v3.26.1
Fair Value Measurement
 3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurement
16. Fair Value Measurement
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The accounting standards related to fair value measurements include a hierarchy for information and valuations used in measuring fair value that is broken down into three levels based on reliability, as follows:
•Level 1 – observable inputs such as quoted prices in active markets for identical assets and liabilities;
•Level 2 – inputs other than quoted prices for identical assets 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 requires the use of valuation techniques and the development of assumptions.
The Company’s financial assets and liabilities measured at fair value on a recurring basis are as follows (in millions):
March 31, 2026
Level 1Level 2Level 3Total
Assets
Interest rate swaps$— $5 $— $5 
Additional seller note— — — — 
Total assets recorded at fair value$— $5 $— $5 
Liabilities
Interest rate swaps$— $1 $— $1 
Seller earnouts liability— — — — 
Tax receivable agreement liability (1)
— — 297 297 
Total liabilities recorded at fair value$— $1 $297 $298 
December 31, 2025
Level 1Level 2Level 3Total
Assets
Interest rate swaps$— $5 $— $5 
Additional seller note— — — — 
Total assets recorded at fair value$— $5 $— $5 
Liabilities
Interest rate swaps$— $1 $— $1 
Seller earnouts liability— — — — 
Tax receivable agreement liability (1)
— — 435 435 
Total liabilities recorded at fair value$— $1 $435 $436 
_________________________________________________________
(1)Excludes the portion of liability related to the exchanges of Class A Units not measured at fair value on a recurring basis.
Derivatives
The valuations of the derivatives intended to mitigate our interest rate risk are determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each instrument. This analysis utilizes observable market-based inputs, including interest rate curves, interest rate volatility, or spot and forward exchange rates, and reflects the contractual terms of these instruments, including the period to maturity. In addition, credit valuation adjustments, which consider the impact of any credit enhancements to the contracts, are incorporated in the fair values to account for potential non-performance risk.
Additional Disclosures Regarding Fair Value Measurements
The fair value of the Company’s debt is classified as Level 2 and the Seller note is classified as Level 3 within the fair value hierarchy and corroborated by observable market data is as follows (in millions):
March 31, 2026December 31, 2025
Carrying ValueFair ValueCarrying ValueFair Value
Assets
Seller note$44 $48 $42 $46 
Total assets$44 $48 $42 $46 
Liabilities
Current portion of long-term debt, net$20 $15 $20 $19 
Long-term debt, net1,980 1,426 1,985 1,903 
Total$2,000 $1,441 $2,005 $1,922 
The carrying value of the Term Loan includes the outstanding principal balance, less any unamortized premium.
The carrying amounts of Cash and cash equivalents, Receivables, net and Accounts payable and accrued liabilities approximate their fair values due to the short-term maturities of these instruments.
During each of the three months ended March 31, 2026 and 2025, there were no transfers in or out of the Level 1, Level 2 or Level 3 classifications.