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Fair Value Measurements
 3 Months Ended
Mar. 31, 2020
Fair Value Disclosures [Abstract]  
Fair Value Measurements

6)

Fair Value Measurements

In accordance with the provisions of fair value accounting, a fair value measurement assumes that the transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability and defines fair value based upon an exit price model.

The fair value measurement guidance establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The guidance describes three levels of inputs that may be used to measure fair value:

 

Level 1

Quoted prices in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

 

Level 2

Observable inputs other than Level 1 prices, such as quoted prices for similar assets or 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. Level 2 assets and liabilities include debt securities with quoted prices that are traded less frequently than exchange-traded instruments or securities or derivative contracts that are valued using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data.

 

Level 3

Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the Company categorizes such assets and liabilities based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

Assets and liabilities of the Company are measured at fair value on a recurring basis as of March 31, 2020 and are summarized as follows:

 

 

 

 

 

 

 

Fair Value Measurements at Reporting Date Using

 

Description

 

March 31, 2020

 

 

Quoted Prices in

Active Markets for

Identical Assets or

Liabilities

(Level 1)

 

 

Significant

Other

Observable

Inputs

(Level 2)

 

 

Significant

Unobservable

Inputs

(Level 3)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

16.9

 

 

$

16.9

 

 

$

—

 

 

$

—

 

Commercial paper

 

 

33.8

 

 

 

—

 

 

 

33.8

 

 

 

—

 

U.S. treasury obligations

 

 

1.2

 

 

 

—

 

 

 

1.2

 

 

 

—

 

U.S. agency obligations

 

 

58.4

 

 

 

—

 

 

 

58.4

 

 

 

—

 

Available-for-sale investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Time deposits and certificates of deposit

 

 

10.4

 

 

 

—

 

 

 

10.4

 

 

 

—

 

Bankers' acceptance drafts

 

 

2.4

 

 

 

—

 

 

 

2.4

 

 

 

—

 

Commercial paper

 

 

26.2

 

 

 

—

 

 

 

26.2

 

 

 

—

 

U.S. treasury obligations

 

 

10.0

 

 

 

—

 

 

 

10.0

 

 

 

—

 

U.S. agency obligations

 

 

12.4

 

 

 

—

 

 

 

12.4

 

 

 

—

 

Group insurance contracts

 

 

6.0

 

 

 

—

 

 

 

6.0

 

 

 

—

 

Derivatives – currency forward contracts

 

 

2.7

 

 

 

—

 

 

 

2.7

 

 

 

—

 

Funds in investments and other assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Israeli pension assets

 

 

16.3

 

 

 

—

 

 

 

16.3

 

 

 

—

 

Deferred compensation plan assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mutual funds and exchange traded funds

 

 

1.2

 

 

 

—

 

 

 

1.2

 

 

 

—

 

Money market securities

 

 

0.1

 

 

 

—

 

 

 

0.1

 

 

 

—

 

Total assets

 

$

198.0

 

 

$

16.9

 

 

$

181.1

 

 

$

—

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives – currency forward contracts

 

$

0.5

 

 

$

—

 

 

$

0.5

 

 

$

—

 

Derivatives – interest rate hedge - current

 

 

0.5

 

 

 

—

 

 

 

0.5

 

 

 

—

 

Derivatives – interest rate hedge - non-current

 

 

15.2

 

 

 

—

 

 

 

15.2

 

 

 

—

 

Total liabilities

 

$

16.2

 

 

$

—

 

 

$

16.2

 

 

$

—

 

Reported as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents(1)

 

$

110.3

 

 

$

16.9

 

 

$

93.4

 

 

$

—

 

Short-term investments

 

 

61.4

 

 

 

—

 

 

 

61.4

 

 

 

—

 

Other current assets

 

 

2.7

 

 

 

—

 

 

 

2.7

 

 

 

—

 

Total current assets

 

$

174.4

 

 

$

16.9

 

 

$

157.5

 

 

$

—

 

Long-term investments

 

$

6.0

 

 

$

—

 

 

$

6.0

 

 

$

—

 

Other assets

 

 

17.6

 

 

 

—

 

 

 

17.6

 

 

 

—

 

Total long-term assets

 

$

23.6

 

 

$

—

 

 

$

23.6

 

 

$

—

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other current liabilities

 

$

1.0

 

 

$

—

 

 

$

1.0

 

 

$

—

 

Other liabilities

 

$

15.2

 

 

$

—

 

 

$

15.2

 

 

$

—

 

 

 

(1)

The cash and cash equivalent amounts presented in the table above do not include cash of $331.7 as of March 31, 2020.

