v3.26.1
Fair Value of Financial Information
 6 Months Ended
Jun. 30, 2026
Fair Value Disclosures [Abstract]  
Fair Value of Financial Information
Note 13: Fair Value of Financial Information
Fair Value of Financial Instruments
The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments:
Current assets and current liabilities—The carrying amounts reported on the Consolidated Balance Sheets for current assets and current liabilities, including revolving credit debt, due to the short-term maturities and variable interest rates, approximate their fair values.
Secured seller promissory note from the sale of the Homeowner Services Group—On February 13, 2026, the Company received payment of all amounts payable under the secured seller promissory note. See Note 5—Mergers, Acquisitions and Divestitures for additional information. As of December 31, 2025, the carrying amount reported on the Consolidated Balance Sheets for the secured seller promissory note was $795 million and the accounting fair value measurement approximated $798 million. The secured seller promissory note was classified as Level 3 within the fair value hierarchy.
Preferred stock with mandatory redemption requirements and long-term debt—The fair values of preferred stock with mandatory redemption requirements and long-term debt are categorized within the fair value hierarchy based on the inputs that are used to value each instrument. The fair value of long-term debt classified as Level 1 is calculated using quoted prices in active markets. Level 2 instruments are valued using observable inputs and Level 3 instruments are valued using observable and unobservable inputs.
Presented in the tables below are the carrying amounts, including fair value adjustments previously recognized in acquisition purchase accounting, and the fair values of the Company’s financial instruments:
As of June 30, 2026
Carrying AmountAt Fair Value
 Level 1Level 2Level 3Total
Preferred stock with mandatory redemption requirements$3 $— $— $3 $3 
Long-term debt14,489 12,697 30 623 13,350 
As of December 31, 2025
 Carrying AmountAt Fair Value
 Level 1Level 2Level 3Total
Preferred stock with mandatory redemption requirements$3 $— $— $3 $3 
Long-term debt14,256 11,653 1,065 616 13,334 
Recurring Fair Value Measurements
Presented in the tables below are assets and liabilities measured and recorded at fair value on a recurring basis and their level within the fair value hierarchy:
As of June 30, 2026
 Level 1Level 2Level 3Total
Assets:    
Restricted funds$37 $— $— $37 
Rabbi trust investments36 — — 36 
Deposits139 — — 139 
Other investments:
Money market and other33 — — 33 
Fixed-income securities1 2 — 3 
Total assets246 2 — 248 
Liabilities:    
Deferred compensation obligations39 — — 39 
Total liabilities39 — — 39 
Total assets$207 $2 $— $209 
As of December 31, 2025
 Level 1Level 2Level 3Total
Assets:    
Restricted funds$41 $— $— $41 
Rabbi trust investments32 — — 32 
Deposits124 — — 124 
Other investments:
Money market and other20 — — 20 
Fixed-income securities28 7 — 35 
Mark-to-market derivative asset— 2 — 2 
Total assets245 9 — 254 
Liabilities:    
Deferred compensation obligations38 — — 38 
Total liabilities38 — — 38 
Total assets $207 $9 $— $216 
Restricted funds—The Company’s restricted funds primarily represent proceeds received from financings for the construction and capital improvement of facilities and from customers for future services under operation, maintenance and repair projects. Long-term restricted funds of $19 million and $20 million were included in other long-term assets on the Consolidated Balance Sheets as of June 30, 2026, and December 31, 2025, respectively.
Rabbi trust investments—The Company’s rabbi trust investments consist of equity and index funds from which supplemental executive retirement plan benefits and deferred compensation obligations can be paid. The Company includes these assets in other long-term assets on the Consolidated Balance Sheets.
Deposits—Deposits include escrow funds and certain other deposits held in trust. The Company includes cash deposits in other current assets on the Consolidated Balance Sheets.
Deferred compensation obligations—The Company’s deferred compensation plans allow participants to defer certain cash compensation into notional investment accounts. The Company includes such plans in other long-term liabilities on the Consolidated Balance Sheets. The value of the Company’s deferred compensation obligations is based on the market value of the participants’ notional investment accounts. The notional investments are comprised primarily of mutual funds, which are based on quoted prices for identical assets in active markets.
Mark-to-market derivative assets and liabilities—The Company employs derivative financial instruments in the form of treasury lock agreements, classified as cash flow hedges, in order to fix the interest cost on existing or forecasted debt. The Company uses a calculation of future cash inflows and estimated future outflows, which are discounted, to determine the current fair value. Additional inputs to the present value calculation include the contract terms, counterparty credit risk, interest rates and market volatility. The Company includes mark-to-market derivative assets in other current assets and mark-to-market derivative liabilities in other current liabilities on the Consolidated Balance Sheets.
Other investments—The Company maintains a Voluntary Employees’ Beneficiary Association trust for purposes of paying active union employee medical benefits (“Active VEBA”). The investments in the Active VEBA trust primarily consist of money market funds and available-for-sale fixed-income securities.
The money market and other investments have original maturities of three months or less when purchased. The fair value measurement of the money market and other investments is based on quoted prices for identical assets in active markets and therefore included in the recurring fair value measurements hierarchy as Level 1.
The available-for-sale fixed-income securities are primarily investments in U.S. Treasury securities and government bonds. The majority of U.S. Treasury securities and government bonds have been categorized as Level 1 because they trade in highly-liquid and transparent markets. Certain U.S. Treasury securities are based on prices that reflect observable market information, such as actual trade information of similar securities, and are therefore categorized as Level 2, because the valuations are calculated using models which utilize actively traded market data that the Company can corroborate.
As of June 30, 2026, and December 31, 2025, the Company had current assets of $36 million and $55 million, respectively, included in Other on the Consolidated Balance Sheets for other investments measured and recorded at fair value. Unrealized holding gains and losses on available-for-sale securities are excluded from earnings and reported in other comprehensive income until realized.
The following tables summarize the unrealized positions for available-for-sale fixed-income securities:
As of June 30, 2026
Amortized Cost BasisGross Unrealized GainsGross Unrealized LossesFair Value
Available-for-sale fixed-income securities$3 $— $— $3 
As of December 31, 2025
Amortized Cost BasisGross Unrealized GainsGross Unrealized LossesFair Value
Available-for-sale fixed-income securities$36 $— $1 $35 
The fair value of the Company’s available-for-sale fixed-income securities, summarized by contractual maturities, as of June 30, 2026, is as follows:
Amount
Other investments - Available-for-sale fixed-income securities
1 year - 5 years$1 
5 years - 10 years1 
Greater than 10 years1 
Total$3