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Fair Value Measurements
 9 Months Ended
Sep. 30, 2023
Fair Value Disclosures [Abstract]  
Fair Value Measurements

Note 13 – 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.

The following tables present the fair values of the Company’s assets, measured on a recurring basis, as of September 30, 2023 and December 31, 2022:

(in millions)

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

September 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury bonds

 

$

128.1

 

 

$

—

 

 

$

128.1

 

 

$

—

 

Municipal bonds

 

 

1,196.1

 

 

 

—

 

 

 

1,196.1

 

 

 

—

 

Foreign government bonds

 

 

206.9

 

 

 

—

 

 

 

206.9

 

 

 

—

 

Governmental agency bonds

 

 

217.5

 

 

 

—

 

 

 

217.5

 

 

 

—

 

Governmental agency mortgage-backed securities

 

 

4,170.4

 

 

 

—

 

 

 

4,170.4

 

 

 

—

 

U.S. corporate debt securities

 

 

880.1

 

 

 

—

 

 

 

880.1

 

 

 

—

 

Foreign corporate debt securities

 

 

428.1

 

 

 

—

 

 

 

428.1

 

 

 

—

 

 

 

 

7,227.2

 

 

 

—

 

 

 

7,227.2

 

 

 

—

 

Equity securities:

 

 

 

 

 

 

 

 

 

 

 

 

Common stocks

 

 

396.0

 

 

 

396.0

 

 

 

—

 

 

 

—

 

Preferred stocks

 

 

11.3

 

 

 

11.3

 

 

 

—

 

 

 

—

 

 

 

 

407.3

 

 

 

407.3

 

 

 

—

 

 

 

—

 

Mortgage loans held for sale

 

 

13.1

 

 

 

—

 

 

 

11.9

 

 

 

1.2

 

Total

 

$

7,647.6

 

 

$

407.3

 

 

$

7,239.1

 

 

$

1.2

 

 

(in millions)

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury bonds

 

$

302.8

 

 

$

—

 

 

$

302.8

 

 

$

—

 

Municipal bonds

 

 

1,478.7

 

 

 

—

 

 

 

1,478.7

 

 

 

—

 

Foreign government bonds

 

 

193.7

 

 

 

—

 

 

 

193.7

 

 

 

—

 

Governmental agency bonds

 

 

228.6

 

 

 

—

 

 

 

228.6

 

 

 

—

 

Governmental agency mortgage-backed securities

 

 

4,602.4

 

 

 

—

 

 

 

4,602.4

 

 

 

—

 

U.S. corporate debt securities

 

 

921.4

 

 

 

—

 

 

 

921.4

 

 

 

—

 

Foreign corporate debt securities

 

 

442.0

 

 

 

—

 

 

 

442.0

 

 

 

—

 

 

 

 

8,169.6

 

 

 

—

 

 

 

8,169.6

 

 

 

—

 

Equity securities:

 

 

 

 

 

 

 

 

 

 

 

 

Common stocks

 

 

268.1

 

 

 

268.1

 

 

 

—

 

 

 

—

 

Preferred stocks

 

 

11.4

 

 

 

11.4

 

 

 

—

 

 

 

—

 

 

 

 

279.5

 

 

 

279.5

 

 

 

—

 

 

 

—

 

Mortgage loans held for sale

 

 

15.9

 

 

 

—

 

 

 

13.9

 

 

 

2.0

 

Total

 

$

8,465.0

 

 

$

279.5

 

 

$

8,183.5

 

 

$

2.0

 

 

 

The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments not measured at fair value as of September 30, 2023 and December 31, 2022:

 

 

Carrying

 

 

Estimated fair value

 

(in millions)

 

Amount

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

September 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,579.1

 

 

$

1,579.1

 

 

$

1,579.1

 

 

$

—

 

 

$

—

 

Deposits with banks

 

$

55.3

 

 

$

55.0

 

 

$

2.5

 

 

$

52.5

 

 

$

—

 

Notes receivable, net

 

$

21.4

 

 

$

21.8

 

 

$

—

 

 

$

—

 

 

$

21.8

 

Secured financings receivable

 

$

655.5

 

 

$

655.5

 

 

$

—

 

 

$

655.5

 

 

$

—

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured financings payable

 

$

530.4

 

 

$

530.4

 

 

$

—

 

 

$

530.4

 

 

$

—

 

Notes and contracts payable

 

$

1,392.2

 

 

$

1,160.2

 

 

$

—

 

 

$

1,158.2

 

 

$

2.0

 

 

 

 

Carrying

 

 

Estimated fair value

 

(in millions)

 

Amount

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,223.5

 

 

$

1,223.5

 

 

$

1,223.5

 

 

$

—

 

 

$

—

 

Deposits with banks

 

$

63.4

 

 

$

62.7

 

 

$

8.5

 

 

$

54.2

 

 

$

—

 

Notes receivable, net

 

$

10.7

 

 

$

10.6

 

 

$

—

 

 

$

—

 

 

$

10.6

 

Secured financings receivable

 

$

422.7

 

 

$

422.7

 

 

$

—

 

 

$

422.7

 

 

$

—

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured financings payable

 

$

366.3

 

 

$

366.3

 

 

$

—

 

 

$

366.3

 

 

$

—

 

Notes and contracts payable

 

$

1,645.8

 

 

$

1,404.4

 

 

$

—

 

 

$

1,400.6

 

 

$

3.8

 

Assets measured at fair value on a non-recurring basis

During the nine months ended September 30, 2023, the Company recognized impairment charges totaling $157.9 million related to its non-marketable equity securities, all of which related to investments in private venture-stage companies. The impairment charges reflect declines in fair value below carrying amount for certain investments based on either Level 2 observable price changes or Level 3 unobservable inputs such as market data for comparable companies and revenue and cash flow estimates, among others. At September 30, 2023, the fair values of the Company's non-marketable equity securities remeasured during the nine months ended September 30, 2023 based on Level 2 observable price changes totaled $44.7 million and using Level 3 unobservable inputs totaled $35.1 million. See Note 4 Equity Securities for further information on the Company’s non-marketable equity securities.