Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2026

Schedule of Fair Value of Assets and Liabilities Measured at Fair Value on Recurring Basis

The following tables present the fair value of assets and liabilities measured at fair value on a recurring basis as of

September 30, 2026 and December 31, 2025 (dollars in millions):


	As of September 30, 2026
	Fair Value Measured and Recorded Using
	Level 1	Level 2	Level 3	Total
Assets
Available for sale debt securities:
U.S. treasury securities	$6	$—	$—	$6
Corporate debt securities	—	36	—	36
Asset-backed securities	—	6	—	6
Total available for sale debt securities	6	42	—	48
Equity securities	20	—	—	20
Investments in unconsolidated subsidiaries	—	—	19	19
Warehouse receivables	—	945	—	945
Derivative assets	—	95	—	95
Total assets at fair value	$26	$1,082	$19	$1,127

Liabilities
Contingent consideration	—	—	24	24
Derivative liabilities	—	361	—	361
Total liabilities at fair value	$—	$361	$24	$385


	As of December 31, 2025
	Fair Value Measured and Recorded Using
	Level 1	Level 2	Level 3	Total
Assets
Available for sale debt securities:
U.S. treasury securities	$4	$—	$—	$4
Corporate debt securities	—	36	—	36
Asset-backed securities	—	7	—	7
Total available for sale debt securities	4	43	—	47
Equity securities	19	—	—	19
Investments in unconsolidated subsidiaries	—	—	19	19
Warehouse receivables	—	1,630	—	1,630
Derivative assets	—	63	—	63
Total assets at fair value	$23	$1,736	$19	$1,778

Liabilities
Contingent consideration	—	—	65	65
Derivative liabilities	—	292	—	292
Total liabilities at fair value	$—	$292	$65	$357

Schedule of Reconciliation for Assets Measured at Fair Value

The tables below present a reconciliation for assets and liabilities measured at fair value on a recurring basis using

significant unobservable inputs (Level 3) (dollars in millions):


	Investment in Unconsolidated Subsidiaries	Contingent Consideration (1)
Balance as of June 30, 2026	$19	$34
Net change in fair value	—	(4)
Sales / Payments	—	(6)
Balance as of September 30, 2026	$19	$24

Balance as of December 31, 2025	$19	$65
Net change in fair value	—	(23)
Sales / Payments	—	(18)
Balance as of September 30, 2026	$19	$24

________________________________________________________________________________________________________________________________________

(1)As of September 30, 2026, a Monte Carlo model was used to estimate the fair value of Contingent Consideration related to the Pearce acquisition. The

unobservable inputs used for volatility and the discount rate were 17.6% and 4.9%, respectively.

Net change in fair value, included in the table above, is reported in Net income as follows:


Category of Assets/Liabilities using Unobservable Inputs		Consolidated Financial Statements
Investments in unconsolidated subsidiaries		Equity income from unconsolidated subsidiaries
Contingent consideration		Operating, administrative and other

Schedule of Reconciliation for Liabilities Measured at Fair Value

The tables below present a reconciliation for assets and liabilities measured at fair value on a recurring basis using

significant unobservable inputs (Level 3) (dollars in millions):


	Investment in Unconsolidated Subsidiaries	Contingent Consideration (1)
Balance as of June 30, 2026	$19	$34
Net change in fair value	—	(4)
Sales / Payments	—	(6)
Balance as of September 30, 2026	$19	$24

Balance as of December 31, 2025	$19	$65
Net change in fair value	—	(23)
Sales / Payments	—	(18)
Balance as of September 30, 2026	$19	$24

________________________________________________________________________________________________________________________________________

(1)As of September 30, 2026, a Monte Carlo model was used to estimate the fair value of Contingent Consideration related to the Pearce acquisition. The

unobservable inputs used for volatility and the discount rate were 17.6% and 4.9%, respectively.

Net change in fair value, included in the table above, is reported in Net income as follows:


Category of Assets/Liabilities using Unobservable Inputs		Consolidated Financial Statements
Investments in unconsolidated subsidiaries		Equity income from unconsolidated subsidiaries
Contingent consideration		Operating, administrative and other

Schedule of Carrying Values and Estimated Fair Values of Debt Instruments


	Estimated Fair Value		Carrying Value
Financial instrument	September 30, 2026	December 31, 2025	September 30, 2026	December 31, 2025
Senior term loans due 2028	$1,197	$1,239	$1,240	$1,322
5.500% senior notes due 2029	499	519	497	496
4.800% senior notes due 2030	582	608	592	591
2.500% senior notes due 2031	436	454	494	493
4.900% senior notes due 2033	702	755	743	742
5.950% senior notes due 2034	981	1,068	979	977
5.500% senior notes due 2035	473	516	494	494
5.250% senior notes due 2036	692	—	735	—

- 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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