6. FAIR VALUE
ASC 820 - Fair Value Measurement defines fair value as “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 definition is based on an exit price rather than an entry price, regardless of whether the entity plans to hold or sell the asset. This guidance also establishes a fair value hierarchy to prioritize inputs used in measuring fair value as follows:
•Level 1: Observable inputs such as quoted prices in active markets;
•Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and
•Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
FINANCIAL INSTRUMENTS The estimated carrying value of our financial assets and liabilities that are recognized at fair value on a recurring basis, using available market information and other observable data, are as follows:
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| | | Fair Value | | | |
| | | | December 31, 2025 | | | | December 31, 2024 | | Input | |
| | | (in millions) | | | |
| Balance Sheet Classification | | | | | | | | | | | |
| Cash equivalents | | | | $ | 183.1 | | | | | $ | 257.3 | | | Level 1 | |
| Prepaid expenses and other | | | | | | | | | | | |
| Cash flow hedges - currency forward contracts | | | | 9.0 | | | | | 1.2 | | | Level 2 | |
| Cash flow hedges - variable-to-fixed interest rate swap | | | | 0.1 | | | | | — | | | Level 2 | |
| Nondesignated - currency forward contracts | | | | 53.7 | | | | | — | | | Level 2 | |
| | | | | | | | | | | |
| Other assets and deferred charges | | | | | | | | | | | |
| Cash flow hedges - currency forward contracts | | | | 4.9 | | | | | — | | | Level 2 | |
| Fair value hedges - fixed-to-fixed cross-currency swap | | | | — | | | | | 0.9 | | | Level 2 | |
| | | | | | | | | | | |
| Cash flow hedges - variable-to-fixed interest rate swap | | | | 0.7 | | | | | — | | | Level 2 | |
| | | | | | | | | | | |
| Accrued expenses and other | | | | | | | | | | | |
| Cash flow hedges - currency forward contracts | | | | — | | | | | 14.9 | | | Level 2 | |
| | | | | | | | | | | |
| Cash flow hedges - variable-to-fixed interest rate swap | | | | — | | | | | 2.2 | | | Level 2 | |
| Nondesignated - currency forward contracts | | | | — | | | | | 1.6 | | | Level 2 | |
| Postretirement benefits and other long-term liabilities | | | | | | | | | | | |
| Cash flow hedges - currency forward contracts | | | | — | | | | | 7.3 | | | Level 2 | |
| Fair value hedges - fixed-to-fixed cross-currency swap | | | | 21.5 | | | | | — | | | Level 2 | |
| Cash flow hedges - variable-to-fixed interest rate swap | | | | — | | | | | 5.0 | | | Level 2 | |
| | | | | | | | | | | |
The carrying values of our cash, accounts receivable, accounts payable and accrued liabilities approximate their fair values due to the short-term maturities of these instruments.
We estimated the fair value of the amounts outstanding on our debt, using available market information and other observable data, to be as follows:
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| | December 31, 2025 | | December 31, 2024 | | |
| Carrying Amount | | Fair Value | | Carrying Amount | | Fair Value | | Input |
| (in millions) | | |
| | | | | | | | | |
| Revolving Credit Facility | $ | — | | | $ | — | | | $ | — | | | $ | — | | | Level 2 |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| Term Loan A Facility | 484.3 | | | 486.7 | | | 484.3 | | | 486.1 | | | Level 2 |
| Term Loan B Facility | 648.0 | | | 649.6 | | | 648.0 | | | 652.9 | | | Level 2 |
| 7.75% Notes due 2033 | 1,250.0 | | | 1,268.8 | | | — | | | — | | | Level 2 |
| 6.875% Notes due 2028 | 250.0 | | | 249.8 | | | 400.0 | | | 395.0 | | | Level 2 |
| | | | | | | | | |
| | | | | | | | | |
| 6.50% Notes due 2027 | — | | | — | | | 500.0 | | | 493.5 | | | Level 2 |
| 6.375% Notes due 2032 | 850.0 | | | 850.3 | | | — | | | — | | | Level 2 |
| | | | | | | | | |
| | | | | | | | | |
| 5.00% Notes due 2029 | 600.0 | | | 576.0 | | | 600.0 | | | 544.5 | | | Level 2 |
Investments in our defined benefit pension plans are stated at fair value. See Note 8 - Employee Benefit Plans for additional fair value disclosures of our pension plan assets.
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.