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Fair Value of Financial Instruments
 9 Months Ended
Sep. 30, 2024
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments
10.
Fair Value of Financial Instruments

 

The following tables set forth the Company’s financial instruments recorded at fair value on a recurring basis and present them within the fair value hierarchy using the lowest level of input that is significant to the fair value measurement (in millions):

September 30, 2024

 

Total

 

 

Quoted Prices
in Active
Markets
Available
(Level 1)

 

 

Significant
Other
Observable
Inputs
(Level 2)

 

 

Significant
Unobservable
Inputs
(Level 3)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Time deposits and money market funds

 

$

18.3

 

 

$

—

 

 

$

18.3

 

 

$

—

 

Interest rate and cross-currency swap agreements

 

 

13.5

 

 

 

—

 

 

 

13.5

 

 

 

—

 

Forward currency contracts

 

 

1.0

 

 

 

—

 

 

 

1.0

 

 

 

—

 

Embedded derivatives in purchase and delivery contracts

 

 

0.5

 

 

 

—

 

 

 

0.5

 

 

 

—

 

Fixed price commodity contracts

 

 

0.2

 

 

 

—

 

 

 

0.2

 

 

 

—

 

Debt securities available for sale

 

 

1.2

 

 

 

—

 

 

 

—

 

 

 

1.2

 

Total assets recorded at fair value

 

$

34.7

 

 

$

—

 

 

$

33.5

 

 

$

1.2

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Contingent consideration

 

$

21.5

 

 

$

—

 

 

$

—

 

 

$

21.5

 

Hybrid instruments liabilities

 

 

73.7

 

 

 

—

 

 

 

—

 

 

 

73.7

 

Liability awards

 

 

0.4

 

 

 

—

 

 

 

—

 

 

 

0.4

 

Interest rate and cross-currency swap agreements

 

 

26.8

 

 

 

—

 

 

 

26.8

 

 

 

—

 

Forward currency contracts

 

 

1.1

 

 

 

—

 

 

 

1.1

 

 

 

—

 

Equity interest purchase option liability

 

 

15.2

 

 

 

—

 

 

 

—

 

 

 

15.2

 

Total liabilities recorded at fair value

 

$

138.7

 

 

$

—

 

 

$

27.9

 

 

$

110.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2023

 

Total

 

 

Quoted Prices
in Active
Markets
Available
(Level 1)

 

 

Significant
Other
Observable
Inputs
(Level 2)

 

 

Significant
Unobservable
Inputs
(Level 3)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Time deposits and money market funds

 

$

226.9

 

 

$

—

 

 

$

226.9

 

 

$

—

 

Interest rate and cross-currency swap agreements

 

 

20.3

 

 

 

—

 

 

 

20.3

 

 

 

—

 

Forward currency contracts

 

 

1.3

 

 

 

—

 

 

 

1.3

 

 

 

—

 

Embedded derivatives in purchase and delivery contracts

 

 

1.2

 

 

 

—

 

 

 

1.2

 

 

 

—

 

Fixed price commodity contracts

 

 

0.3

 

 

 

—

 

 

 

0.3

 

 

 

—

 

Debt securities available for sale

 

 

1.2

 

 

 

—

 

 

 

—

 

 

 

1.2

 

Total assets recorded at fair value

 

$

251.2

 

 

$

—

 

 

$

250.0

 

 

$

1.2

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Contingent consideration

 

$

12.3

 

 

$

—

 

 

$

—

 

 

$

12.3

 

Hybrid instruments liabilities

 

 

70.5

 

 

 

—

 

 

 

—

 

 

 

70.5

 

Liability awards

 

 

0.7

 

 

 

—

 

 

 

—

 

 

 

0.7

 

Interest rate and cross-currency swap agreements

 

 

26.8

 

 

 

—

 

 

 

26.8

 

 

 

—

 

Forward currency contracts

 

 

0.6

 

 

 

—

 

 

 

0.6

 

 

 

—

 

Total liabilities recorded at fair value

 

$

110.9

 

 

$

—

 

 

$

27.4

 

 

$

83.5

 

Derivative financial instruments are classified within Level 2 because there is not an active market for each derivative contract. However, the inputs used to calculate the value of the instruments are obtained from active markets.

The Company measures certain assets and liabilities at fair value with changes in fair value recognized in earnings. Fair value treatment may be elected either upon initial recognition of an eligible asset or liability or, for an existing asset or liability, if an event triggers a new basis of accounting. The Company did not elect to remeasure any of its existing financial assets or liabilities and did not elect the fair value option for any financial assets or liabilities which originated during the nine months ended September 30, 2024, or the year ended December 31, 2023.

 

 

Debt securities:

Debt securities consist of investments in redeemable preferred stock. Debt securities are classified as either current or long-term investments based on their contractual maturities unless the Company intends to sell an investment within the next twelve months, in which case it is classified as current on the consolidated balance sheets. Debt securities are classified as available for sale and are carried at fair value.

Contingent Consideration:

The following table sets forth the changes in contingent consideration liabilities (in millions):

 

 

 

 

Balance at December 31, 2023

 

$

12.3

 

Current period additions

 

 

13.4

 

Current period adjustments

 

 

2.3

 

Current period settlements

 

 

(6.6

)

Foreign currency effect

 

 

0.1

 

Balance at September 30, 2024

 

$

21.5

 

Changes in fair value subsequent to acquisition are recognized in “Acquisition-related expenses, net” included in Other Charges, net, in the consolidated statements of income and comprehensive income.

Hybrid instruments liabilities:

As part of the 2018 Mestrelab Research, S.L. (“Mestrelab”), 2022 PreOmics, 2023 Biognosys, 2023 Zontal, and 2023 MIRO acquisitions and certain other majority owned acquisitions, the Company entered into agreements with the noncontrolling interest holders that provide the Company with the right to purchase, and the noncontrolling interest holders with the right to sell, the remaining ownerships for cash at contractually defined redemption values. These rights (embedded derivatives) can be adjusted upon certain events related to post combination employment services. As the options are tied to continued employment, the Company classified the hybrid instruments (noncontrolling interests with embedded derivatives) as long-term liabilities on the consolidated balance sheet. Subsequent to the acquisitions, the carrying value of the hybrid instruments are remeasured to fair value with changes recorded to stock-based compensation expense in proportion to the respective requisite service period vested. The Company classified the hybrid instruments as Level 3 in the fair value hierarchy.

The following table sets forth the changes in hybrid instruments liability (in millions):

 

 

 

 

 

Balance at December 31, 2023

 

$

70.5

 

Acquisitions

 

 

—

 

Current period adjustments

 

 

2.9

 

Current period settlements

 

 

(0.1

)

Foreign currency effect

 

 

0.4

 

Balance at September 30, 2024

 

$

73.7

 

 

See Note 19, Subsequent Events, for information regarding the Company’s exercise of its call option with respect to Mestrelab.