v3.25.2
Fair Value Measurements
 6 Months Ended
Jun. 30, 2025
Fair Value Disclosures [Abstract]  
Fair Value Measurements FAIR VALUE MEASUREMENTS
We measure certain assets and liabilities in accordance with ASC Topic 820, Fair Value Measurements and Disclosures, which defines fair value as the price that would be received for an asset, or paid to transfer a liability, in an orderly transaction between market participants on the measurement date. In addition, it establishes a framework for measuring fair value according to the following three-tier fair value hierarchy:
•Level 1 - Quoted prices for identical assets or liabilities in active markets accessible as of the measurement date;
•Level 2 - Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and
•Level 3 - Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
Financial Instruments
Our financial instruments include Cash and cash equivalents, Trade receivables, Notes and other receivables, Reimbursable receivables, Warehouse receivables, restricted cash, contract assets, Accounts payable, Reimbursable payables, Commercial paper, Short-term borrowings, contract liabilities, Warehouse facilities, Credit facility, Long-term debt and foreign currency forward contracts. The carrying amounts of Cash and cash equivalents, Trade receivables, Notes and other receivables, Reimbursable receivables, restricted cash, contract assets, Accounts payable, Reimbursable payables, contract liabilities and the Warehouse facilities approximate their estimated fair values due to the short-term nature of these instruments. The carrying values of our Credit facility, Commercial paper and Short-term borrowings approximate their estimated fair values given the variable interest rate terms and market spreads.
We estimated the fair value of our Long-term debt using dealer quotes that are Level 2 inputs in the fair value hierarchy. The fair value and carrying value of our debt are presented in the following table.
(in millions)June 30, 2025December 31, 2024
Long-term debt, fair value$838.0 785.2 
Long-term debt, carrying value, net of debt issuance costs805.3 756.7 
Investments at Fair Value - Net Asset Value ("NAV")
We report a significant portion of our investments at fair value. For such investments, we increase or decrease our investment each reporting period by the change in the fair value, and we report these fair value adjustments in our Consolidated Statements of Comprehensive Income within Equity earnings/losses.
For a subset of our investments reported at fair value, we estimate the fair value using the NAV per share (or its equivalent) our investees provide. Critical inputs to NAV estimates included valuations of the underlying real estate assets and borrowings, which incorporate investment-specific assumptions such as discount rates, capitalization rates, rental and expense growth rates, and asset-specific market borrowing rates. We did not consider any adjustments to NAV estimates provided by investees, including adjustments for any restrictions to the transferability of ownership interests embedded within investment agreements to which we are a party, to be necessary based upon (i) our understanding of the methodology utilized and inputs incorporated to estimate NAV at the investee level, (ii) consideration of market demand for the specific types of real estate assets held by each venture and (iii) contemplation of real estate and capital markets conditions in the localities in which these ventures operate. As of June 30, 2025 and December 31, 2024, investments at fair value using NAV were $495.1 million and $367.9 million, respectively. As these investments are not required to be classified in the fair value hierarchy, they have been excluded from the following table.
Recurring Fair Value Measurements
The following table categorizes by level in the fair value hierarchy the estimated fair value of our assets and liabilities measured at fair value on a recurring basis.
June 30, 2025December 31, 2024
(in millions)Level 1Level 2Level 3Level 1Level 2Level 3
Assets
Investments - fair value$45.5 — 293.1 43.8 — 330.3 
Foreign currency forward contracts receivable— 6.3 — — 4.9 — 
Warehouse receivables— 1,228.6 — — 770.7 — 
Deferred compensation plan assets— 674.9 — — 664.0 — 
Mortgage banking derivative assets— — 54.2 — — 161.1 
Total assets at fair value$45.5 1,909.8 347.3 43.8 1,439.6 491.4 
Liabilities
Foreign currency forward contracts payable$— 8.5 — — 13.9 — 
Deferred compensation plan liabilities— 658.5 — — 658.4 — 
Earn-out liabilities— — 19.1 — — 35.8 
Mortgage banking derivative liabilities— — 34.3 — — 67.3 
Total liabilities at fair value$— 667.0 53.4 — 672.3 103.1 
Investments
We classify one investment as Level 1 in the fair value hierarchy as a quoted price is readily available. We increase or decrease our investment each reporting period by the change in the fair value of the investment. We report the fair value adjustments in our Consolidated Statements of Comprehensive Income within Equity earnings/losses.
Investments classified as Level 3 in the fair value hierarchy represent investments in early-stage non-public entities where we elected the fair value option. For most of our investments, the carrying value was deemed to approximate fair value due to the proximity of the investment date, or date of most recent financing raise, to the balance sheet date, as well as consideration of investee-level performance updates. The fair value of certain investments is estimated using significant unobservable inputs which requires judgment due to the absence of market data. In determining the estimated fair value of these investments, we utilize appropriate valuation techniques including discounted cash flow analyses, scorecard method, Black-Scholes models and other methods as appropriate. Key inputs include projected cash flows, discount rates, peer group multiples and volatility.
To the extent there are changes in fair value, we recognize such changes through Equity earnings/losses.
Foreign Currency Forward Contracts
We regularly use foreign currency forward contracts to manage our currency exchange rate risk related to intercompany lending and cash management practices. These contracts are on the Consolidated Balance Sheets as current assets and current liabilities. We determine the fair values of these contracts based on current market rates. The inputs for these valuations are Level 2 in the fair value hierarchy. The following table details the gross notional value and net basis of these contracts.