Assets and liabilities of the Company are measured at fair value on a recurring basis as of December 31, 2019 and are summarized as follows:

 

 

 

 

 

 

 

Fair Value Measurements at Reporting Date Using

 

Description

 

December 31, 2019

 

 

Quoted Prices in

Active Markets for

Identical Assets or

Liabilities

(Level 1)

 

 

Significant

Other

Observable

Inputs

(Level 2)

 

 

Significant

Unobservable

Inputs

(Level 3)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

0.6

 

 

$

0.6

 

 

$

—

 

 

$

—

 

Time deposits and certificates of deposit

 

 

2.2

 

 

 

—

 

 

 

2.2

 

 

 

—

 

Commercial paper

 

 

42.6

 

 

 

—

 

 

 

42.6

 

 

 

—

 

U.S. treasury obligations

 

 

2.7

 

 

 

—

 

 

 

2.7

 

 

 

—

 

U.S. agency obligations

 

 

17.1

 

 

 

—

 

 

 

17.1

 

 

 

—

 

Available-for-sale securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Time deposits and certificates of deposit

 

 

13.1

 

 

 

—

 

 

 

13.1

 

 

 

—

 

Bankers' acceptance drafts

 

 

4.0

 

 

 

—

 

 

 

4.0

 

 

 

—

 

Commercial paper

 

 

61.2

 

 

 

—

 

 

 

61.2

 

 

 

—

 

U.S. treasury obligations

 

 

5.0

 

 

 

—

 

 

 

5.0

 

 

 

—

 

U.S. agency obligations

 

 

26.1

 

 

 

—

 

 

 

26.1

 

 

 

—

 

Group insurance contracts

 

 

5.8

 

 

 

—

 

 

 

5.8

 

 

 

—

 

Derivatives – currency forward contracts

 

 

1.1

 

 

 

—

 

 

 

1.1

 

 

 

—

 

Derivatives –interest rate hedge - current

 

 

0.8

 

 

 

—

 

 

 

0.8

 

 

 

—

 

Funds in investments and other assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Israeli pension assets

 

 

16.7

 

 

 

—

 

 

 

16.7

 

 

 

—

 

Deferred compensation plan assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mutual funds and exchange traded funds

 

 

2.0

 

 

 

—

 

 

 

2.0

 

 

 

—

 

Money market funds

 

 

0.5

 

 

 

—

 

 

 

0.5

 

 

 

—

 

Total assets

 

$

201.5

 

 

$

0.6

 

 

$

200.9

 

 

$

—

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives – currency forward contracts

 

$

0.3

 

 

$

—

 

 

$

0.3

 

 

$

—

 

Derivatives – interest rate hedge - non-current

 

 

6.5

 

 

 

—

 

 

 

6.5

 

 

 

—

 

Total liabilities

 

$

6.8

 

 

$

—

 

 

$

6.8

 

 

$

—

 

Reported as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents(1)

 

$

65.2

 

 

$

0.6

 

 

$

64.6

 

 

$

—

 

Short-term investments

 

 

109.4

 

 

 

—

 

 

 

109.4

 

 

 

—

 

Other current assets

 

 

1.9

 

 

 

—

 

 

 

1.9

 

 

 

—

 

Total current assets

 

$

176.5

 

 

$

0.6

 

 

$

175.9

 

 

$

—

 

Long-term investments

 

$

5.8

 

 

$

—

 

 

$

5.8

 

 

$

—

 

Other assets

 

 

19.2

 

 

 

—

 

 

 

19.2

 

 

 

—

 

Total long-term assets

 

$

25.0

 

 

$

—

 

 

$

25.0

 

 

$

—

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other current liabilities

 

$

0.3

 

 

$

—

 

 

$

0.3

 

 

$

—

 

Other liabilities

 

$

6.5

 

 

$

—

 

 

$

6.5

 

 

$

—

 

 

 

(1)

The cash and cash equivalent amounts presented in the table above do not include cash of $349.4 as of December 31, 2019.

Money Market Funds

Money market funds are cash and cash equivalents and are classified within Level 1 of the fair value hierarchy.

Available-For-Sale Investments

As of March 31, 2020, available-for-sale investments consisted of time deposits and drafts denominated in the Euro currency, certificates of deposit, bankers’ acceptance drafts, commercial paper, U.S. treasury obligations, U.S. agency obligations and group insurance contracts.

The Company measures its debt and equity investments at fair value. The Company’s available-for-sale investments are classified within Level 2 of the fair value hierarchy.

Israeli Pension Assets

Israeli pension assets represent investments in mutual funds, government securities and other time deposits. These investments are set aside for the retirement benefit of the employees at the Company’s Israeli subsidiaries. These funds are classified within Level 2 of the fair value hierarchy.

Derivatives

As a result of the Company’s global operating activities, the Company is exposed to market risks from changes in foreign currency exchange rates and variable interest rates, which may adversely affect its operating results and financial position. When deemed appropriate, the Company minimizes its risks from foreign currency exchange rate and interest rate fluctuations through the use of derivative financial instruments. The principal market in which the Company executes its foreign currency exchange contracts and interest rate swaps is the institutional market in an over-the-counter environment with a relatively high level of price transparency. The market participants usually are large commercial banks. The forward foreign currency exchange contracts and interest rate hedge are valued using broker quotations, or market transactions and are classified within Level 2 of the fair value hierarchy.