Fair Value Measurements (Notes)

3 Months Ended

Jun. 30, 2020

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

Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. We estimate the fair value of financial assets and liabilities using available market information and generally accepted valuation methodologies. The inputs used to measure fair value are classified into three tiers. These tiers include Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring the entity to develop its own assumptions.

The following table shows the fair value of our financial assets and liabilities at June 30, 2020 and March 31, 2020:



					Fair Value Measurements
	Carrying Value				Quoted Prices in Active Markets for Identical Assets					Significant Other Observable Inputs					Significant Unobservable Inputs
					Level 1					Level 2					Level 3
	June 30,		March 31,		June 30,		March 31,			June 30,		March 31,			June 30,		March 31,
Assets:
Cash and cash equivalents	$	255,627	$	319,581	$	255,627	$	319,581		$	—	$	—		$	—	$	—
Forward and swap contracts ⁽¹⁾	451		124		—		—			451		124			—		—
Equity investments⁽²⁾	9,979		9,624		9,979		9,624		—	—		—		—	—		—
Other investments	2,550		2,507		2,550		2,507			—		—			—		—

Liabilities:
Forward and swap contracts ⁽¹⁾	$	777	$	912	$	—	$	—		$	777	$	912		$	—	$	—
Deferred compensation plans ⁽²⁾	1,630		1,475		1,630		1,475			—		—			—		—
Total debt ⁽³⁾	1,057,156		1,150,521		—		—			1,095,965		1,143,978			—		—
Contingent consideration obligations ⁽⁴⁾	15,976		15,988		—		—			—		—			15,976		15,988

⁽¹⁾ The fair values of forward and swap contracts are based on period-end forward rates and reflect the value of the amount that we would pay or receive for the contracts involving the same notional amounts and maturity dates.

⁽²⁾We maintain a frozen domestic non-qualified deferred compensation plan covering certain employees, which allows for the deferral of payment of previously earned compensation for an employee-specified term or until retirement or termination. Amounts deferred can be allocated to various hypothetical investment options (compensation deferrals have been frozen under the plan). We hold investments to satisfy the future obligations of the plan. Employees who made deferrals are entitled to receive distributions of their hypothetical account balances (amounts deferred, together with earnings (losses)). We also hold an investment in the common stock of Servizi Italia, S.p.A, a leading provider of integrated linen washing and outsourced sterile processing services to hospital Customers. Changes in the fair value of these investments are recorded in the "Interest income and miscellaneous expense line" of the Consolidated Statement of Income. During the first quarter of fiscal 2021 and 2020, we recorded a gains (losses) of $309 and $(1,758), respectively, related to these investments.

⁽³⁾We estimate the fair value of our debt using discounted cash flow analyses, based on our current incremental borrowing rates for similar types of borrowing arrangements.

⁽⁴⁾ Contingent consideration obligations arise from business acquisitions. The fair values are based on discounted cash flow analyses reflecting the possible achievement of specified performance measures or events and captures the contractual nature of the contingencies, commercial risk, and the time value of money. Contingent consideration obligations are classified in the consolidated balance sheets as accrued expense (short-term) and other liabilities (long-term), as appropriate based on the contractual payment dates.

The changes in Level 3 assets and liabilities measured at fair value on a recurring basis at June 30, 2020 are summarized as follows:



	Contingent Consideration
Balance at March 31, 2020	$	15,988
Additions	111
Payments	(21		)
Currency translation adjustments	(102		)
Balance at June 30, 2020	$	15,976