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FAIR VALUE MEASUREMENTS | 3 Months Ended
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Mar. 31, 2024
Fair Value Disclosures [Abstract] |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The Company prioritizes the inputs used to determine fair values in one of the following three categories: Level 1—Quoted market prices in active markets for identical assets or liabilities. Level 2—Inputs, other than quoted prices in active markets, that are observable, either directly or indirectly. Level 3—Unobservable inputs that are not corroborated by market data. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The consolidated condensed financial statements include financial instruments for which the fair market value of such instruments may differ from amounts reflected on a historical cost basis. Financial instruments of the Company consist of cash deposits, accounts and other receivables, investments, accounts payable, certain accrued liabilities, and borrowings under a revolving credit agreement. The carrying value of these financial instruments generally approximates fair value due to their short-term nature. Financial instruments also include notes payable. As of March 31, 2024, the fair value of the notes payable, based on Level 2 inputs, was $584.6 million. Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table summarizes the Company's financial instruments which are measured at fair value on a recurring basis (in millions):
March 31, 2024 | Level 1 |  | Level 2 |  | Level 3 |  | Total
Assets |  |  |  |  |  |  |
Cash equivalents | $ | 430.0 |  |  | $ | — |  |  | $ | — |  |  | $ | 430.0 |
Available-for-sale investments: |  |  |  |  |  |  |
Corporate debt securities | — |  |  | 541.5 |  |  | — |  |  | 541.5 |
Asset-backed securities | — |  |  | 144.2 |  |  | — |  |  | 144.2 |
United States government and agency securities | — |  |  | 61.4 |  |  | — |  |  | 61.4 |
Municipal securities | — |  |  | 2.7 |  |  | — |  |  | 2.7 |
Investments held for deferred compensation plans | 130.7 |  |  | — |  |  | — |  |  | 130.7 |
Derivatives | — |  |  | 57.5 |  |  | — |  |  | 57.5 |
| $ | 560.7 |  |  | $ | 807.3 |  |  | $ | — |  |  | $ | 1,368.0 |
Liabilities |  |  |  |  |  |  |
Derivatives | $ | — |  |  | $ | 4.9 |  |  | $ | — |  |  | $ | 4.9 |
Other | — |  |  | — |  |  | 5.0 |  |  | 5.0 |
| $ | — |  |  | $ | 4.9 |  |  | $ | 5.0 |  |  | $ | 9.9 |
December 31, 2023 |  |  |  |  |  |  |
Assets |  |  |  |  |  |  |
Cash equivalents | $ | 579.2 |  |  | $ | — |  |  | $ | — |  |  | $ | 579.2 |
Available-for-sale investments: |  |  |  |  |  |  |
Corporate debt securities | — |  |  | 641.8 |  |  | — |  |  | 641.8 |
Asset-backed securities | — |  |  | 184.3 |  |  | — |  |  | 184.3 |
United States government and agency securities | — |  |  | 70.0 |  |  | — |  |  | 70.0 |
Municipal securities | — |  |  | 2.6 |  |  | — |  |  | 2.6 |
Investments held for deferred compensation plans | 125.8 |  |  | — |  |  | — |  |  | 125.8 |
Derivatives | — |  |  | 47.1 |  |  | — |  |  | 47.1 |
| $ | 705.0 |  |  | $ | 945.8 |  |  | $ | — |  |  | $ | 1,650.8 |
Liabilities |  |  |  |  |  |  |
Derivatives | $ | — |  |  | $ | 15.2 |  |  | $ | — |  |  | $ | 15.2 |
Other | — |  |  | — |  |  | 10.3 |  |  | 10.3 |
| $ | — |  |  | $ | 15.2 |  |  | $ | 10.3 |  |  | $ | 25.5 |
Cash Equivalents and Available-for-sale Investments Cash equivalents included money market funds for the periods presented above. The Company estimates the fair values of its money market funds based on quoted prices in active markets for identical assets. The Company estimates the fair values of its corporate debt securities, asset-backed securities, United States and foreign government and agency securities, and municipal securities by taking into consideration valuations obtained from third-party pricing services. The pricing services use industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades and broker-dealer quotes on the same or similar securities, benchmark yields, credit spreads, prepayment and default projections based on historical data, and other observable inputs. The Company independently reviews and validates the pricing received from the third-party pricing service by comparing the prices to prices reported by a secondary pricing source. The Company’s validation procedures have not resulted in an adjustment to the pricing received from the pricing service. Deferred Compensation Plans The Company holds investments related to its deferred compensation plans. The investments are in a variety of stock, bond and money market mutual funds. The fair values of these investments are based on quoted market prices. Derivative Instruments The Company uses derivative financial instruments in the form of foreign currency forward exchange contracts and cross-currency swap contracts to manage foreign currency exposures. All derivatives contracts are recognized on the balance sheet at their fair value. The fair value of the derivative financial instruments was measured using quoted foreign exchange rates, interest rates, yield curves, and cross-currency swap basis rates. The estimates presented herein are not necessarily indicative of the amounts that the Company could realize in a current market exchange. Contingent Consideration Liabilities Certain of the Company's acquisitions involve contingent consideration arrangements. Payment of additional consideration is contingent upon the acquired company reaching certain performance milestones, such as attaining specified sales levels or obtaining regulatory approvals. These contingent consideration liabilities are measured at estimated fair value using either a probability weighted discounted cash flow analysis or a Monte Carlo simulation model, both of which consider significant unobservable inputs. As of March 31, 2024, the probability of milestone achievement was determined to be 0% and, accordingly, the contingent consideration liability was zero. The following tables summarize the changes in fair value of Level 3 financial instruments measured at fair value on a recurring basis (in millions):
| Contingent Consideration |  | Other |  | Total
Balance at December 31, 2023 | $ | — |  |  | $ | 10.3 |  |  | $ | 10.3 |
Changes in fair value | — |  |  | (5.3) |  |  | (5.3) |
Balance at March 31, 2024 | $ | — |  |  | $ | 5.0 |  |  | $ | 5.0 |
| Contingent Consideration |  | Other |  | Total
Balance at December 31, 2022 | $ | 26.2 |  |  | $ | 14.0 |  |  | $ | 40.2 |
Changes in fair value | 0.7 |  |  | — |  |  | 0.7 |
Balance at March 31, 2023 | $ | 26.9 |  |  | $ | 14.0 |  |  | $ | 40.9 |

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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 -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-2 + Details
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