Fair Value Measurements

9 Months Ended

Oct. 01, 2021

Note 11: Fair Value Measurements

Fair Value of Financial Instruments

During the quarter ended October 1, 2021, the Company began investing portions of its excess cash in different marketable securities, which are classified as available-for-sale. The following table summarizes the Company's financial assets and liabilities, excluding pension assets, disaggregated by the security type, measured at fair value on a recurring basis (in millions):


As of October 1, 2021									Fair Value Level
Description	Amortized Cost		Unrealized gains		Unrealized losses		Fair value		Level 1		Level 2
Assets:
Cash and cash equivalents:
Demand and time deposits	$	8.1	$	—	$	—	$	8.1	$	8.1	$	—
Money market funds	2.3		—		—		2.3		2.3		—
Corporate bonds	2.5		—		—		2.5		—		2.5
Commercial paper	4.0		—		—		4.0		—		4.0

Other current assets:
Corporate bonds	12.7		—		—		12.7		—		12.7
Certificate of deposit	2.0		—		—		2.0		—		2.0
Commercial paper	4.9		—		—		4.9		2.9		2.0
US Treasury bonds	0.4		—		—		0.4		—		0.4

Other assets:
Corporate bonds	19.0		—		—		19.0		—		19.0
Certificate of deposit	0.5		—		—		0.5		—		0.5
US Treasury bonds	1.5		—		—		1.5		—		1.5

The investments included in other assets have maturity dates ranging between one and five years.


As of December 31, 2020									Fair Value Level
Description	Amortized Cost		Unrealized gains		Unrealized losses		Fair value		Level 1		Level 2
Assets:
Cash and cash equivalents:
Demand and time deposits	$	8.5	$	—	$	—	$	8.5	$	8.5	$	—

Other

The carrying amounts of other current assets and liabilities, such as accounts receivable and accounts payable, approximate fair value based on the short-term nature of these instruments.

Fair Value of Long-Term Debt, including Current Portion

The carrying amounts and fair values of the Company’s long-term borrowings were as follows (in millions):


	As of
	October 1, 2021				December 31, 2020
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt, including current portion (1)
Convertible notes	$	845.7	$	1,443.1	$	515.6	$	967.1
Other long-term debt	2,267.8		2,259.7		2,975.7		2,966.8

(1) Carrying amounts shown are net of debt discount and debt issuance costs.

The fair values of the 3.875% Notes, 1.625% Notes and 0% Notes were estimated based on market prices in active markets (Level 1). The fair value of the Term Loan "B" Facility was estimated based on discounting the remaining principal and interest payments using current market rates for similar debt (Level 2).

- 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 + Details