| Fair Value Measurements |
Fair Value Measurements The fair value hierarchy established by ASC 820, Fair Value Measurement, prioritizes the use of inputs used in valuation techniques into the following three levels: •Level 1 inputs are observable quoted prices in active markets for identical assets or liabilities •Level 2 inputs are observable, either directly or indirectly, but are not Level 1 inputs •Level 3 inputs are unobservable The following fair value hierarchy table presents the Company’s assets that are measured at fair value on a recurring basis as of June 30, 2026 and December 31, 2025: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As of June 30, 2026 | | As of December 31, 2025 | | Fair Value Hierarchy | | | | Fair Value Hierarchy | | | | (in thousands) | Level 1 | Level 2 | Level 3 | | Total | | Level 1 | Level 2 | Level 3 | | Total | Cash and cash equivalents(a) | $ | 938,215 | | $ | — | | $ | — | | | $ | 938,215 | | | $ | 734,553 | | $ | — | | $ | — | | | $ | 734,553 | | Restricted cash(a) | 6,939 | | — | | — | | | 6,939 | | | 35,641 | | — | | — | | | 35,641 | | Restricted investments(b) | — | | 270,884 | | — | | | 270,884 | | | — | | 228,959 | | — | | | 228,959 | | Investments in lieu of retention(c) | 38,152 | | 195,810 | | — | | | 233,962 | | | 27,849 | | 159,142 | | — | | | 186,991 | | | | | | | | | | | | | | | Total | $ | 983,306 | | $ | 466,694 | | $ | — | | | $ | 1,450,000 | | | $ | 798,043 | | $ | 388,101 | | $ | — | | | $ | 1,186,144 | |
____________________________________________________________________________________________________ (a)Includes money market funds and short-term investments with maturity dates of three months or less when acquired. (b)Restricted investments, as of June 30, 2026 and December 31, 2025, consist of available-for-sale (“AFS”) debt securities, which are valued based on pricing models determined from a compilation of primarily observable market information, broker quotes in non-active markets or similar assets; therefore, they are classified as Level 2 assets. (c)Investments in lieu of retention are included in retention receivable as of June 30, 2026 and December 31, 2025, and are composed of cash and cash equivalents of $38.2 million and $27.8 million, respectively, and AFS debt securities of $195.8 million and $159.1 million, respectively. The fair values of cash equivalents are measured using quoted market prices; therefore, they are classified as Level 1 assets. The fair values of AFS debt securities are determined from a compilation of primarily observable market information, broker quotes in non-active markets or similar assets; therefore, they are classified as Level 2 assets. Investments in AFS debt securities consisted of the following as of June 30, 2026 and December 31, 2025: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As of June 30, 2026 | | As of December 31, 2025 | | (in thousands) | Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | | Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | | Restricted investments: | | | | | | | | | | | Corporate debt securities | $ | 220,835 | | $ | 532 | | $ | (1,449) | | $ | 219,918 | | | $ | 205,584 | | $ | 1,900 | | $ | (472) | | $ | 207,012 | | | U.S. government agency securities | 33,490 | | 2 | | (663) | | 32,829 | | | 12,300 | | 11 | | (329) | | 11,982 | | | Municipal bonds | 18,745 | | 3 | | (794) | | 17,954 | | | 10,282 | | 32 | | (534) | | 9,780 | | | Corporate certificates of deposit | 196 | | — | | (13) | | 183 | | | 198 | | — | | (13) | | 185 | | | Total restricted investments | 273,266 | | 537 | | (2,919) | | 270,884 | | | 228,364 | | 1,943 | | (1,348) | | 228,959 | | | | | | | | | | | | | Investments in lieu of retention: | | | | | | | | | | | Corporate debt securities | 168,592 | | 179 | | (302) | | 168,469 | | | 140,749 | | 844 | | (38) | | 141,555 | | | U.S. government agency securities | 4,337 | | — | | (32) | | 4,305 | | | 4,337 | | — | | (43) | | 4,294 | | | Municipal bonds | 23,443 | | 195 | | (602) | | 23,036 | | | 13,349 | | 218 | | (274) | | 13,293 | | | Total investments in lieu of retention | 196,372 | | 374 | | (936) | | 195,810 | | | 158,435 | | 1,062 | | (355) | | 159,142 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total AFS debt securities | $ | 469,638 | | $ | 911 | | $ | (3,855) | | $ | 466,694 | | | $ | 386,799 | | $ | 3,005 | | $ | (1,703) | | $ | 388,101 | |
The following table summarizes the fair value and gross unrealized losses aggregated by category and the length of time that individual AFS debt securities have been in a continuous unrealized loss position as of June 30, 2026 and December 31, 2025: | | | | | | | | | | | | | | | | | | | | | | | | | | | | As of June 30, 2026 | | Less than 12 Months | | 12 Months or Greater | | Total | | (in thousands) | Fair