Hayward Holdings, Inc.HAYW
Hayward Holdings, Inc. Fair Value Disclosure
Note 11. Fair Value Measurements
The Company is required to disclose the estimated fair values of all financial instruments, even if they are not carried at their fair value. The fair values of financial instruments are estimates based upon market conditions and perceived risks. These estimates require management’s judgment and may not be indicative of the future fair values of the assets and liabilities.
The accounting guidance for fair value measurements and disclosures establishes a three-level fair value hierarchy:
•Level 1 - Inputs are based on quoted prices in active markets for identical assets and liabilities.
•Level 2 - Inputs are based on observable inputs other than quoted prices in active markets for identical or similar assets and liabilities.
•Level 3 - One or more inputs are unobservable and significant.
Financial and nonfinancial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s financial instruments include cash and cash equivalents, short-term investments, accounts receivable, and accounts payable. The carrying amount of these instruments approximate fair value because of their short-term nature.
The Company’s interest rate swaps and foreign exchange contracts are measured in the financial statements at fair value on a recurring basis. The fair values of these instruments are estimated using industry standard valuation models using market-based observable inputs, including interest rate curves. These instruments are customary, over-the-counter contracts with various bank counterparties. Accordingly, the fair value measurements of the interest rate swaps and foreign exchange contracts are categorized as Level 2.
The Company’s investment plan assets as part of the nonqualified Hayward Industries Supplemental Retirement Plan (the “Supplemental Retirement Plan”) are presented in the financial statements at fair value on a recurring basis and are based on quoted market prices in active markets. Accordingly, the fair value measurements of the Supplemental Retirement Plan assets are categorized as Level 1. The value of investments related to the Supplemental Retirement Plan is included in other assets and a corresponding liability to participants is recorded in other liabilities. Refer to Note 18, “Retirement Plans” for further information on the plan assets.
The following table sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis (in thousands):
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||||||||||||||
Interest rate swaps | $ | — | $ | 4,680 | $ | — | $ | 4,680 | $ | — | $ | 17,723 | $ | — | $ | 17,723 | |||||||||||||||||||||||||||||||
Foreign exchange contracts | — | 129 | — | 129 | — | 2,339 | — | 2,339 | |||||||||||||||||||||||||||||||||||||||
Supplemental Retirement Plan assets | 10,405 | — | — | 10,405 | 7,741 | — | — | 7,741 | |||||||||||||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||
Interest rate swaps | $ | — | $ | 302 | $ | — | $ | 302 | $ | — | $ | 92 | $ | — | $ | 92 | |||||||||||||||||||||||||||||||
Foreign exchange contracts | — | 884 | — | 884 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Supplemental Retirement Plan liabilities | 10,405 | — | — | 10,405 | 7,741 | — | — | 7,741 | |||||||||||||||||||||||||||||||||||||||
The estimated fair value of the long-term debt and related current maturities (excluding finance leases and other bank debt) is based on observable quoted prices in active markets for similar liabilities and is classified as a Level 2 input. The Company's short-term investments are held-to-maturity fixed income securities and carried at amortized cost.
The following table sets forth the Company’s financial assets and liabilities that were not carried at fair value (in thousands):
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||
| Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
Short-term investments (1) | |||||||||||||||||||||||
Commercial paper | $ | 69,462 | $ | 69,462 | $ | — | $ | — | |||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Long-term debt and related current maturities | $ | 955,000 | $ | 960,969 | $ | 965,000 | $ | 970,433 | |||||||||||||||
(1) The Company held $69.5 million in held-to-maturity debt securities with maturity dates within one year. The fair value of the Company's held-to-maturity debt securities approximates their amortized cost. | |||||||||||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Mar 9, 2022 | |
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.