Fair Value Measurements

3 Months Ended

Dec. 25, 2021

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 an interest rate swap and forward foreign currency contracts, which are valued using analyses obtained from independent third party valuation specialists based on market observable inputs, representing Level 2 measurements. 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 25, 2021:


			Fair Value at Reporting Date Using
	Balance as of December 25, 2021		Quoted Prices in Active Market for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:



Forward foreign currency contracts	$	9.8	$	—	$	9.8	$	—
Total	$	9.8	$	—	$	9.8	$	—
Liabilities:
Contingent consideration	$	71.0	$	—	$	—	$	71.0
Interest rate swap	8.2		—		8.2		—
Forward foreign currency contracts	1.4		—		1.4		—
Total	$	80.6	$	—	$	9.6	$	71.0

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 25, 2021 and December 26, 2020 were as follows:


		Three Month Ended
		December 25, 2021		December 26, 2020
Balance at beginning of period		$	75.1	$	81.8
	Contingent consideration recorded at acquisition	—		—
	Fair value adjustments	(4.1)		4.6
	Payments	—		—
Balance at end of period		$	71.0	$	86.4

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, goodwill and right of use assets. There were no such remeasurements in the three months ended December 25, 2021 and December 26, 2020.

Disclosure of Fair Value of Financial Instruments

The Company’s financial instruments mainly consist of cash and cash equivalents, accounts receivable, equity investments, an interest rate swap, forward foreign currency 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 swap and forward foreign currency 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 equity investments approximate fair value.

Amounts outstanding under the Company’s 2021 Credit Agreement (as defined below) of $1.5 billion aggregate principal and the Asset Securitization of $248.5 million as of December 25, 2021 are subject to variable interest rates based on current market rates, and as such, the Company believes the carrying amount of these obligations approximates fair value, representing Level 1 Measurements. The Company’s 2028 Senior Notes and 2029 Senior Notes had fair values of $420.3 million and $953.7 million, respectively, as of December 25, 2021 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.