Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements

Fair Value Measurements
9 Months Ended
Jun. 30, 2020
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date.  The authoritative guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available.  Observable inputs are from sources independent of the Company.  Unobservable inputs reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability, developed based upon the best information available in the circumstances.  The categorization of financial assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.  The hierarchy is broken down into three levels:
Level 1: Inputs are quoted prices in active markets for identical assets or liabilities.
Level 2: Inputs 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, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly.
Level 3: Inputs are unobservable for the asset or liability.
Carrying Value at June 30, 2020
Fair Value at June 30, 2020
Using Inputs Considered as:
  Level 1 Level 2 Level 3
Cash and cash equivalents $ 263.1    $ 263.1    $ —    $ —   
Investments in rabbi trust 3.8    3.8    —    —   
Derivative instruments 2.7    —    2.7    —   
$500.0 term loan 481.3    —    481.3    —   
$400.0 senior unsecured notes 400.0    414.7    —    —   
$375.0 senior unsecured notes 374.5    384.5    —    —   
$225.0 term loan 216.6    —    216.6    —   
$150.0 senior unsecured notes 150.0    149.7    —    —   
$100.0 Series A Notes 100.0    —    101.1    —   
Derivative instruments 6.3    —    6.3    —   
Carrying Value at September 30, 2019
Fair Value at September 30, 2019
Using Inputs Considered as:
  Level 1 Level 2 Level 3
Cash and cash equivalents $ 399.0    $ 399.0    $ —    $ —   
Investments in rabbi trust 4.2    4.2    —    —   
Derivative instruments 2.5    —    2.5    —   
$375.0 senior unsecured notes 374.4    380.6    —    —   
$150.0 senior unsecured notes 149.9    152.8    —    —   
$100.0 Series A Notes 100.0    —    108.5    —   
Derivative instruments 2.6    —    2.6    —   

Valuation Techniques
Cash and cash equivalents and investments in rabbi trust are classified within Level 1 of the fair value hierarchy. Financial instruments classified as Level 1 are based on quoted market prices in active markets. The types of financial instruments the Company classifies within Level 1 include most bank deposits, money market securities, and publicly traded mutual funds. The Company does not adjust the quoted market price for such financial instruments.
The Company estimates the fair value of foreign currency derivatives using industry accepted models.  The significant Level 2 inputs used in the valuation of derivatives include spot rates, forward rates, and volatility.  These inputs were obtained from pricing services, broker quotes, and other sources.
The fair value of the amounts outstanding under the Term Loan Facilities approximate carrying value, as the Company believes their variable interest rate terms correspond to current market terms.
The fair values of the Series A Notes were estimated based on internally-developed models, using current market interest rate data for similar issues, as there is no active market for the Series A Notes.
The fair values of the $400.0, $375.0, and $150.0 senior unsecured notes were based on quoted prices in active markets.

Derivative instruments

The Company has hedging programs in place to manage its currency exposures. The objectives of the Company’s hedging programs are to mitigate exposures in gross margin and non-functional-currency-denominated assets and liabilities. Under these programs, the Company uses derivative financial instruments to manage the economic impact of fluctuations in currency exchange rates. These include foreign currency exchange forward contracts, which generally have terms up to 24 months. The aggregate notional value of derivatives was $238.2 and $128.9 at June 30, 2020 and September 30, 2019, respectively. The derivatives are recorded at fair value primarily in other current assets and other current liabilities in the Consolidated Balance Sheets.