Value | Unrealized Losses | | Fair Value | Unrealized Losses | | Fair Value | Unrealized Losses | | Restricted investments: | | | | | | | | | | Corporate debt securities | $ | 132,735 | | $ | (1,383) | | | $ | 10,083 | | $ | (66) | | | $ | 142,818 | | $ | (1,449) | | | U.S. government agency securities | 25,257 | | (322) | | | 3,626 | | (341) | | | 28,883 | | (663) | | | Municipal bonds | 12,377 | | (228) | | | 4,968 | | (566) | | | 17,345 | | (794) | | | Corporate certificates of deposit | — | | — | | | 183 | | (13) | | | 183 | | (13) | | | Total restricted investments | 170,369 | | (1,933) | | | 18,860 | | (986) | | | 189,229 | | (2,919) | | | | | | | | | | | | Investments in lieu of retention: | | | | | | | | | | Corporate debt securities | 107,130 | | (302) | | | — | | — | | | 107,130 | | (302) | | | U.S. government agency securities | 4,306 | | (32) | | | — | | — | | | 4,306 | | (32) | | | Municipal bonds | 15,173 | | (371) | | | 6,061 | | (231) | | | 21,234 | | (602) | | | Total investments in lieu of retention | 126,609 | | (705) | | | 6,061 | | (231) | | | 132,670 | | (936) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total AFS debt securities | $ | 296,978 | | $ | (2,638) | | | $ | 24,921 | | $ | (1,217) | | | $ | 321,899 | | $ | (3,855) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | As of December 31, 2025 | | Less than 12 Months | | 12 Months or Greater | | Total | | (in thousands) | Fair Value | Unrealized Losses | | Fair Value | Unrealized Losses | | Fair Value | Unrealized Losses | | Restricted investments: | | | | | | | | | | Corporate debt securities | $ | 57,673 | | $ | (221) | | | $ | 20,907 | | $ | (251) | | | $ | 78,580 | | $ | (472) | | | U.S. government agency securities | 3,056 | | (31) | | | 3,550 | | (298) | | | 6,606 | | (329) | | | Municipal bonds | 2,171 | | (7) | | | 4,894 | | (527) | | | 7,065 | | (534) | | | Corporate certificates of deposit | — | | — | | | 185 | | (13) | | | 185 | | (13) | | | Total restricted investments | 62,900 | | (259) | | | 29,536 | | (1,089) | | | 92,436 | | (1,348) | | | | | | | | | | | | Investments in lieu of retention: | | | | | | | | | | Corporate debt securities | 4,796 | | (37) | | | 2,982 | | (1) | | | 7,778 | | (38) | | | U.S. government agency securities | 4,294 | | (43) | | | — | | — | | | 4,294 | | (43) | | | Municipal bonds | 11,855 | | (274) | | | — | | — | | | 11,855 | | (274) | | | Total investments in lieu of retention | 20,945 | | (354) | | | 2,982 | | (1) | | | 23,927 | | (355) | | | | | | | | | | | | Total AFS debt securities | $ | 83,845 | | $ | (613) | | | $ | 32,518 | | $ | (1,090) | | | $ | 116,363 | | $ | (1,703) | | | | | | | | | | |
The unrealized losses in AFS debt securities as of June 30, 2026 and December 31, 2025 are primarily attributable to market interest rate increases and not a deterioration in credit quality of the issuers. Management evaluated the unrealized losses in AFS debt securities considering factors including credit ratings and other relevant information, which may indicate that contractual cash flows are not expected to occur. Based on the analysis, management determined that credit losses did not exist for AFS debt securities in an unrealized loss position as of June 30, 2026 and December 31, 2025. It is not considered likely that the Company will be required to sell the investments before full recovery of the amortized cost basis of the AFS debt securities, which may be at maturity. As a result, consistent with the same period in 2025, the Company has not recognized any impairment losses in earnings during the six months ended June 30, 2026. The amortized cost and fair value of AFS debt securities by contractual maturity as of June 30, 2026 are summarized in the table below. Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay certain obligations. | | | | | | | | | | | | (in thousands) | Amortized Cost | Fair Value | | | | | Due within one year | $ | 136,504 | | $ | 136,398 | | | Due after one year through five years | 298,842 | | 296,952 | | | Due after five years | 34,292 | | 33,344 | | | Total | $ | 469,638 | | $ | 466,694 | |
The carrying values of receivables, payables and other amounts arising out of normal contract activities, including retention, which may be settled beyond one year, are estimated to approximate fair value. Of the Company’s long-term debt, the fair value of the 2024 Senior Notes was $435.8 million and $444.2 million as of June 30, 2026 and December 31, 2025, respectively. The fair values of the 2024 Senior Notes were determined using Level 1 inputs, specifically current observable market prices. The reported value of the Company’s remaining borrowings approximates fair value as of June 30, 2026 and December 31, 2025.
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