(in billions)June 30, 2025December 31, 2024
Foreign currency forward contracts, gross notional value$2.20 2.21 
Foreign currency forward contracts, net basis1.17 1.08 
We record the asset and liability positions for our foreign currency forward contracts based on the net payable or net receivable position with the financial institutions from which we purchase these contracts. The outstanding balances of these contracts are presented in the following table.
(in millions)June 30, 2025December 31, 2024
Net asset, receivable positions$7.5 5.4 
Net asset, payable positions(1.2)(0.5)
Foreign currency forward contracts receivable$6.3 4.9 
Net liability, receivable positions$(0.1)(1.9)
Net liability, payable positions8.6 15.8 
Foreign currency forward contracts payable$8.5 13.9 
Warehouse Receivables
The fair value of the Warehouse receivables is based on already locked-in security-buy prices. As of June 30, 2025 and December 31, 2024, all of our Warehouse receivables included in the Consolidated Balance Sheets were under commitment to be purchased by government-sponsored enterprises ("GSEs") or by a qualifying investor as part of a U.S. government or GSE mortgage-backed security program. The Warehouse receivables are classified as Level 2 in the fair value hierarchy as all significant inputs are readily observable.
Deferred Compensation
We maintain a deferred compensation plan for certain of our U.S. employees that allows them to defer portions of their compensation. We recorded this plan on our Consolidated Balance Sheet as Deferred compensation plan assets, long-term deferred compensation plan liabilities, included in Deferred compensation, and as a reduction of equity, Shares held in trust. The components of the plan are presented in the following table.
(in millions)June 30, 2025December 31, 2024
Deferred compensation plan assets$674.9 664.0 
Long-term deferred compensation plan liabilities658.5 658.4 
Shares held in trust12.0 11.8 
Earn-Out Liabilities
We classify our Earn-out liabilities within Level 3 in the fair value hierarchy because the inputs we use to develop the estimated fair value include unobservable inputs. See Note 5, Business Combinations, Goodwill and Other Intangible Assets, for additional discussion of our Earn-out liabilities.
Mortgage Banking Derivatives
Both our interest rate lock commitments to prospective borrowers and forward sale contracts with prospective investors are undesignated derivatives and considered Level 3 valuations due to significant unobservable inputs related to nonperformance risk. Although nonperformance risk does not currently have a material impact, an increase in nonperformance risk assumptions would result in a lower fair value measurement.
The tables below present a reconciliation for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3).
(in millions)Balance as of March 31, 2025Net change in fair value
Foreign CTA(1)
Purchases / AdditionsSettlementsTransfers inBalance as of June 30, 2025
Investments$311.0 (25.3)1.4 6.0 — — $293.1 
Mortgage banking derivative assets and liabilities, net16.7 9.7 34.9 (41.4)19.9 
Earn-out liabilities37.5 (7.4)0.3 0.2 (12.0)0.5 19.1 
(in millions)Balance as of March 31, 2024Net change in fair value
Foreign CTA(1)
Purchases / AdditionsSettlements
Transfers in (out)(2)
Balance as of June 30, 2024
Investments$369.7 (9.3)(0.1)2.3 — 5.2 $367.8 
Mortgage banking derivative assets and liabilities, net18.9 19.5 — 22.3 (29.0)— 31.7 
Earn-out liabilities46.7 (2.1)— 11.0 (1.7)(0.2)53.7 
(in millions)Balance as of December 31, 2024Net change in fair value
Foreign CTA(1)
Purchases / AdditionsSettlementsTransfers outBalance as of
June 30, 2025
Investments$330.3 (45.2)2.1 6.0 (0.1)— $293.1 
Mortgage banking derivative assets and liabilities, net93.8 17.0 — 64.9 (155.8)— 19.9 
Earn-out liabilities35.8 (3.5)0.4 0.2 (12.1)(1.7)19.1 
(in millions)Balance as of December 31, 2023Net change in fair value
Foreign CTA(1)
Purchases / AdditionsSettlements
Transfers in (out)(2)
Balance as of June 30, 2024
Investments$367.3 (10.4)(0.3)2.8 — 8.4 $367.8 
Mortgage banking derivative assets and liabilities, net10.3 28.2 — 46.1 (52.9)— 31.7 
Earn-out liabilities57.5 (12.6)— 11.0 (2.0)(0.2)53.7 
(1) CTA: Currency translation adjustments
(2) Transfers in for Investments: Notes receivable (inclusive of accrued interest) converted to unconsolidated equity investments and were classified as a Level 3 investment immediately.
Net change in fair value, included in the tables above, is reported in Net income as follows.
Category of Assets/Liabilities using Unobservable InputsConsolidated Statements
of Comprehensive Income Account Caption
Earn-out liabilities (short-term and long-term)Restructuring and acquisition charges
InvestmentsEquity earnings/losses
Other current assets - Mortgage banking derivative assetsRevenue
Other current liabilities - Mortgage banking derivative liabilitiesRevenue
Non-Recurring Fair Value Measurements
We review our investments, except those investments otherwise reported at fair value, on a quarterly basis, or as otherwise deemed necessary, for indications of whether we may be unable to recover the carrying value of our investments and whether such investments are other than temporarily impaired. When the carrying amount of the investment is in excess of the estimated future undiscounted cash flows, we use a discounted cash flow approach or other acceptable method to determine the fair value of the investment in computing the amount of the impairment. Our determination of fair value primarily relies on Level 3 inputs. During the six months ended June 30, 2025, we recognized an investment-level impairment charge on one investment accounted for under the measurement alternative, as further described in Note 6, Investments. We did not recognize any significant investment-level impairment losses during the six months ended June 30, 2024.