Fair Value Measurements

12 Months Ended

Dec. 30, 2022

NOTE 10: FAIR VALUE MEASUREMENTS

The following table summarizes the fair values of financial instruments at fair value on a recurring basis for the periods indicated and determined using the following inputs:


	Fair Values as of the end of 2022								Fair Values as of the end of 2021

	Quoted prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs				Quoted prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(In millions)	(Level I)		(Level II)		(Level III)		Total		(Level I)		(Level II)		(Level III)		Total
Assets





Deferred compensation plan (1)	$	31.5	$	—	$	—	$	31.5	$	44.7	$	—	$	—	$	44.7
Derivatives (2)	—		18.0		—		18.0		—		0.1		—		0.1
Contingent consideration (3)	—		—		3.1		3.1		—		—		—		—
Total assets measured at fair value	$	31.5	$	18.0	$	3.1	$	52.6	$	44.7	$	0.1	$	—	$	44.8
Liabilities
Deferred compensation plan (1)	$	31.5	$	—	$	—	$	31.5	$	44.7	$	—	$	—	$	44.7
Derivatives (2)	—		0.2		—		0.2		—		0.2		—		0.2
Contingent consideration (3)	—		—		—		—		—		—		12.8		12.8
Total liabilities measured at fair value	$	31.5	$	0.2	$	—	$	31.7	$	44.7	$	0.2	$	12.8	$	57.7

(1)Represents a self-directed, non-qualified deferred compensation plan for certain executives and other highly compensated employees included in Other non-current assets and Other non-current liabilities on our Consolidated Balance Sheets. The plan is invested in actively traded mutual funds and individual stocks valued using observable quoted prices in active markets.

(2)Represents forward currency exchange contracts and a Treasury Rate Lock contract that are included in Other current assets and Other current liabilities on our Consolidated Balance Sheets.

(3)Represents arrangements to receive payments from buyers of our divested companies or pay former owners of acquired companies that are included in Other current and non-current assets or Other current liabilities on our Consolidated Balance Sheets. The fair values are estimated using scenario-based methods based upon estimated future milestones.

Derivative assets include a Treasury Rate Lock contract and a foreign currency exchange contract, both related to the pending acquisition of Transporeon.

The Treasury Rate Lock contract is a cash flow hedge with gains or losses reported as a component of other comprehensive income and subsequently amortized to interest expense over the term of the associated debt. At the end of 2022, the notional amount of the interest rate-lock contract was $400.0 million, and the fair value of the contract was $7.2 million.

The foreign currency exchange contract is to economically hedge the euro-denominated purchase price of Transporeon. The gains or losses are recognized in other income (expense), net. The notional amount of the foreign currency exchange contract was $1,999.4 million, and the fair value of this contract was $10.4 million.

Additional Fair Value Information

The total estimated fair value of all outstanding financial instruments that are not recorded at fair value on a recurring basis (debt) was approximately $1.5 billion and $1.4 billion at the end of 2022 and 2021.

The fair value of the senior notes was determined based on observable market prices in less active markets and is categorized accordingly as Level II. The fair values do not indicate the amount we would currently have to pay to extinguish any of this debt.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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