Investments

12 Months Ended

Sep. 30, 2020

Investments, Debt and Equity Securities [Abstract]

Investments

Investments

Our investments consist of (in millions):

	September 30,
	2020			2019
Fixed income securities	$	0.6		$	43.9
Equity securities	875.3			721.5
Other	78.2			68.1
Total investments	954.1			833.5
Less short-term investments	(0.6		)	(39.6		)
Long-term investments	$	953.5		$	793.9

We record investments in fixed income and equity securities, classified as available-for-sale investments or trading investments, at fair value.

Available-for-sale Investments

We invest in certificates of deposit, time deposits, commercial paper and other fixed income securities which are classified as available-for-sale. Unrealized gains and losses on available-for-sale investments are included in our Consolidated Balance Sheet as a component of accumulated other comprehensive loss, net of any deferred taxes. Realized gains and losses are included in net income.

Our available-for-sale investments consist of (in millions):

	September 30,
	2020		2019
Certificates of deposit and time deposits	$	0.6	$	0.6
Corporate debt securities	—		31.8
Government securities	—		6.3
Asset-backed securities	—		5.2
Total	$	0.6	$	43.9

Pre-tax gross realized and unrealized gains and losses on available-for-sale investments were not material in 2020 and 2019.

Classification of our available-for-sale investments as current or noncurrent is based on the nature of the investment and when the investment is reasonably expected to be realized. These investments were included in the following line items within the Consolidated Balance Sheet (in millions):

	September 30,
	2020		2019
Other current assets	$	0.6	$	39.6
Long-term investments	—		4.3
Total	$	0.6	$	43.9

Equity Securities

On July 19, 2018, we purchased 10,582,010 shares of PTC Inc. (“PTC”) common stock (the “PTC Shares”) in a private placement at a purchase price of $94.50 per share for an aggregate purchase price of approximately $1.0 billion (the “Purchase”). The PTC Shares are considered equity securities. For a period of approximately 3 years after the Purchase we are subject to entity-specific transfer restrictions subject to certain exceptions. Since the first anniversary of the Purchase, the Company has had the ability to transfer, in the aggregate in any 90-day period, a number of the PTC Shares equal to up to 1.0% of PTC’s total outstanding shares of common stock as of the first day in such 90-day period, but no more than 2.0% of PTC’s total outstanding shares of common stock in each of the second year and the third year after the Purchase.

The PTC Shares are recorded at fair value. At September 30, 2020, the fair value of the PTC Shares was $875.3 million, which was recorded in long-term investments in the Consolidated Balance Sheet. We recorded a gain of $153.9 million and a loss of $368.5 million related to the PTC Shares in the Consolidated Statement of Operations in the years ended September 30, 2020 and 2019, respectively.

Fair Value of Investments

We recognize all available-for-sale and trading investments at fair value in the Consolidated Balance Sheet. The valuation methodologies used for our investments measured at fair value are described below.

Certificates of deposit and time deposits — These investments are recorded at cost, which approximates fair value.

Commercial paper — These investments are recorded at amortized cost, which approximates fair value.

Corporate debt securities — Valued at either the yields currently available on comparable securities of issuers with similar credit ratings or valued under a discounted cash flow approach that maximizes observable inputs, such as current yields of similar instruments, but includes adjustments for certain risks that may not be observable such as credit and liquidity risks.

Government securities — Valued at the most recent closing price on the active market on which the individual securities are traded or, absent an active market, utilizing observable inputs such as closing prices in less frequently traded markets.

Asset-backed securities — Valued using a discounted cash flow approach that maximizes observable inputs, such as current yields of benchmark instruments, but includes adjustments for certain risks that may not be observable such as credit and liquidity risks.

Equity securities — Prior to their registration in fiscal 2019, the PTC Shares were valued using the most recent closing price of PTC common stock quoted on Nasdaq, less a temporary discount for lack of marketability. The discount for lack of marketability was calculated using a put-option model which included observable and unobservable inputs and was categorized as Level 3 in the fair value hierarchy. As a result of the registration of the PTC Shares and reversal of the discount during fiscal 2019, these securities are now valued using the most recent closing price as quoted on Nasdaq and were transferred from Level 3 to Level 1.

Refer to Note 1 for further information regarding levels in the fair value hierarchy. We did not have any other transfers between levels of fair value measurements during the periods presented.

Fair values of our investments were (in millions):

	September 30, 2020
	Level 1		Level 2		Level 3		Total
Certificates of deposit and time deposits	$	—	$	0.6	$	—	$	0.6
Equity securities	875.3		—		—		875.3
Total	$	875.3	$	0.6	$	—	$	875.9

	September 30, 2019
	Level 1		Level 2		Level 3		Total
Certificates of deposit and time deposits	$	—	$	0.6	$	—	$	0.6
Corporate debt securities	—		31.8		—		31.8
Government securities	6.3		—		—		6.3
Asset-backed securities	—		5.2		—		5.2
Equity securities	721.5		—				721.5
Total	$	727.8	$	37.6	$	—	$	765.4