Fair Value Measurements

3 Months Ended

Dec. 26, 2020

Fair Value Measurement and Measurement Inputs, Recurring and Nonrecurring [Text Block]

Fair Value Measurements

Assets/Liabilities Measured and Recorded at Fair Value on a Recurring Basis

The Company has investments in derivative instruments comprised of interest rate caps, an interest rate swap, forward foreign currency contracts and foreign currency option contracts, which are valued using analyses obtained from independent third party valuation specialists based on market observable inputs, representing Level 2 assets. The fair values of these

derivative contracts represent the estimated amounts the Company would receive or pay to terminate the contracts. Refer to Note 9 for further discussion and information on derivative instruments.

Assets and liabilities measured and recorded at fair value on a recurring basis consisted of the following at December 26, 2020:


			Fair Value at Reporting Date Using
	Balance as of December 26, 2020		Quoted Prices in Active Market for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:


Foreign currency option contracts	$	0.8	$	—	$	0.8	$	—

Total	$	0.8	$	—	$	0.8	$	—
Liabilities:
Contingent consideration	$	86.4	$	—	$	—	$	86.4
Interest rate swap	30.7		—		30.7		—
Forward foreign currency contracts	6.0		—		6.0		—
Total	$	123.1	$	—	$	36.7	$	86.4

Liabilities Measured and Recorded at Fair Value on a Recurring Basis

Changes in the fair value of recurring fair value measurements using significant unobservable inputs (Level 3), which solely consisted of contingent consideration liabilities, during the three month periods ended December 26, 2020 and December 28, 2019 were as follows:


		Three Month Ended
		December 26, 2020		December 28, 2019
Balance at beginning of period		$	81.8	$	9.1
	Contingent consideration recorded at acquisition	—		—
	Fair value adjustments	4.6		0.9
	Payments/Accruals	—		—
Balance at end of period		$	86.4	$	10.0

Assets Measured and Recorded at Fair Value on a Nonrecurring Basis

The Company remeasures the fair value of certain assets and liabilities upon the occurrence of certain events. Such assets are comprised of equity investments and long-lived assets, including property, plant and equipment, intangible assets and goodwill. There were no such remeasurements to equity investments in the three months ended December 26, 2020 and December 28, 2019. During the first quarter of fiscal 2020, the Company's Medical Aesthetics division met the criteria to be classified as assets-held-for sale, and the Company recorded a $30.2 million loss to record the asset group at its fair value less costs to sell. This is a level 1 measurement. See Note 7 for additional information.

Disclosure of Fair Value of Financial Instruments

The Company’s financial instruments mainly consist of cash and cash equivalents, accounts receivable, cost-method equity investments, interest rate caps, an interest rate swap, forward foreign currency contracts, foreign currency option contracts, insurance contracts, accounts payable and debt obligations. The carrying amounts of the Company’s cash and cash equivalents, accounts receivable and accounts payable approximate their fair value due to the short-term nature of these instruments. The Company’s interest rate caps, interest rate swap, forward foreign currency contracts and foreign currency option contracts are recorded at fair value. The carrying amount of the insurance contracts are recorded at the cash surrender value, as required by GAAP, which approximates fair value. The Company believes the carrying amounts of its cost-method equity investments approximate fair value.

Amounts outstanding under the Company’s 2018 Credit Agreement (as defined below) of $1.4 billion aggregate principal as of December 26, 2020 are subject to variable interest rates of interest based on current market rates, and as such, the Company believes the carrying amount of these obligations approximates fair value. The Company’s 2028 Senior Notes and 2029 Senior Notes had fair values of $427.0 million and $974.0 million, respectively, as of December 26, 2020 based on their trading prices, representing Level 1 measurements. Refer to Note 8 for the carrying amounts of the various components of the Company’s debt.