Fair Value Measurements

12 Months Ended

Dec. 31, 2022

Fair Value Hierarchy

Accounting guidance on fair value measurements and disclosures establishes a hierarchy that prioritizes the inputs used to measure fair value (generally, assumptions that market participants would use in pricing an asset or liability) based on the quality and reliability of the information provided by the inputs, as follows:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

Fair Values of Other Financial Instruments

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


		December 31, 2022				December 31, 2021
	Input	Carrying		Fair		Carrying		Fair
	Level	Amount		Value		Amount		Value
Financial Assets:
Cash equivalents	Level 1	$	153.9	$	153.9	$	17.1	$	17.1
Financial Liabilities:
Short-term borrowings	Level 2		74.0		74.0		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		0.0		0.0		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		397.3		424.7		450.1
2.3% Senior notes due December 15, 2031	Level 2		399.3		321.3		399.2		403.5
5.6% Senior notes due November 15, 2032	Level 2		499.1		518.9		0.0		0.0
3.95% Senior notes due August 1, 2047	Level 2		397.6		316.7		397.5		471.6
5.0% Senior notes due June 15, 2052	Level 2		499.7		464.7		0.0		0.0
Interest Rate Swap Lock Agreement liability	Level 2		0.0		0.0		41.6		41.6

The Company recognizes transfers between input levels as of the actual date of the event. There were no transfers between input levels during the twelve months ended December 31, 2022.

The following methods and assumptions were used to estimate the fair value of each class of financial instruments reflected in the Consolidated Balance Sheets:

Cash Equivalents: Cash equivalents consist of highly liquid short-term investments and term bank deposits, which mature within three months. The estimated fair value of the Company’s cash equivalents approximates their carrying value.

Short-Term Borrowings: The carrying amounts of the Company’s unsecured lines of credit and commercial paper issuances approximates fair value because of their short maturities and variable interest rates.

Senior Notes: The Company determines the fair value of its senior notes based on their quoted market value or broker quotes, when possible. In the absence of observable market quotes, the notes are valued using non-binding market consensus prices that the Company seeks to corroborate with observable market data.

Interest Rate Lock Agreements

From time to time the Company will enter into interest rate lock agreements to hedge the risk of changes in the interest payments attributable to changes in the interest rates associated with anticipated issuances of debt. See Note 3 - Derivative Instruments and Risk Management for further details.

Other: The carrying amounts of accounts receivable, and accounts payable and accrued expenses, approximated estimated fair values as of December 31, 2022 and 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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