XML 23 R11.htm IDEA: XBRL DOCUMENT v3.22.0.1
Fair Value Measurements
 12 Months Ended
Dec. 31, 2021
Fair Value Disclosures [Abstract]  
Fair Value Measurements FAIR VALUE MEASUREMENTS
The fair value of the Company’s financial instruments reflects the amounts that the Company estimates to receive in connection with the sale of an asset or paid in connection with the transfer of a liability in an orderly transaction between market participants at the measurement date (exit price). The fair value hierarchy prioritizes the use of inputs used in valuation techniques into the following three levels:
Level 1—quoted prices in active markets for identical assets and liabilities.
Level 2— observable inputs other than quoted prices in active markets for identical assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Some of the Company’s marketable securities primarily utilize broker quotes in a non-active market for valuation of these securities.
Level 3—unobservable inputs.
All of the Company’s financial instruments are valued using quoted prices in active markets or based on other observable inputs.  For Level 2 securities, the Company uses a third-party pricing service which provides documentation on an ongoing basis that includes, among other things, pricing information with respect to reference data, methodology, inputs summarized by asset class, pricing application and corroborative information.  For Level 3 contingent consideration, the Company reassesses the fair value of expected contingent consideration and the corresponding liability each reporting period using the Monte Carlo Method, which is consistent with the initial measurement of the expected contingent consideration liability.  This fair value measurement is considered a Level 3 measurement because the Company estimates projections during the contingent consideration period of approximately 13.5 years, utilizing various potential pay-out scenarios.  Probabilities were applied to each potential scenario and the resulting values were discounted using a rate that considers weighted average cost of capital as well as a specific risk premium associated with the riskiness of the contingent consideration itself, the related projections, and the overall business.  The contingent consideration liabilities are classified as a component of Accrued liabilities and Other long-term liabilities in the Company’s Consolidated Balance Sheets. Changes to the contingent consideration liabilities are reflected in Selling, general, and administrative expense in our Consolidated Statements of Operations. Changes to the unobservable inputs could have a material impact on the Company’s financial statements.
The following tables set forth the fair value of the Company’s financial assets and liabilities that are re-measured on a regular basis:
(in millions)Level 1Level 2Level 3Total
December 31, 2021
Money market funds (a)$63.2 $— $— $63.2 
Corporate bonds and notes— 105.6 — 105.6 
Municipal bonds— 16.1 — 16.1 
Federal agency issues— 6.8 — 6.8 
US government securities— 11.9 — 11.9 
Contingent consideration— — (8.6)(8.6)
Total$63.2 $140.4 $(8.6)$195.0 
(a)Money market funds are primarily comprised of exchange traded funds and accrued interest.
(in millions)Level 1Level 2Level 3Total
December 31, 2020
Money market funds (a)$69.1 $— $— $69.1 
Corporate bonds and notes— 29.3 — 29.3 
Municipal bonds— 9.6 — 9.6 
Federal agency issues— 4.0 — 4.0 
US government securities— 11.8 — 11.8 
Contingent consideration— — (10.9)(10.9)
Total$69.1 $54.7 $(10.9)$112.9 
(a)Money market funds are primarily comprised of exchange traded funds and accrued interest.
The following table reconciles the change in the fair value of the contingent consideration during the periods presented:
(in millions)Year Ended December 31, 2021Transition Period Ended December 31, 2020Year Ended June 30, 2020Year Ended June 30, 2019
Carrying amount at beginning of period$10.9 $6.8 $13.8 $14.5 
Payment of contingent consideration(3.3)(0.1)(3.9)— 
Change in fair value recognized in the statement of operations1.8 3.5 (2.8)(1.1)
Translation adjustments recognized in other comprehensive income (loss)(0.8)0.7 (0.3)0.4 
Carrying amount at end of period$8.6 $10.9 $6.8 $13.8