Fair value measurements

9 Months Ended

Sep. 30, 2025

As of September 30, 2025 and December 31, 2024, the carrying amount of certain financial instruments, including cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and accrued liabilities, were representative of their fair values due to the short-term maturity of these instruments. Certain non-financial assets such as property, plant and equipment, operating right-of-use assets, equity method investments, goodwill, and other intangible assets are subject to nonrecurring fair value measurements if they are deemed to be impaired. During the three months ended September 30, 2025, the Company performed an impairment analysis of goodwill for one of its reporting units, which required a fair value measurement and resulted in an impairment. See Note 6, Goodwill and other intangible assets, net for more information.

The following table presents the fair value hierarchy levels of the Company’s assets and liabilities at fair value:


(in millions)	Fair Value Hierarchy	September 30, 2025		December 31, 2024
Measured at fair value on a recurring basis:
Interest rate derivative financial instrument assets	Level 2	$	20	$	69
Interest rate derivative financial instrument liabilities	Level 2	$	1	$	—


Acquisition related contingent consideration	Level 3	$	14	$	13
Put options - exercised not settled (1)	Level 1	$	80	$	—
Put options - not exercised (1)	Level 3	$	13	$	107

Measured at fair value on a non-recurring basis:

Other investments (included in Other assets) (2)	Level 3	$	20	$	18

Disclosed at fair value:
Long-term debt (3)	Level 3	$	5,871	$	4,868
Kloosterboer Preference Shares (4)	Level 3	$	277	$	259

(1) For more details, refer to Note 2, Capital structure and noncontrolling interests, including the reclassification between levels.
(2) The investments in equity securities carried at fair value are subject to transfer restrictions and generally cannot be sold without consent.
(3) The carrying value of long-term debt is disclosed in Note 9, Debt.
(4) The carrying value of Kloosterboer Preference Shares is disclosed in Note 14, Other long-term liabilities.

In accordance with GAAP, the Company has elected to remeasure investments without readily determinable fair values only when an observable transaction occurs for an identical or similar investment of the same issuer. During the three and nine months ended September 30, 2025 and 2024, the Company recorded immaterial non-recurring fair value adjustments within Other nonoperating income (expense), net in the condensed consolidated statements of operations and comprehensive income (loss) related to certain other investments without readily determinable fair values.

The Company’s long-term debt is reported at the aggregate principal amount less unamortized deferred financing costs and any above or below market adjustments (as required in purchase accounting) in the condensed consolidated balance sheets. For instruments with no prepayment option, the fair value is estimated utilizing a discounted cash flow model where the contractual cash flows (i.e., coupon and principal repayments) were discounted at a risk-adjusted yield reflective of both the time value of money and the credit risk inherent in each instrument. For instruments that include a prior-to-maturity prepayment option, the fair value is estimated using a Black-Derman-Toy lattice model. The inputs used to estimate the fair value of the Company’s debt instruments are comprised of Level 2 inputs, including risk-free interest rates, credit ratings, and financial metrics for comparable publicly listed companies, and Level 3 inputs, such as risk-adjusted credit spreads based on adjusted yields implied at issuance, and yield volatility (used for instruments with a prepayment option).

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

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+ Details

Lineage, Inc. 10-Q