Fair Value Measurements

9 Months Ended

Sep. 30, 2022

The following table provides the carrying amounts and estimated fair values of the Company’s financial instruments at September 30, 2022 and December 31, 2021:


		September 30, 2022						December 31, 2021
	Input	Carrying			Fair			Carrying		Fair
	Level	Amount			Value			Amount		Value
Financial Assets:
Cash equivalents	Level 1	$	192.0		$	192.0		$	17.1	$	17.1
Financial Liabilities:
Short-term borrowings	Level 2		3.3			3.3			252.8		252.8
2.45% Senior notes due August 1, 2022	Level 2		0.0			0.0			300.0		302.9
2.875% Senior notes due October 1, 2022	Level 2		400.0			400.0			399.9		406.4
Term loan due December 22, 2024	Level 2		400.0			400.0			400.0		400.0
3.15% Senior notes due August 1, 2027	Level 2		424.8			387.7			424.7		450.1
2.3% Senior notes due December 15, 2031	Level 2		399.2			313.2			399.2		403.5
3.95% Senior notes due August 1, 2047	Level 2		397.6			313.5			397.5		471.6
5.00% Senior notes due June 15, 2052	Level 2		499.8			458.3		0.0		0.0
Interest Rate Lock Agreement (asset) liability	Level 2		(12.5	)		(12.5	)		41.6		41.6
Business Acquisition Liabilities	Level 3		34.0			34.0			34.0		34.0

The Company recognizes transfers between input levels as of the actual date of the event. There were no transfers between input levels during the nine months ended September 30, 2022.

Refer to Note 2 in the Form 10-K for a description of the methods and assumptions used to estimate the fair value of each class of financial instruments reflected in the condensed consolidated balance sheets.

The business acquisition liabilities represent the estimated fair value of additional future contingent consideration payable for acquisitions of businesses that included contingent consideration clauses. The fair value of business acquisition liabilities is evaluated on an ongoing basis and is based on management estimates and entity-specific assumptions which are considered Level 3 inputs. As of both September 30, 2022 and December 31, 2021, the Company had a business acquisition liability of $20.0 in connection with the Zicam Acquisition and a $14.0 business acquisition liability in connection with the TheraBreath Acquisition (both of which are defined in Note 10). Any amount that may be due for the Zicam business acquisition liability is payable five years from the closing date. Any amount that may be due for the TheraBreath business acquisition liability is payable in installments between two and four years from the closing.

The interest rate lock agreements outstanding as of December 31, 2021 were used to hedge the risk of changes in the interest payments associated with the 5.0% Senior Notes due June 15, 2052. These agreements were settled in the second quarter of 2022 for a loss of $4.2, which will be amortized into interest expense over ten years. The Company has entered into additional interest rate lock agreements in the third quarter of 2022 which are used to hedge the risk of changes in the interest payments associated with the anticipated issuance of debt in the fourth quarter of 2022.

The carrying amounts of Accounts Receivable, and Accounts Payable and Accrued Expenses, approximated estimated fair values as of September 30, 2022 and December 31, 2021.

- 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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