Fair Value Measurements

12 Months Ended

Dec. 31, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements

NOTE 17. Fair Value Measurements:

Certain of the Company’s assets and liabilities are carried at fair value. 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 Company categorizes its assets and liabilities carried at fair value using a three-level hierarchy for fair value measurements that distinguishes between market participant assumptions developed based on market data obtained from sources independent of the Company (observable inputs) and the Company’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The hierarchy for inputs used in determining fair value maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. The hierarchy level assigned to the assets and liabilities is based on management’s assessment of the transparency and reliability of the inputs used to estimate the fair values at the measurement date. The three hierarchy levels are defined as follows:

Level 1—Valuations based on unadjusted quoted market prices in active markets for identical assets or liabilities.

Level 2—Valuations based on observable inputs (other than Level 1 prices), such as quoted prices for similar assets or liabilities at the measurement date; quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly.

Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement and involve management judgment.

If the inputs used to measure fair value fall into different levels of the fair value hierarchy, the hierarchy level assigned is based upon the lowest level of input that is significant to the fair value measurement.

Assets measured at fair value on a recurring basis

The valuation techniques and inputs used by the Company to estimate the fair value of assets measured on a recurring basis are summarized as follows:

Debt securities

The fair values of debt securities were based on the market values obtained from independent pricing services that were evaluated using pricing models that vary by asset class and incorporate available trade, bid and other market information and price quotes from well-established, independent broker-dealers. The independent pricing services monitor market indicators, industry and economic events, and for broker-quoted only securities, obtain quotes from market makers or broker-dealers that they recognize to be market participants. The pricing services utilize the market approach in determining the fair values of the debt securities held by the Company. The Company obtains an understanding of the valuation models and assumptions utilized by the services and has controls in place to determine that the values provided represent fair values. The Company’s validation procedures include comparing prices received from the pricing services to quotes received from other third-party sources for certain securities with market prices that are readily verifiable. If the price comparison results in differences over a predefined threshold, the Company will assess the reasonableness of the changes relative to prior periods given the prevailing market conditions and assess changes in the issuers’ credit worthiness, performance of any underlying collateral and prices of the instrument relative to similar issuances. To date, the Company has not made any material adjustments to the fair value measurements provided by the pricing services.

Typical inputs and assumptions to pricing models used to value the Company’s debt securities include, but are not limited to, benchmark yields, reported trades, broker-dealer quotes, credit spreads, credit ratings, bond insurance (if applicable), benchmark securities, bids, offers, reference data and industry and economic events. For mortgage-backed securities, inputs and assumptions may also include the structure of issuance, characteristics of the issuer, collateral attributes and prepayment speeds.

Marketable equity securities

The fair values of marketable equity securities, including preferred and common stocks, were based on quoted market prices for identical assets that are readily and regularly available in an active market.

The following tables present the fair values of the Company’s assets, measured on a recurring basis, as of December 31, 2024 and 2023:

(in millions)	Total		Level 1		Level 2		Level 3
December 31, 2024
Debt securities:
U.S. Treasury bonds	$	175.6	$	—	$	175.6	$	—
Municipal bonds		776.5		—		776.5		—
Foreign government bonds		211.6		—		211.6		—
Governmental agency bonds		189.8		—		189.8		—
Governmental agency mortgage-backed securities		4,502.3		—		4,502.3		—
U.S. corporate debt securities		925.6		—		925.6		—
Foreign corporate debt securities		484.5		—		484.5		—
		7,265.9		—		7,265.9		—
Equity securities:
Common stocks		374.7		374.7		—		—
Preferred stocks		12.1		12.1		—		—
		386.8		386.8		—		—
Total	$	7,652.7	$	386.8	$	7,265.9	$	—

(in millions)	Total		Level 1		Level 2		Level 3
December 31, 2023
Debt securities:
U.S. Treasury bonds	$	199.3	$	—	$	199.3	$	—
Municipal bonds		1,245.8		—		1,245.8		—
Foreign government bonds		219.3		—		219.3		—
Governmental agency bonds		195.4		—		195.4		—
Governmental agency mortgage-backed securities		3,875.7		—		3,875.7		—
U.S. corporate debt securities		958.4		—		958.4		—
Foreign corporate debt securities		463.6		—		463.6		—
		7,157.5		—		7,157.5		—
Equity securities:
Common stocks		424.5		424.5		—		—
Preferred stocks		12.4		12.4		—		—
		436.9		436.9		—		—
Mortgage loans held for sale		13.1		—		11.8		1.3
Total	$	7,607.5	$	436.9	$	7,169.3	$	1.3

There were no transfers between Levels 1, 2 and 3 during the years ended December 31, 2024 and 2023. Transfers into or out of the Level 3 category occur when unobservable inputs become either more, or less, significant to the fair value measurement. The Company’s policy is to recognize transfers between levels in the fair value hierarchy at the end of the reporting period.

