Envista Holdings CorpNVST
Envista Holdings Corp Fair Value Disclosure
FAIR VALUE MEASUREMENTS
Accounting standards define fair value based on an exit price model, establish a framework for measuring fair value where the Company’s assets and liabilities are required to be carried at fair value and provide for certain disclosures related to the valuation methods used within a valuation hierarchy as established within the accounting standards. This hierarchy prioritizes the inputs into three broad levels as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 inputs are quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, or other observable characteristics for the asset or liability, including interest rates, yield curves and credit risks, or inputs that are derived principally from, or corroborated by, observable market data through correlation; and Level 3 inputs are unobservable inputs based on the Company’s assumptions. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
A summary of financial assets and liabilities that are measured at fair value on a recurring basis were as follows ($ in millions):
| Quoted Prices in Active Market (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | ||||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Investments in rabbi trust | $ | 9.2 | $ | 18.3 | $ | — | $ | 27.5 | |||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Cross-currency swap derivative contract | $ | — | $ | 10.2 | $ | — | $ | 10.2 | |||||||||||||||
| Deferred compensation plans | $ | — | $ | 27.6 | $ | — | $ | 27.6 | |||||||||||||||
December 31, 2024 | |||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Cross-currency swap derivative contract | $ | — | $ | 5.9 | $ | — | $ | 5.9 | |||||||||||||||
| Investments in rabbi trust | $ | 16.0 | $ | 8.2 | $ | — | $ | 24.2 | |||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Deferred compensation plans | $ | — | $ | 24.2 | $ | — | $ | 24.2 | |||||||||||||||
Derivative Instruments
The cross-currency swap is classified as Level 2 in the fair value hierarchy. The cross-currency swap is measured using the income approach with the relevant foreign currency current exchange rates and forward curves as inputs. Refer to Note 10 for additional information.
Deferred Compensation Plans
Deferred compensation obligations are classified as Level 2 inputs and are derived principally from, or corroborated by observable market data.
The deferred compensation obligations are funded through a Company established irrevocable rabbi trust, which holds investments that primarily consist of mutual funds and corporate owned life insurance policies. The mutual funds are valued based on quoted market prices and therefore are classified as Level 1. The corporate owned life insurance policies have cash surrender values (which approximate fair value), that derive their values from investments in mutual funds that are managed by an insurance company, are valued using a market approach and therefore are classified within Level 2. Refer to Note 2 for additional information.
Fair Value of Financial Instruments
The carrying amounts and fair values of the Company’s financial instruments for the years ended December 31 were as follows ($ in millions):
| 2025 | 2024 | ||||||||||||||||||||||
| Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Investments in rabbi trust | $ | 27.5 | $ | 27.5 | $ | 24.2 | $ | 24.2 | |||||||||||||||
| Cross-currency swap derivative contract | $ | — | $ | — | $ | 5.9 | $ | 5.9 | |||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Cross-currency swap derivative contract | $ | 10.2 | $ | 10.2 | $ | — | $ | — | |||||||||||||||
| Convertible senior notes due 2028 | $ | 492.5 | $ | 481.2 | $ | 489.7 | $ | 450.0 | |||||||||||||||
| Convertible senior notes due 2025 | $ | — | $ | — | $ | 116.0 | $ | 125.4 | |||||||||||||||
| Other debt | $ | 955.8 | $ | 955.8 | $ | 788.6 | $ | 788.6 | |||||||||||||||
The fair value of the convertible senior notes due 2028 and convertible senior notes due 2025 were determined based on the quoted bid price of the convertible senior notes in an over-the-counter market on December 31, 2025 and 2024, and therefore are considered as Level 2 of the fair value hierarchy. The fair value of long-term debt approximates the carrying value as these borrowings are based on variable market rates. The fair values of cash and cash equivalents, which consist primarily of money market funds, time and demand deposits, trade accounts receivables and trade accounts payable approximate their carrying amounts due to the short-term maturities of these instruments.
Refer to Note 12 for information related to the fair value of the Company sponsored defined benefit pension plan assets.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 12, 2026 | Showing above |
| 2024 | Feb 13, 2025 | |
| 2023 | Feb 15, 2024 | |
| 2022 | Feb 16, 2023 | |
| 2021 | Feb 24, 2022 | |
| 2020 | Feb 19, 2021 | |
| 2019 | Feb 21, 2020 | |
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.