Fair Value Measurements

6 Months Ended

Mar. 30, 2024

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 money market funds, United States Treasury bills and commercial paper that are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. These investments are classified as Cash and cash equivalents on the Consolidated Balance Sheets.

The Company also has investments in derivative instruments comprised of interest rate swaps and forward foreign currency 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 11 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 following table summarizes certain fair value information at March 30, 2024 and September 30, 2023 for investment assets and other liabilities measured at fair value on a recurring basis, as well as the carrying amount and amortized cost of certain investments.


			Fair Value at Reporting Date Using
	Fair Value		Quoted Prices in Active Market for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
March 30, 2024
Assets:
Money market mutual funds	$	410.2	$	410.2	$	—	$	—
U.S. Treasury bills	348.1		348.1		—		—
Commercial paper	49.8		49.8		—		—
Interest rate swaps	14.2		—		14.2		—

Forward foreign currency contracts	2.9		—		2.9		—

Total	$	825.2	$	808.1	$	17.1	$	—
Liabilities:
Contingent consideration	$	1.1	$	—	$	—	$	1.1

Forward foreign currency contracts	0.2		—		0.2		—
Total	$	1.3	$	—	$	0.2	$	1.1

September 30, 2023
Assets:


Interest rate swaps	$	26.9	$	—	$	26.9	$	—
Forward foreign currency contracts	8.4		—		8.4		—

Total	$	35.3	$	—	$	35.3	$	—
Liabilities:
Contingent consideration	$	2.0	$	—	$	—	$	2.0

Total	$	2.0	$	—	$	—	$	2.0

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 March 30, 2024 and April 1, 2023 were as follows:


		Three Months Ended				Six Months Ended
		March 30, 2024		April 1, 2023		March 30, 2024		April 1, 2023
Balance at beginning of period		$	3.7	$	23.4	$	2.0	$	23.4
	Contingent consideration recorded at acquisition	—		—		—		—
	Fair value adjustments	—		(12.4)		1.7		(12.4)
	Payments	(2.6)		(7.6)		(2.6)		(7.6)
Balance at end of period		$	1.1	$	3.4	$	1.1	$	3.4

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 second quarter of fiscal 2024, the Company recorded intangible asset impairment charges of $25.9 million and $0.9 million, respectively, related to its BioZorb developed technology and trade name intangible assets acquired in the Focal acquisition, which is within the Breast Health reportable segment (see Note 18 for further discussion), reducing the carrying value of the assets to $13.9 million and $0.5 million, respectively. During the first quarter of fiscal 2024, the Company recorded a $12.5 million impairment charge for right of use lease assets related to the planned closure of its Mobidiag facilities in Finland and France (see Note 8 for further discussion), reducing the carrying value to zero. In addition, during the first quarter of fiscal 2024, the Company recorded a $4.3 million impairment charge for an in-process research and development

project from the Mobidiag acquisition, reducing the carrying value of this asset to $22.4 million. There were no other remeasurements in the three and six months ended March 30, 2024 and April 1, 2023.

Disclosure of Fair Value of Financial Instruments

The Company’s financial instruments mainly consist of cash and cash equivalents, United States Treasury bills, commercial paper, accounts receivable, equity investments, interest rate swaps, forward foreign currency 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 United States Treasury bills, commercial paper, interest rate swaps and forward foreign currency 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.

The Company’s cash and cash equivalents, including current marketable securities, as of March 30, 2024 are as follows:


	Valuation								Balance Sheet Classification
in millions	Cost		Unrealized Gains		Unrealized Losses		Fair Value		Cash and cash equivalents		Investments
Cash	$	1,371.9	$	—	$	—	$	1,371.9	$	1,371.9	$	—
Money market mutual funds	410.2		—		—		410.2		410.2		—
U.S. Treasury bills	348.0		0.1		—		348.1		348.1		—
Commercial paper	49.8		—		—		49.8		49.8		—
Total	$	2,179.9	$	0.1	$	—	$	2,180.0	$	2,180.0	$	—

The Company classifies its debt securities as available-for-sale and records them at fair value, with changes in fair value reported as a component of accumulated other comprehensive income (loss), which was immaterial for the period ended March 30, 2024. The Company periodically assesses these securities for potential impairment losses and credit losses. The amount of credit losses, if any, will be determined by comparing the difference between the present value of future cash flows expected to be collected on these securities and the amortized cost. There were no impairments and credit losses related to available-for-sale securities for the three and six months ended March 30, 2024.

The Company classifies all highly liquid investments with stated maturities of three months or less from the date of purchase as cash equivalents. The Company reviews the fair value hierarchy classification on a quarterly basis. Changes in the ability to observe valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. There were no transfers into or out of Level 3 during the three and six months ended March 30, 2024 and April 1, 2023, respectively. There were no sales of available-for-sale securities during the three and six months ended March 30, 2024.

The March 30, 2024 balance of available-for-sale debt securities by contractual maturity is shown in the following table. The fair value of the available-for-sale securities by maturity as of March 30, 2024 and September 30, 2023 are as follows:


	March 30, 2024		September 30, 2023
in millions	Fair Value		Fair Value
Due in three months or less	$	397.9	$	—


Total available-for-sale securities	$	397.9	$	—

Amounts outstanding under the Company’s 2021 Credit Agreement of $1.2 billion aggregate principal as of March 30, 2024 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 $385.9 million and $852.6 million, respectively, as of March 30, 2024 based on their trading prices, representing a Level 1 measurement.