FAIR VALUE
Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value of assets and liabilities, the following hierarchy is used in selecting inputs, with the highest priority given to Level 1, as these are the most transparent or reliable:

Level 1 assets include investments with quoted prices in active markets that the Company has the ability to liquidate as of the reporting date.
Level 2 assets include investments in U.S. government agency securities, corporate and municipal debt whose estimates are valued based on observable inputs, other than quoted prices.
Level 3 assets include investments with unobservable inputs, such as third-party valuations, due to little or no market activity.
Financial Instruments Recorded at Fair Value (in millions):
December 31, 2025December 31, 2024
 Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Assets:        
Cash and cash equivalents$1,957.2 $— $— $1,957.2 $671.4 $— $— $671.4 
Deferred compensation asset (a)0.5 — — 0.5 0.4 — — 0.4 
Liabilities:  
Deferred compensation obligation (a)
$0.5 $— $— $0.5 $0.4 $— $— $0.4 
 
(a)    The deferred compensation obligation represents the balance of deferred compensation plus net investment earnings. The deferred compensation plan is funded through a rabbi trust. Trust funds are invested in mutual funds for which unit prices are quoted in active markets and are classified within Level 1 of the valuation hierarchy.

There were no transfers between Level 1, 2 or 3 during the periods presented.

Other Financial Instruments

As of December 31, 2025, and 2024, the Consolidated Balance Sheets carrying amounts for Accounts Receivable, Accounts Payable and Accrued Liabilities (excluding the deferred compensation obligation described above), and Payables under Inventory Purchase Agreements approximate fair value because of their short-term nature.

The carrying value and estimated fair value of long-term debt are as follows (in millions):
December 31, 2025December 31, 2024
Carrying Value
Estimated Fair Value (a)
Carrying Value
Estimated Fair Value (a)
8.25% Notes$— (b)$— $89.6 (b)$73.6 
2.25% Convertible Notes
$391.2 
(c)
$1,080.4 $389.0 
(c)
$403.8 
0% Convertible Notes
$783.7 
(d)
$1,089.8 $— 
(d)
$— 
(a) Estimated fair value is based on bid/ask quotes as of or near the balance sheet date, which are considered Level 2 inputs.
(b)    The carrying value of the 8.25% Notes consisted of the principal balance of $0 and $74.3 million as of December 31, 2025 and December 31, 2024, respectively, and the sum of current and noncurrent interest payment obligations until maturity. Refer to Note 8, Debt.

Historical Timeline

Fiscal YearFiled
2025Feb 11, 2026Showing above
2024Feb 7, 2025
2023Feb 9, 2024
2022Feb 22, 2023
2021Mar 11, 2022
2020Mar 22, 2021
2019Mar 27, 2020
2018Apr 1, 2019
2017Mar 15, 2018
2016Mar 31, 2017
2015Mar 23, 2016

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.