v3.26.1
FAIR VALUE MEASUREMENTS
 6 Months Ended
Jun. 30, 2026
FAIR VALUE MEASUREMENTS  
FAIR VALUE MEASUREMENTS

(12) FAIR VALUE MEASUREMENTS

 

Fair value measurements used in the unaudited consolidated financial statements are based upon the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: 

 

   Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities. 

   Level 2 – Valuations based on 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 data for substantially the full term of the assets or liabilities.

   Level 3 – Unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the inputs that market participants would use in pricing.

The following table details financial assets and liabilities measured and recorded at fair value on a recurring basis:

 

 

 

 

 

June 30, 2026

(in millions)

 

Balance Sheet Classification

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency exchange contracts

 

Other current assets

 

$

—

 

$

31.6

 

$

—

 

$

31.6

Convertible notes receivable

 

Convertible notes receivable

 

 

—

 

 

—

 

 

88.9

 

 

88.9

Marketable securities

 

Other assets

 

 

29.8

 

 

—

 

 

—

 

 

29.8

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency exchange contracts

 

Other current liabilities

 

$

—

 

$

(27.6)

 

$

—

 

$

(27.6)

 

 

 

 

 

 

December 31, 2025

(in millions)

 

Balance Sheet Classification

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency exchange contracts

 

Other current assets

 

$

—

 

$

26.6

 

$

—

 

$

26.6

Convertible notes receivable

 

Convertible notes receivable

 

 

—

 

 

—

 

 

88.0

 

 

88.0

Marketable securities

 

Other assets

 

 

30.5

 

 

—

 

 

—

 

 

30.5

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency exchange contracts

 

Other current liabilities

 

$

—

 

$

(23.5)

 

$

—

 

$

(23.5)

Other Fair Value Disclosures

The carrying amounts of cash and cash equivalents, trade accounts receivable, trade accounts payable and short-term debt obligations approximate fair value due to their short maturities. The carrying value of the Company's revolving credit facility approximates fair value because the interest rate is based on the Secured Overnight Financing Rate ("SOFR"), which resets at various intervals of less than one year.

The Company's convertible notes receivable are accounted for as loans receivable at amortized cost in accordance with Accounting Standards Codification ("ASC") Topic 310, Receivables, and are evaluated for expected credit losses in accordance with ASC Topic 326, Financial Instruments—Credit Losses. The Company believes the carrying value of the convertible notes receivable approximates fair value due to the relatively short-term nature of the instruments and/or because the stated interest rates are consistent with current market rates for similar instruments.

The Company estimates the fair value of the convertible notes receivable using significant unobservable inputs, including assumptions regarding the borrowers' financial condition, expected future cash flows, discount rates and the value of the contractual conversion features. Accordingly, the estimated fair value of the convertible notes receivable is classified as a Level 3 measurement within the fair value hierarchy. As of June 30, 2026, the carrying amount and estimated fair value of the convertible notes receivable were both $88.9 million.

The Company estimates the fair value of the 2049 Convertible Notes and 2030 Convertible Notes using quoted prices in inactive markets for identical liabilities (Level 2). As of June 30, 2026, the fair values of the 2049 Convertible Notes and 2030 Convertible Notes were $30.8 million and $931.7 million, with carrying values of $33.2 million and $1,000.0 million respectively.