UNIVERSAL LOGISTICS HOLDINGS, INC. Fair Value Disclosure
ASC Topic 820, “Fair Value Measurements and Disclosures,” defines fair value as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date and expanded disclosures with respect to fair value measurements.
ASC Topic 820 also establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:
We have segregated all financial assets that are measured at fair value on a recurring basis into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date in the tables below (in thousands):
|
|
December 31, 2025 |
|
|||||||||||||
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Fair Value |
|
||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents |
|
$ |
4 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
4 |
|
Marketable securities |
|
|
10,351 |
|
|
|
— |
|
|
|
— |
|
|
|
10,351 |
|
Interest rate swap |
|
|
— |
|
|
|
341 |
|
|
|
— |
|
|
|
341 |
|
Total Assets |
|
$ |
10,355 |
|
|
$ |
341 |
|
|
$ |
— |
|
|
$ |
10,696 |
|
|
|
December 31, 2024 |
|
|||||||||||||
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Fair Value |
|
||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents |
|
$ |
26 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
26 |
|
Marketable securities |
|
|
11,590 |
|
|
|
— |
|
|
|
— |
|
|
|
11,590 |
|
Interest rate swap |
|
|
— |
|
|
|
1,589 |
|
|
|
— |
|
|
|
1,589 |
|
Total Assets |
|
$ |
11,616 |
|
|
$ |
1,589 |
|
|
$ |
— |
|
|
$ |
13,205 |
|
The valuation techniques used to measure fair value for the items in the tables above are as follows:
Our Revolving Credit Facility, Real Estate Facility and one equipment note consist of variable rate borrowings. We categorize borrowings under these credit agreements as Level 2 in the fair value hierarchy. The carrying value of these borrowings approximate fair value because the applicable interest rates are adjusted frequently based on short-term market rates.
For our Equipment Financing with fixed rates and CTL, the fair values are estimated using discounted cash flow analyses, based on our current incremental borrowing rates for similar types of borrowing arrangements. We categorize borrowings under this credit agreement as Level 2 in the fair value hierarchy. The carrying values and estimated fair values of these promissory notes at December 31, 2025 is summarized as follows:
|
|
2025 |
|
|||||
|
|
Carrying Value |
|
|
Estimated Fair |
|
||
Equipment promissory notes |
|
$ |
272,726 |
|
|
$ |
274,363 |
|
CTL promissory note |
|
$ |
193,324 |
|
|
$ |
193,792 |
|
We have not elected the fair value option for any of our financial instruments.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 16, 2026 | Showing above |
| 2024 | Mar 17, 2025 | |
| 2023 | Mar 15, 2024 | |
| 2022 | Mar 16, 2023 | |
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.