Dauch CorpDCH

Dauch Corp Fair Value Disclosure

10-KFiled Feb 13, 20263 min read
6. FAIR VALUE

ASC 820 - Fair Value Measurement defines fair value 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 definition is based on an exit price rather than an entry price, regardless of whether the entity plans to hold or sell the asset. This guidance also establishes a fair value hierarchy to prioritize inputs used in measuring fair value as follows:

•Level 1:  Observable inputs such as quoted prices in active markets;
•Level 2:  Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and
•Level 3:  Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

FINANCIAL INSTRUMENTS  The estimated carrying value of our financial assets and liabilities that are recognized at fair value on a recurring basis, using available market information and other observable data, are as follows:
Fair Value
December 31, 2025December 31, 2024Input
(in millions)
Balance Sheet Classification
Cash equivalents$183.1 $257.3 Level 1
Prepaid expenses and other
    Cash flow hedges - currency forward contracts 9.0 1.2 Level 2
Cash flow hedges - variable-to-fixed interest rate swap0.1 — Level 2
    Nondesignated - currency forward contracts53.7 — Level 2
Other assets and deferred charges
    Cash flow hedges - currency forward contracts 4.9 — Level 2
Fair value hedges - fixed-to-fixed cross-currency swap— 0.9 Level 2
Cash flow hedges - variable-to-fixed interest rate swap 0.7 — Level 2
Accrued expenses and other
Cash flow hedges - currency forward contracts — 14.9 Level 2
Cash flow hedges - variable-to-fixed interest rate swap— 2.2 Level 2
    Nondesignated - currency forward contracts— 1.6 Level 2
Postretirement benefits and other long-term liabilities
Cash flow hedges - currency forward contracts — 7.3 Level 2
    Fair value hedges - fixed-to-fixed cross-currency swap21.5 — Level 2
Cash flow hedges - variable-to-fixed interest rate swap— 5.0 Level 2

The carrying values of our cash, accounts receivable, accounts payable and accrued liabilities approximate their fair values due to the short-term maturities of these instruments. 
 We estimated the fair value of the amounts outstanding on our debt, using available market information and other observable data, to be as follows:
 December 31, 2025December 31, 2024
Carrying AmountFair ValueCarrying AmountFair ValueInput
(in millions)
Revolving Credit Facility$— $— $— $— Level 2
Term Loan A Facility484.3 486.7 484.3 486.1 Level 2
Term Loan B Facility648.0 649.6 648.0 652.9 Level 2
7.75% Notes due 20331,250.0 1,268.8 — — Level 2
6.875% Notes due 2028250.0 249.8 400.0 395.0 Level 2
6.50% Notes due 2027— — 500.0 493.5 Level 2
6.375% Notes due 2032850.0 850.3 — — Level 2
5.00% Notes due 2029600.0 576.0 600.0 544.5 Level 2
Investments in our defined benefit pension plans are stated at fair value. See Note 8 - Employee Benefit Plans for additional fair value disclosures of our pension plan assets.
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Historical Timeline

Fiscal YearFiled
2025Feb 13, 2026Showing above
2018Feb 15, 2019

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.

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