Fair Value Measurement (Tables)

3 Months Ended

Mar. 31, 2025

Financial Assets and Liabilities Accounted for at Fair Value on Recurring Basis

The following tables set forth our financial assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2025 and December 31, 2024 (in thousands):


	March 31, 2025		Quoted Prices in Active Markets for Identical Items (Level 1)		Quoted Prices in Active Markets for Similar Items (Level 2)		Unobservable Inputs (Level 3)

Assets:
Available for sale debt securities(a)	$	320,388	$	—	$	—	$	320,388
Investments under executive deferred compensation plan(b)	$	34,552	$	34,552	$	—	$	—
Public equity securities(c)	$	12,889	$	12,889	$	—	$	—
Private equity securities measured at net asset value(d)(e)	$	4,482	$	—	$	—	$	—
Derivative financial instruments(f)	$	5,557	$	—	$	5,557	$	—

Liabilities:
Obligations under executive deferred compensation plan(b)	$	34,552	$	34,552	$	—	$	—
Derivative financial instruments(f)	$	10,738	$	—	$	10,738	$	—


	December 31, 2024		Quoted Prices in Active Markets for Identical Items (Level 1)		Quoted Prices in Active Markets for Similar Items (Level 2)		Unobservable Inputs (Level 3)

Assets:
Available for sale debt securities(a)	$	313,991	$	—	$	—	$	313,991
Investments under executive deferred compensation plan(b)	$	38,243	$	38,243	$	—	$	—
Public equity securities(c)	$	17,910	$	17,910	$	—	$	—
Private equity securities measured at net asset value(d)(e)	$	4,472	$	—	$	—	$	—
Derivative financial instruments(f)	$	4,347	$	—	$	4,347	$	—

Liabilities:
Obligations under executive deferred compensation plan(b)	$	38,243	$	38,243	$	—	$	—
Derivative financial instruments(f)	$	11,352	$	—	$	11,352	$	—

(a)Preferred equity of a Grace subsidiary acquired as a portion of the proceeds of the FCS sale on June 1, 2021. A third-party estimate of the fair value was prepared using expected future cash flows over the period up to when the asset is likely to be redeemed, applying a discount rate that appropriately captures a market participant's view of the risk associated with the investment. These are considered to be Level 3 inputs.

(b)We maintain an Executive Deferred Compensation Plan (“EDCP”) that was adopted in 2001 and subsequently amended. The purpose of the EDCP is to provide current tax planning opportunities as well as supplemental funds upon the retirement or death of certain of our employees. The EDCP is intended to aid in attracting and retaining employees of exceptional ability by providing them with these benefits. We also maintain a Benefit Protection Trust (the “Trust”) that was created to provide a source of funds to assist in meeting the obligations of the EDCP, subject to the claims of our creditors in the event of our insolvency. Assets of the Trust are consolidated in accordance with authoritative guidance. The assets of the Trust consist primarily of mutual fund investments (which are accounted for as trading securities and are marked-to-market on a monthly basis through the consolidated statements of income) and cash and cash equivalents. As such, these assets and obligations are classified within Level 1.

(c)Holdings in equity securities of public companies reported in Investments in the consolidated balance sheets. The fair value is measured using publicly available share prices of the investments, and as a result these balances are classified within Level 1. Any changes are reported in Other income, net in our consolidated statements of income. See Note 3, “Investments,” for further details.

(d)Primarily consists of private equity securities reported in Investments in the consolidated balance sheets. The changes in fair value are reported in Other income, net in our consolidated statements of income.

(e)Holdings in certain private equity securities are measured at fair value using the net asset value per share (or its equivalent) practical expedient and have not been categorized in the fair value hierarchy.

(f)The derivative financial instruments are primarily comprised of foreign currency forward contracts. As a result of our global operating and financing activities, we are exposed to market risks from changes in foreign currency exchange rates which may adversely affect our operating results and financial position. When deemed appropriate, we minimize our risks from foreign currency exchange rate fluctuations through the use of foreign currency forward contracts. The foreign currency forward contracts are valued using broker quotations or market transactions in either the listed or over-the-counter markets. As such, these derivative instruments are classified within Level 2. See Note 14, “Fair Value of Financial Instruments,” for further details about our foreign currency forward contracts.

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

The following table sets forth the reconciliation of the beginning and ending balance for the Level 3 recurring fair value measurements (in thousands):


	Available for Sale Debt Securities
Beginning balance at December 31, 2024	$	313,991
PIK dividends	9,769
Cash received for tax liability	(3,372)


Ending balance at March 31, 2025	$	320,388

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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