt(a)
$75,142 $536,393 
Fair value of fixed rate debt75,272 497,563 
(a)Excludes finance lease obligations.