TELEFLEX INCTFX
TELEFLEX INC Fair Value Disclosure
Fair value measurement
(1) As of December 31, 2025, the liability consisted largely of the estimated contingent consideration associated with the Palette acquisition, with payment anticipated in 2026.
Fair value is the price that would be received from the sale of an asset or paid to transfer a liability, using assumptions that market participants would use in pricing an asset or liability. Under GAAP, there is a three-level hierarchy of the inputs (i.e., assumptions that market participants would use in pricing an asset or liability) used to measure fair value. The categorization within the valuation hierarchy is based on the lowest level of input that is significant to the entire fair value measurement.
The levels of inputs within the hierarchy used to measure fair value are as follows:
Level 1 — inputs to the fair value measurement that are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 — inputs to the fair value measurement that include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3 — inputs to the fair value measurement that are unobservable inputs for the asset or liability.
The following tables provide information regarding our financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2025 and 2024:
| Basis of fair value measurement | |||||||||||||||||||||||
| December 31, 2025 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||||
| Investments in marketable securities | $ | 32,830 | $ | 32,830 | $ | — | $ | — | |||||||||||||||
| Derivative assets | 31,879 | — | 31,879 | — | |||||||||||||||||||
| 134,254 | — | 134,254 | — | ||||||||||||||||||||
| Contingent consideration liabilities | 50,218 | — | — | 50,218 | |||||||||||||||||||
| Basis of fair value measurement | |||||||||||||||||||||||
| December 31, 2024 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||||
| Investments in marketable securities | $ | 39,559 | $ | 39,559 | $ | — | $ | — | |||||||||||||||
| Derivative assets | 27,415 | — | 27,415 | — | |||||||||||||||||||
| Derivative liabilities | 13,584 | — | 13,584 | — | |||||||||||||||||||
| Contingent consideration liabilities | 49,277 | — | — | 49,277 | |||||||||||||||||||
There were no transfers of financial assets or liabilities into or out of Level 3 within the fair value hierarchy during the years ended December 31, 2025 or 2024.
Valuation Techniques
Our financial assets valued based upon Level 1 inputs are comprised of investments in marketable securities, including money market funds. The investment assets 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 forward 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. Our primary non-recurring fair value estimates, which utilize Level 3 inputs, typically include the following: business acquisitions (Note 4) and goodwill impairment testing and asset impairments (Note 5, Note 6 and Note 9).
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. As of December 31, 2025, the maximum amount we could be required to pay under the contingent consideration arrangements related to the 2023 Palette Life Sciences Inc. acquisition ("Palette"), which assets are included within the Strategic Divestitures, was $50.0 million.
The following table provides information regarding changes in our contingent consideration liabilities for the years ended December 31, 2025 and 2024:
| Contingent consideration | |||||||||||
| 2025 | 2024 | ||||||||||
| Beginning balance – January 1 | $ | 49,277 | $ | 39,486 | |||||||
| Payments | (15,505) | (236) | |||||||||
| 16,446 | 10,027 | ||||||||||
Ending balance – December 31 (1) | $ | 50,218 | $ | 49,277 | |||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Feb 23, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Feb 25, 2021 | |
| 2019 | Feb 21, 2020 | |
| 2018 | Feb 21, 2019 | |
| 2017 | Feb 22, 2018 | |
| 2016 | Feb 23, 2017 | |
| 2015 | Feb 25, 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.