Fair Value Measurement of Assets and Liabilities

9 Months Ended

Sep. 30, 2025

Fair Value Disclosures [Abstract]

Fair Value Measurement of Assets and Liabilities

10. Fair Value Measurement of Assets and Liabilities

The following financial assets and liabilities are recorded at fair value on a recurring basis (in millions):

	As of September 30, 2025
			Fair Value Measurements at Reporting Date Using:
Description	Recorded Balance		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Derivatives designated as hedges, current and long-term
Foreign currency forward contracts	$	18.1	$	-	$	18.1	$	-
Cross-currency interest rate swaps		28.6		-		28.6		-
Total Assets	$	46.7	$	-	$	46.7	$	-
Liabilities
Derivatives designated as hedges, current and long-term
Foreign currency forward contracts	$	10.1	$	-	$	10.1	$	-
Cross-currency interest rate swaps		9.4		-		9.4		-
Interest rate swaps		115.0		-		115.0		-
Contingent payments related to acquisitions		102.2		-		-		102.2
Total Liabilities	$	236.7	$	-	$	134.5	$	102.2

	As of December 31, 2024
			Fair Value Measurements at Reporting Date Using:
Description	Recorded Balance		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Derivatives designated as hedges, current and long-term
Foreign currency forward contracts	$	89.5	$	-	$	89.5	$	-
Cross-currency interest rate swaps		50.3		-		50.3		-
Derivatives not designated as hedges, current and long-term
Foreign currency forward contracts		1.8		-		1.8		-
Total Assets	$	141.6	$	-	$	141.6	$	-
Liabilities
Derivatives designated as hedges, current and long-term
Foreign currency forward contracts	$	1.8	$	-	$	1.8	$	-
Cross-currency interest rate swaps		14.2		-		14.2		-
Interest rate swaps		158.6		-		158.6		-
Derivatives not designated as hedges, current and long-term
Foreign currency forward contracts		0.8		-		0.8		-
Contingent payments related to acquisitions		180.7		-		-		180.7
Total Liabilities	$	356.1	$	-	$	175.4	$	180.7

We value our foreign currency forward contracts using a market approach based on foreign currency exchange rates obtained from active markets, and we perform ongoing assessments of counterparty credit risk.

We value our interest rate swaps using a market approach based on publicly available market yield curves and the terms of our swaps, and we perform ongoing assessments of counterparty credit risk. The valuation of our cross-currency interest rate swaps also includes consideration of foreign currency exchange rates.

Contingent payments related to acquisitions consist of sales-based payments and regulatory milestones, and are valued using discounted cash flow techniques. The fair value of sales-based payments is based upon significant unobservable inputs such as probability-weighted future revenue estimates and simulating the numerous potential outcomes, and changes as revenue estimates increase or decrease. The fair value of the regulatory milestones is based on the probability of success in obtaining the specified regulatory approval. The fair value of sales-based payments and regulatory milestones utilize significant unobservable inputs, which could reasonably change in future periods resulting in significantly higher or lower fair value measurements. If our estimates of future revenue or probability of achievement increase, the fair value measurements for these contingent payments will increase. Vice versa, if our estimates of future revenue or probability of achievement decrease, the fair value measurements for these contingent payments will decline. For each of our acquisitions that include contingent consideration, there is a maximum payout. Accordingly, the range of our potential contingent consideration payments are $0 to $285 million.

Contingent payments related to our acquisition of Embody, Inc. ("Embody") are to be settled by issuance of our common stock and cash payments. During the nine-month period ended September 30, 2025, we issued 0.3 million shares of our common stock valued at $27.8 million and paid $4.4 million of cash for a commercial milestone related to the Embody acquisition. The fair value of common stock was determined to be $101.02 per share, which represented the average of our high and low stock prices on the settlement date.

See Note 7 for a description of the contingent consideration related to the Paragon 28 acquisition.

The following table provides a reconciliation of the beginning and ending balances of items measured at fair value on a recurring basis in the tables above that used significant unobservable inputs (Level 3) (in millions):

	Level 3 - Liabilities
Contingent payments related to acquisitions
Beginning balance December 31, 2024	$	180.7
New contingent consideration related to Paragon 28 acquisition		35.0
Change in estimates		(62.8	)
Settlements		(52.8	)
Foreign currency impact		2.1
Ending balance September 30, 2025	$	102.2

Changes in estimates for contingent payments related to acquisitions are recognized in the "Acquisition, integration, divestiture and related" line item on our condensed consolidated statements of earnings.