Company: ICUI
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0000883984-25-000016
Chunk: 52

Company: ICU MEDICAL INC/DE
Filing Date: 2025-05-08
Form: 10-Q
Item: Item 1
Chunk 52
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 FINANCIAL STATEMENTS(Continued)

As of March 31, 2025, we expect an estimated $0.8 million in deferred losses on the outstanding foreign exchange contracts and an estimated $8.4 million in deferred gains on the interest rate swaps will be reclassified from accumulated other comprehensive loss to net income during the next 12 months concurrent with the underlying hedged transactions also being reported in net income.    

Note 10:  Fair Value Measurements

     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. There are three levels of inputs that may be used to measure fair value:•Level 1:  quoted prices in active markets for identical assets or liabilities;•Level 2:  inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or•Level 3:  unobservable inputs that are supported by little or no market activity and that are significant to the fair values of the assets or liabilities.Contingent Earn-out LiabilitiesIn 2022, we acquired Smiths Medical with a combination of cash consideration and share consideration issued at closing. Total consideration for the acquisition included a potential earn-out payment of $100.0 million in cash contingent on our common stock achieving a certain volume-weighted average price (the "Price Targets") from the closing date to either the third or fourth anniversary of closing and provided Smiths beneficially owns at least 50.0% of the shares of common stock issued at closing at the time the Price Target is achieved. During the period ending March 31, 2024, the change in fair market value of the earn-out was $0.3 million and is included in income from operations in a separate line. During July 2024, Smiths sold 1.2 million common shares of ICU Medical, Inc. The sale of shares when combined with other sales in prior periods renders Smiths unable to achieve the contingent consideration based on certain price targets during the third and fourth anniversary of closing as Smiths no longer meets the required minimum beneficial ownership percentage. Accordingly, the valuation of the contingent earn-out liability as of December 31,