Company: LGIH
Filing Date: 2025-11-04
Form Type: 10-Q
Source: 0001580670-25-000076
Chunk: 27

Company: LGI Homes, Inc.
Filing Date: 2025-11-04
Form: 10-Q
Item: Part I, Item 1
Chunk 27
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, or quoted prices in markets that are not active.Level 3 - Fair value is determined using one or more significant inputs that are unobservable in active markets at the                measurement date, such as a pricing model, discounted cash flow or similar technique.We utilize fair value measurements to account for certain items and account balances within our consolidated financial statements. Fair value measurements may also be utilized on a nonrecurring basis, such as for the impairment of long-lived assets. The fair value of financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and certain accrued liabilities, approximate their carrying amounts due to the short-term nature of these instruments. As of September 30, 2025, the Credit Agreement’s carrying value approximates market value since it has a floating interest rate, which increases or decreases with market interest rates and our leverage ratio.In order to determine the fair value of each of the 2028 Senior Notes, the 2029 Senior Notes, the 2032 Senior Notes and the Loan Agreement, the future contractual cash flows are discounted at our estimate of current market rates of interest, which were determined based upon the average interest rates of similar senior notes within the homebuilding industry (Level 2 measurement).The following table below shows the level and measurement of liabilities at September 30, 2025 and December 31, 2024 (in thousands):September 30, 2025December 31, 2024Fair Value HierarchyCarrying ValueEstimated Fair Value Carrying ValueEstimated Fair Value 2028 Senior Notes (1)Level 2$400,000 $439,084 $400,000 $436,783 2029 Senior Notes (1)Level 2$300,000 $285,158 $300,000 $274,692 2032 Senior Notes (1)Level 2$400,000 $436,416 $400,000 $421,247 Loan Agreement (1)Level 2$50,000 $52,120 $— $— 

(1)See Note 4 for more details regarding the offerings of the 2028 Senior Notes, the 2029 Senior Notes and the  2032 Senior Notes and the Loan Agreement. 

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10.     COMMITMENTS AND CONTINGENCIES

ContingenciesIn the ordinary course of doing business, we are subject to claims or proceedings from time to time relating to the purchase, development and sale of real