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FAIR VALUE MEASUREMENTS AND INVESTMENTS | 9 Months Ended
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Sep. 30, 2024
FAIR VALUE MEASUREMENTS AND INVESTMENTS |
FAIR VALUE MEASUREMENTS AND INVESTMENTS | 6. FAIR VALUE MEASUREMENTS AND INVESTMENTS In accordance with the provisions of fair value accounting, a fair value measurement assumes that a transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability, and defines fair value based upon an exit price model. The fair value measurement guidance establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The guidance describes three levels of inputs that may be used to measure fair value: ​
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Level 1 | ​ | Quoted prices in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset and liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 assets and liabilities include money market funds, debt and equity securities and derivative contracts that are traded in an active exchange market. ​
​ | ​ | ​
Level 2 | ​ | Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange traded instruments and derivative contracts whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data. This category generally includes corporate obligations and non-exchange traded derivative contracts. ​
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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. Level 3 assets and liabilities include financial instruments and intangible assets that have been impaired whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.
​ Assets and liabilities of the Company measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023 are summarized as follows (in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | September 30, 2024
​ | ​ | Significant Other
​ | ​ | Quoted Prices in | ​ | Observable | ​ | Unobservable | ​ | ​ | ​
​ | ​ | Active Markets | ​ | Inputs | ​ | Inputs | ​ | ​ | ​
Description | ​ | (Level 1) | ​ | (Level 2) | ​ | (Level 3) | ​ | Total
Short term investments | ​ | $ | 310 | ​ | $ | — | ​ | $ | — | ​ | $ | 310
Employee benefit plan investments | ​ | ​ | 2,800 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 2,800
Interest rate swap | ​ | ​ | — | ​ | ​ | (1,962) | ​ | ​ | — | ​ | ​ | (1,962)
Alaska Communications redeemable common units | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Alloy redeemable common units (1) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (10,834) | ​ | ​ | (10,834)
Warrants on Alaska Communications redeemable common units | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (249) | ​ | ​ | (249)
Total assets and liabilities measured at fair value | ​ | $ | 3,110 | ​ | $ | (1,962) | ​ | $ | (11,083) | ​ | $ | (9,935)
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31, 2023
| ​ | Significant Other
​ | ​ | Quoted Prices in | ​ | Observable | ​ | Unobservable | ​ | ​ | ​
​ | ​ | Active Markets | ​ | Inputs | ​ | Inputs | ​ | ​ | ​
Description | ​ | (Level 1) | ​ | (Level 2) | ​ | (Level 3) | ​ | Total
Short term investments | ​ | $ | 300 | ​ | $ | — | ​ | $ | — | ​ | $ | 300
Other investments | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1,197 | ​ | ​ | 1,197
Employee benefit plan investments | ​ | ​ | 3,014 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 3,014
Interest rate swap | ​ | ​ | — | ​ | ​ | (1,750) | ​ | ​ | — | ​ | ​ | (1,750)
Alaska Communications redeemable common units | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (11,063) | ​ | ​ | (11,063)
Alloy redeemable common units (1) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (14,760) | ​ | ​ | (14,760)
Warrants on Alaska Communications redeemable common units | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (249) | ​ | ​ | (249)
Total assets and liabilities measured at fair value | ​ | $ | 3,314 | ​ | $ | (1,750) | ​ | $ | (24,875) | ​ | $ | (23,311)
​
| (1) | Represents redeemable common units in Alloy, Inc. (“Alloy”), the parent company of our operations in the western United States.
​ Other Investments The Company holds investments in equity securities consisting of noncontrolling investments in privately held companies. The investments are accounted for using equity method accounting, the measurement alternative for investments without a readily determinable fair value, or fair value. The fair value investments are valued using Level 3 inputs and the Company used the income approach to fair value the investment. The inputs consisted of a discount rate and future cash flows calculated based on the investment attributes. A roll forward of the investments is below (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Investments without a readily determinable fair value | ​ | Fair value investments | ​ | Equity method investments | ​ | Total
Balance, December 31, 2023 | ​ | $ | 41,710 | ​ | $ | 1,197 | ​ | $ | — | ​ | $ | 42,907
Income recognized | ​ | ​ | 47 | ​ | ​ | 195 | ​ | ​ | — | ​ | ​ | 242
Distributions | ​ | ​ | — | ​ | ​ | (602) | ​ | ​ | — | ​ | ​ | (602)
Sale of investment | ​ | ​ | — | ​ | ​ | (790) | ​ | ​ | — | ​ | ​ | (790)
Balance, September 30, 2024 | ​ | $ | 41,757 | ​ | $ | — | ​ | $ | — | ​ | $ | 41,757
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Balance, December 31, 2022 | ​ | $ | 22,590 | ​ | $ | 1,616 | ​ | $ | 13,963 | ​ | $ | 38,169
Income recognized | ​ | ​ | 2,430 | ​ | ​ | 229 | ​ | ​ | 93 | ​ | ​ | 2,752
Contributions / (distributions) | ​ | ​ | 425 | ​ | ​ | (567) | ​ | ​ | 630 | ​ | ​ | 488
Foreign currency gain | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 229 | ​ | ​ | 229
Reclassification of foreign currency losses | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1,349 | ​ | ​ | 1,349
Transfers | ​ | ​ | 16,264 | ​ | ​ | — | ​ | ​ | (16,264) | ​ | ​ | —
Balance, September 30, 2023 | ​ | $ | 41,709 | ​ | $ | 1,278 | ​ | $ | — | ​ | $ | 42,987
​ During the year ended December 31, 2023, the Company lost the ability to exert significant influence over its India solar investment. As a result, the Company transferred $16.3 million from equity method investments to investments without a readily determinable fair value and the accounting for the investment changed to the cost method from the equity method of accounting. These investments are included with other assets on the consolidated balance sheets. Redeemable Common Units and Warrants The Company has issued redeemable common units, and warrants to purchase additional common units, in consolidated subsidiaries of the Company. The instruments are redeemable at the option of the holder. Both the common units and warrants to purchase common units are recorded at fair value in the Company’s financial statements. The common units are recorded in redeemable noncontrolling interest and the warrants are recorded in other liabilities on the Company’s balance sheets. The put options for the Alloy redeemable common units begin in November 2026. The put options for the Alaska Communications redeemable common units begin the earlier of a public offering or July 2028. The Company calculates the fair value of the instruments using a combination of market and discounted cash flows approaches with Level 3 inputs. Other Fair Value Disclosures The carrying amounts of cash and cash equivalents, accounts receivable, and accounts payable and accrued expenses approximate their fair values because of the relatively short-term maturities of these financial instruments. The fair value of long-term debt is estimated using Level 2 inputs. At September 30, 2024, the fair value of long-term debt, including the current portion, was $575.6 million and its book value was $568.9 million. At December 31, 2023, the fair value of long-term debt, including the current portion, was $525.1 million and its book value was $516.9 million. The fair value of the customer receivable credit facility is estimated using Level 2 inputs. At September 30, 2024, the fair value of the customer receivable credit facility, including the current portion, was $45.3 million and its book value was $46.2 million. At December 31, 2023, the fair value of the customer receivable credit facility, including the current portion, was $46.5 million and its book value was $46.1 million.

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- 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. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 107 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-107 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 100 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-100 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (c)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2E -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 940 -SubTopic 820 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478119/940-820-50-1 + Details
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