Fair Value Measurements

The Company applies the provisions of ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value each reporting period and its nonfinancial assets and liabilities that are re-measured and reported at fair value on a non-recurring basis. Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability.

Fair Value Hierarchy

ASC 820 establishes a three-level valuation hierarchy for disclosure of fair value measurements. Financial assets and liabilities are categorized within the valuation hierarchy based upon the lowest level of input that is significant to the measurement of fair value. The three levels of the hierarchy are defined as follows:


•	Level 1—Inputs to the valuation methodology are quoted market prices for identical assets or liabilities.


•	Level 2—Inputs to the valuation methodology are other observable inputs, including quoted market prices for similar assets or liabilities and market-corroborated inputs.


•	Level 3—Inputs to the valuation methodology are unobservable inputs based on management’s best estimate of inputs market participants would use in pricing the asset or liability at the measurement date, including assumptions about risk.

Assets/Liabilities Measured and Recorded at Fair Value on a Recurring Basis

The Company has equity investments in publicly-traded companies and mutual funds, both of which are valued using quoted market prices, representing Level 1 assets, and investments in interest rate cap derivative instruments, which are valued using analyses obtained from independent third party valuation specialists based on market observable inputs, representing Level 2 assets. The fair values of the Company's interest rate cap derivative instruments represent the estimated amounts the Company would receive to terminate the contracts. Refer to Note 2 for further discussion and information on both the equity investments and the interest rate cap derivative instruments.

The Company has a payment obligation to the participants under its Nonqualified Deferred Compensation Plan (“DCP”). This liability is recorded at fair value based on the underlying value of certain hypothetical investments under the DCP as designated by each participant for their benefit. Since the value of the DCP obligation is based on market prices, the liability is classified within Level 1. In addition, in fiscal 2013, the Company had a contingent consideration liability related to its acquisition of Interlace Medical, Inc. ("Interlace") that was recorded at fair value and based on Level 3 inputs.

Assets and liabilities measured and recorded at fair value on a recurring basis consisted of the following:



			Fair Value Measurements at September 26, 2015
	Carrying Value		Quoted Prices in Active Market for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Marketable securities:
Equity securities	$	15.2	$	15.2	$	—	$	—
Mutual funds	5.6		5.6		—		—
Interest rate cap - derivative	6.9		—		6.9		—
Total	$	27.7	$	20.8	$	6.9	$	—
Liabilities:
Deferred compensation liabilities	$	29.4	$	29.4	$	—	$	—
Total	$	29.4	$	29.4	$	—	$	—



			Fair Value Measurements at September 27, 2014
	Carrying Value		Quoted Prices in Active Market for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Marketable securities:
Equity securities	$	24.4	$	24.4	$	—	$	—
Mutual funds	15.4		15.4		—		—
Total	$	39.8	$	39.8	$	—	$	—
Liabilities:
Deferred compensation liabilities	$	35.8	$	35.8	$	—	$	—
Total	$	35.8	$	35.8	$	—	$	—

There were no Level 3 assets or liabilities outstanding during fiscal 2015. Changes in the fair value of recurring fair value measurements using significant unobservable inputs (Level 3), which solely consisted of contingent consideration liabilities, during the years ended September 27, 2014, and September 28, 2013 were as follows:



	2014			2013
Balance at beginning of period	$	3.8		$	86.4
Contingent consideration recorded at acquisition	—			0.5
Fair value adjustments	—			11.3
Payments / Accruals	(3.8		)	(94.4		)
Balance at end of period	$	—		$	3.8

Assets Measured and Recorded at Fair Value on a Nonrecurring Basis

The Company remeasures the fair value of certain assets and liabilities upon the occurrence of certain events. Such assets are comprised of cost-method equity investments and long-lived assets, including property, plant and equipment, intangible assets and goodwill. During fiscal 2013, the Company recorded goodwill impairment charges of $1.1 billion related to its Molecular Diagnostics reporting unit. This adjustment falls within Level 3 of the fair value hierarchy due to the use of significant unobservable inputs to determine fair value. The fair value measurement was determined using a DCF analysis, and the amount and timing of future cash flows within the analysis were based on the Company’s most recent operational budgets, long-range strategic plans and other estimates at the time such remeasurements were made.

