Fair Value Measurements

6 Months Ended

Apr. 01, 2023

Fair Value Measurement and Measurement Inputs, Recurring and Nonrecurring [Text Block]

Fair Value Measurements

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

The Company has investments in derivative instruments comprised of interest rate swaps, forward foreign currency contracts and foreign currency option contracts, 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 these derivative contracts represent the estimated amounts the Company would receive or pay to terminate the contracts. Refer to Note 9 for further discussion and information on derivative contracts. In addition, the Company has a contingent consideration liability that is recorded at fair value, which is based on Level 3 inputs. The contingent consideration liability as of April 1, 2023 and March 26, 2022 was related to the Acessa acquisition.

Assets and liabilities measured and recorded at fair value on a recurring basis consisted of the following at April 1, 2023:


			Fair Value at Reporting Date Using
	Balance as of April 1, 2023		Quoted Prices in Active Market for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:

Interest rate swaps	$	27.2	$	—	$	27.2	$	—

Forward foreign currency contracts	2.5		—		2.5		—
Foreign currency option contracts	0.3		—		0.3		—
Total	$	30.0	$	—	$	30.0	$	—
Liabilities:
Contingent consideration	$	3.4	$	—	$	—	$	3.4
Interest rate swap	0.4		—		0.4		—
Forward foreign currency contracts	0.5		—		0.5		—
Total	$	4.3	$	—	$	0.9	$	3.4

Liabilities Measured and Recorded at Fair Value on a Recurring Basis

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 three and six month periods ended April 1, 2023 and March 26, 2022 were as follows:


		Three Month Ended				Six Months Ended
		April 1, 2023		March 26, 2022		April 1, 2023		March 26, 2022
Balance at beginning of period		$	23.4	$	71.0	$	23.4	$	75.1
	Contingent consideration recorded at acquisition	—		—		—		—
	Fair value adjustments	(12.4)		—		(12.4)		(4.1)
	Payments	(7.6)		(12.2)		(7.6)		(12.2)
Balance at end of period		$	3.4	$	58.8	$	3.4	$	58.8

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 equity investments and long-lived assets, including property, plant and equipment, intangible assets, and goodwill. During the first quarter of fiscal 2022, the Company recorded a $4.3 million charge to write-off an equity method investment acquired in the Mobidiag acquisition. There were no other remeasurements in the three and six months ended April 1, 2023 and March 26, 2022.

Disclosure of Fair Value of Financial Instruments

The Company’s financial instruments mainly consist of cash and cash equivalents, accounts receivable, equity investments, interest rate swaps, forward foreign currency contracts, foreign currency option contracts, insurance contracts, accounts payable and debt obligations. The carrying amounts of the Company’s cash and cash equivalents, accounts receivable and accounts payable approximate their fair value due to the short-term nature of these instruments. The Company’s interest rate swaps, forward foreign currency contracts and foreign currency option contracts 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. The Company believes the carrying amounts of its equity investments approximate fair value.

Amounts outstanding under the Company’s 2021 Credit Agreement of $1.5 billion aggregate principal as of April 1, 2023 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 4.625% Senior Notes due 2028 (the “2028 Senior Notes”) and 3.250% Senior Notes due 2029 (the “2029 Senior Notes”) had fair values of $388.9 million and $848.4 million, respectively, as of April 1, 2023 based on their trading prices, representing a Level 1 measurement. Refer to Note 7 for the carrying amounts of the various components of the Company’s debt.