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Fair Value | 12 Months Ended
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Dec. 31, 2022
Fair Value Disclosures [Abstract] |
Fair Value | Fair Value Financial assets and liabilities are valued using market prices on active markets (Level 1), less active markets (Level 2) and little or no market activity (Level 3). Level 1 instrument valuations are obtained from real-time quotes for transactions in active exchange markets involving identical assets. Level 2 instrument valuations are obtained from readily available pricing sources for comparable instruments, identical instruments in less active markets, or models using market observable inputs. Level 3 instrument valuations typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. Debt – Roper’s debt at December 31, 2022 included $6,700.0 of fixed-rate senior notes with the following fair values:
$700 3.650% senior notes due 2023 | 692 |
$500 2.350% senior notes due 2024 | 478 |
$300 3.850% senior notes due 2025 | 291 |
$700 1.000% senior notes due 2025 | 629 |
$700 3.800% senior notes due 2026 | 670 |
$700 1.400% senior notes due 2027 | 594 |
$800 4.200% senior notes due 2028 | 772 |
$700 2.950% senior notes due 2029 | 608 |
$600 2.000% senior notes due 2030 | 481 |
$1,000 1.750% senior notes due 2031 | 770 |
The fair values of the senior notes are based on the trading prices of the notes, which the Company has determined to be Level 2 in the FASB fair value hierarchy. Indicor Investment – In connection with the Indicor Transaction, the Company retained an initial 49% equity interest in Indicor valued at $535.0 as of the transaction close date. The valuation is based on the implied equity value associated with the sale price of the 51% equity interest in Indicor to CD&R for approximately $829, inclusive of the Unit Adjustment received by CD&R as discussed below. Roper’s equity interest is comprised of an equity value for the initial 49% retained ownership of approximately $650, partially offset by approximately $115 of anticipated dilution associated with the Unit Adjustment. The fair value of the investment reflects management’s estimate of assumptions that market participants would use in pricing the equity interest, which the Company has determined to be Level 3 in the FASB fair value hierarchy. As part of the investment, Roper is also required to make quarterly payments (“Unit Adjustment”), to CD&R, either (i) in cash, with total payments of approximately $29 per year on a pre-tax basis, or (ii) in-kind through the transfer of Roper’s equity interests in Indicor to CD&R, of approximately a 1.7% ownership interest on an annual basis. Roper intends to make these quarterly payments in-kind. Roper valued the Unit Adjustment at approximately $115 based on an expected investment horizon of 5 years. The Company's obligation to make such quarterly payments will cease upon the earlier of: •Indicor achieving $425.0 of earnings before interest, taxes, depreciation and amortization in any three twelve month periods, whether or not consecutive; or •Upon the initial public offering of Indicor. In the event of a sale of Indicor, CD&R would be entitled to a liquidation preference equal to its initial investment of approximately $829, plus any Unit Adjustment paid in-kind. Management’s valuation assumes the expected exit of the Indicor investment is an initial public offering which is not subject to the liquidation preference. Roper’s approval is required prior to a sale of Indicor which would trigger the liquidation preference. The assessment of fair value for the equity investment requires significant judgments to be made by management. Although our assumptions are considered reasonable and are consistent with the plans and estimates, there is significant judgment in determining these assumptions. Changes in estimates or the application of alternative assumptions could produce significantly different results. There were no changes in fair value between the initial recognition and December 31, 2022. Subsequent changes in fair value will be recognized as a discrete non-operating line item in the Consolidated Statements of Operations beginning in the first quarter of 2023.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI https://asc.fasb.org/extlink&oid=126976982&loc=d3e19207-110258 + Details
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