Fair value measurement

9 Months Ended

Sep. 29, 2024

Fair Value Disclosures [Abstract]

Fair value measurement

Fair value measurement

The following tables provide information regarding our financial assets and liabilities measured at fair value on a recurring basis as of September 29, 2024 and December 31, 2023:

	Total carrying  value at  September 29, 2024		Quoted prices in active markets (Level 1)		Significant other observable Inputs (Level 2)		Significant unobservable Inputs (Level 3)
Investments in marketable securities	$	571	$	571	$	—	$	—
Derivative assets	20,433		—		20,433		—
Derivative liabilities	62,007		—		62,007		—
Contingent consideration liabilities	46,750		—		—		46,750

	Total carrying value at December 31, 2023		Quoted prices in active markets (Level 1)		Significant other observable Inputs (Level 2)		Significant unobservable Inputs (Level 3)
Investments in marketable securities	$	5,306	$	5,306	$	—	$	—
Derivative assets	19,449		—		19,449		—
Derivative liabilities	35,303		—		35,303		—
Contingent consideration liabilities	39,486		—		—		39,486

Valuation Techniques

Our financial assets valued based upon Level 1 inputs are comprised of investments in marketable securities held in trust, which are available to satisfy benefit obligations under our benefit plans and other arrangements. The investment assets of the trust are valued using quoted market prices.

Our financial assets and liabilities valued based upon Level 2 inputs are comprised of foreign currency forward contracts and cross-currency interest rate swap agreements. We use foreign currency forward contracts and cross-currency interest rate swap agreements to manage foreign currency transaction exposure as well as exposure to foreign currency denominated monetary assets and liabilities. We measure the fair value of the foreign currency forwards and cross-currency swap agreements by calculating the amount required to enter into offsetting contracts with similar remaining maturities, based on quoted market prices, and taking into account the creditworthiness of the counterparties.

Our financial liabilities valued based upon Level 3 inputs are comprised of contingent consideration arrangements pertaining to our acquisitions.

Contingent consideration

Contingent consideration liabilities, which primarily consist of payment obligations that are contingent upon the achievement of revenue-based goals, but also can be based on other milestones such as regulatory approvals, are remeasured to fair value each reporting period using assumptions including revenue growth rates (based on internal operational budgets and long-range strategic plans), revenue volatility, discount rates, probability of payment and projected payment dates.

We determine the fair value of certain contingent consideration liabilities using a Monte Carlo simulation (which involves a simulation of future revenues during the earn-out period using management's best estimates) or discounted cash flow analysis. Increases in projected revenues, estimated cash flows and probabilities of payment may result in significantly higher fair value measurements; decreases in these items may have the opposite effect. Increases in the discount rates in periods prior to payment may result in significantly lower fair value measurements and decreases in the discount rates may have the opposite effect.

The table below provides additional information regarding the valuation technique and inputs used in determining the fair value of our significant contingent consideration liabilities.

Contingent Consideration Liability	Valuation Technique	Unobservable Input	Range (Weighted average)
Revenue-based
	Monte Carlo simulation	Revenue volatility	17.4% - 30.4% (19.2%)
		Risk free rate	Cost of debt structure
		Projected year of payment	2025 - 2026

The following table provides information regarding changes in our contingent consideration liabilities for the nine months ended September 29, 2024:

	Contingent consideration
Balance – December 31, 2023	$	39,486
Payments	(182)
Revaluations	7,446
Balance – September 29, 2024	$	46,750