APPLIED INDUSTRIAL TECHNOLOGIES INCAIT

APPLIED INDUSTRIAL TECHNOLOGIES INC Fair Value Disclosure

10-KFiled Aug 15, 20251 min read
FAIR VALUE MEASUREMENTS
Marketable securities measured at fair value at June 30, 2025 and June 30, 2024 totaled $25,628 and $22,519, respectively. The majority of these marketable securities are held in a rabbi trust for a non-qualified deferred compensation plan. The marketable securities are included in other assets on the consolidated balance sheets and their fair values were determined using quoted market prices (Level 1 in the fair value hierarchy). In addition, the Company holds Corporate-Owned Life Insurance (COLI) policies on certain retired employees, which are valued at the cash surrender value of the policies (Level 3 in the fair value hierarchy). The fair value of the COLI policies totaled $20,817 and $20,053, at June 30, 2025 and June 30, 2024, respectively, and are included in other assets on the consolidated balance sheets.
As of June 30, 2025, the Company had no fixed interest rate debt outstanding. As of June 30, 2024, the carrying values of the Company's fixed interest rate debt outstanding under its unsecured shelf facility agreement with Prudential Investment Management approximated its fair value (Level 2 in the fair value hierarchy).
The revolving credit facility and the AR Securitization Facility contain variable interest rates and their carrying values approximate their fair values (Level 2 in the fair value hierarchy). The carrying value of our cash and cash equivalents, trade accounts receivable, and accounts payable, approximate fair value because of the short-term maturity of these financial instruments.

Historical Timeline

Fiscal YearFiled
2025Aug 15, 2025Showing above
2024Aug 16, 2024
2023Aug 11, 2023
2022Aug 12, 2022
2021Aug 17, 2021
2020Aug 14, 2020
2019Aug 16, 2019
2018Aug 17, 2018
2017Aug 18, 2017

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.

Other Available Disclosures

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