In the fourth quarter of fiscal 2014, the Company recorded a $5.1 million impairment charge within its Diagnostics segment to record its remaining IPR&D assets at fair value. This adjustment falls within Level 3 of the fair value hierarchy.

In the second quarter of fiscal 2014, the Company recorded an impairment charge of $28.6 million within its Breast Health segment, which was comprised of $27.1 million for intangible assets and $1.5 million for property and equipment. This adjustment falls within Level 3 of the fair value hierarchy.

In the first quarter of fiscal 2014, the Company recorded a $3.1 million impairment charge to record certain of its buildings at fair value related to the shutdown of its Hitec Imaging organic photoconductor manufacturing line. This adjustment falls within Level 3 of the fair value hierarchy.

The Company holds certain cost-method equity investments in non-publicly traded securities aggregating $4.2 million and $5.2 million at September 26, 2015 and September 27, 2014, respectively, which are included in other long-term assets on the Company’s Consolidated Balance Sheets. These investments are generally carried at cost, less any write-downs for other-than-temporary impairment charges. To determine the fair value of these investments, the Company uses all available financial information related to the entities, including information based on recent or pending third-party equity investments in these entities. In certain instances, a cost method investment’s fair value is not estimated as there are no identified events or changes in circumstances that may have a significant adverse effect on the fair value of the investment and to do so would be impractical. During fiscal 2014 and 2013, the Company recorded other-than-temporary impairment charges of $6.9 million and $6.4 million, respectively, related to its cost-method equity investments to adjust their carrying amounts to fair value.

The following chart depicts certain assets presented at fair value using level 3 inputs under the fair value hierarchy measured on a nonrecurring basis for which the Company has recorded impairment charges:



			Fair Value Measurements Using
	Fair Value		Quoted Prices in Active Market for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)		Total Losses
Fiscal 2014:
Intangible assets	$	36.2	—	—	$	36.2	$	(32.2	)
Property and equipment	1.0		—	—	1.0		(1.5		)
Buildings	1.4		—	—	1.4		(3.1		)
Cost-method equity investments	0.8		—	—	0.8		(6.9		)
							$	(43.7	)
Fiscal 2013:
Goodwill	$	277.8	—	—	$	277.8	$	(1,117.4	)
Equipment	1.4		—	—	1.4		(5.0		)
Cost-method equity investments	1.5		—	—	1.5		(6.4		)
							$	(1,128.8	)

The above fair value amounts represent only those individual assets remeasured and not the consolidated balances. Refer to Note 4 for disclosure of the nonrecurring fair value measurement related to the debt extinguishment losses recorded in fiscal 2015, 2014 and 2013.

Disclosure of Fair Value of Financial Instruments

The Company’s financial instruments mainly consist of cash, accounts receivable, marketable securities, cost-method equity investments, insurance contracts, interest rate cap agreements, DCP liability, accounts payable and debt obligations. The carrying amounts of the Company’s cash, accounts receivable and accounts payable approximate their fair value due to the short-term nature of these instruments. The Company’s marketable securities and interest rate cap agreements are recorded at fair value. The carrying amount of the insurance contracts are recorded at the cash surrender value, as required by U.S. GAAP, which approximates fair value, and the related DCP liability is recorded at fair value. The Company believes the carrying amounts of its cost-method equity investments approximate fair value.

Amounts outstanding under the Company’s Credit Agreement of $1.66 billion aggregate principal are subject to variable rates of interest based on current market rates, and as such, the Company believes the carrying amount of these obligations approximates fair value. The Company’s Senior Notes had a fair value of approximately $1.03 billion as of both September 26, 2015 and September 27, 2014 based on their trading price, representing a Level 1 measurement. The fair value of the Company’s Convertible Notes is based on the trading prices of the respective notes and represents a Level 1 measurement. Refer to Note 4 for the carrying amounts of the various components of the Company’s debt.

The estimated fair values of the Company’s Convertible Notes at September 26, 2015 and September 27, 2014 are as follows:



	2015		2014
2010 Notes	264.1		536.6
2012 Notes	688.2		531.7
2013 Notes	471.8		401.1
	$	1,424.1	$	1,469.4