Financial instruments not measured at fair value

In estimating the fair values of its financial instruments not measured at fair value, the Company used the following methods and assumptions:

Cash and cash equivalents

The carrying amount for cash and cash equivalents approximates fair value due to the short-term maturity of these investments.

Deposits with banks

The fair value of deposits with banks is estimated based on rates currently offered for deposits of similar remaining maturities, where applicable.

Notes receivable, net

The fair value of notes receivable, net is estimated based on current market rates offered for notes with similar maturities and credit quality.

Secured financings receivable

The carrying amount of secured financings receivable approximates fair value due to the short-term nature of these assets.

Secured financings payable

The carrying amount of secured financings payable approximates fair value due to the short-term nature of these liabilities.

Notes and contracts payable

The fair value of notes and contracts payable is estimated based on market values obtained from independent pricing services for the Company's senior unsecured notes.

The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments not measured at fair value as of December 31, 2024 and 2023:

	Carrying		Estimated fair value
(in millions)	Amount		Total		Level 1		Level 2		Level 3
December 31, 2024
Assets:
Cash and cash equivalents	$	1,718.1	$	1,718.1	$	1,718.1	$	—	$	—
Deposits with banks	$	85.4	$	85.3	$	20.7	$	64.6	$	—
Notes receivable, net	$	34.4	$	34.6	$	—	$	—	$	34.6
Secured financings receivable	$	690.0	$	690.0	$	—	$	690.0	$	—
Liabilities:
Secured financings payable	$	643.8	$	643.8	$	—	$	643.8	$	—
Notes and contracts payable	$	1,546.6	$	1,399.4	$	—	$	1,388.4	$	11.0

	Carrying		Estimated fair value
(in millions)	Amount		Total		Level 1		Level 2		Level 3
December 31, 2023
Assets:
Cash and cash equivalents	$	3,605.3	$	3,605.3	$	3,605.3	$	—	$	—
Deposits with banks	$	55.8	$	55.6	$	4.0	$	51.6	$	—
Notes receivable, net	$	22.4	$	23.2	$	—	$	—	$	23.2
Secured financings receivable	$	636.5	$	636.5	$	—	$	636.5	$	—
Liabilities:
Secured financings payable	$	553.3	$	553.3	$	—	$	553.3	$	—
Notes and contracts payable	$	1,393.9	$	1,219.6	$	—	$	1,215.4	$	4.2

Assets measured at fair value on a non-recurring basis

	Estimated fair value (3)
(in millions)	Total		Level 1		Level 2		Level 3
December 31, 2024
Non-marketable equity securities (1)	$	23.4	$	—	$	5.1	$	18.3
December 31, 2023
Non-marketable equity securities (2)	$	95.1	$	—	$	56.5	$	38.6

(1)Excludes $179.0 million of non-marketable equity securities for which no observable price changes or impairment charges occurred during the year.

(2)Excludes $129.0 million of non-marketable equity securities for which no observable price changes or impairment charges occurred during the year.

(3)Estimated fair values were determined during the year as of the dates that either an observable transaction occurred or an impairment assessment was made.

Non-marketable equity securities that have been remeasured during the year based on observable price changes are classified within Level 2 in the fair value hierarchy because the fair value is determined based only on significant inputs that are observable, such as observable transactions at the transaction date.

The following table presents the valuation techniques and significant unobservable inputs used in measuring the fair value of non-marketable equity securities classified within Level 3 of the fair value hierarchy as of December 31, 2024:

(in millions)	Fair Value		Approach	Input	Range	Weighted Average (1)
Non-marketable equity securities	$	18.3	Market	Revenue Multiple	12.2-12.3	12.2

(1)Weighted average is calculated based on the fair values of the non-marketable equity securities.