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Related party
 6 Months Ended
Jun. 30, 2025
Related Party Transactions [Abstract]  
Related party Related party
Pursuant to the Spin-off, Parent ceased to be a related party to the Company and accordingly, no related
party transactions or balances have been reported subsequent to the Separation and Distribution Date. In connection
with the Spin-off, the Company entered into a number of agreements with Parent to govern the Spin-off and provide
a framework for the relationship between the parties going forward, including, but not limited to the following:
•Separation and Distribution Agreement - sets forth the principal actions to be taken in connection with the
Spin-off, including the transfer of assets and assumption of liabilities, and establishes certain rights and
obligations between the Company and Parent following the Spin-off, including procedures with respect to
claims subject to indemnification and related matters.
•Transition Services Agreement - governs all matters relating to the provision of services between the
Company and Parent on a transitional basis. The services the Company receives primarily include support
for information technology-related functions. The transition services generally commenced on the date of
Spin-off and are expected to be completed over a period of one year, but no longer than two years after the
Spin-off.
•Tax Matters Agreement - governs the respective rights, responsibilities, and obligations between the
Company and Parent with respect to all tax matters, in addition to certain restrictions which generally
prohibit the Company from taking or failing to take any action for periods of varying length, from two
years to as long as five years, following the Spin-off that would prevent the Spin-off from qualifying as tax-
free for U.S. federal income tax purposes, including limitations on the Company’s ability to pursue certain
strategic transactions. The allocation of liabilities for payroll taxes and reporting and other employee tax
matters is covered by the Employee Matters Agreement and the allocation of liabilities for all other taxes is
covered by the Tax Matters Agreement.
The financial statement impact of these agreements was immaterial as of June 30, 2025 and for the three
and six months ended June 30, 2025.
The following discussion summarizes activity between the Company and Parent that occurred prior to the
completion of the Spin-off.
Related-party transactions
The Company and Parent have historically had intercompany activity, resulting in revenues and expenses
for both parties prior to the Spin-off. Transactions between the Company and other businesses of Parent were
considered related-party transactions. Revenues for products and services provided to Parent by the Company were
$8 million and $24 million for the three months ended June 30, 2025 and 2024, respectively, and $33 million and
$46 million for the six months ended June 30, 2025 and 2024, respectively. The costs incurred by the Company
related to products and services purchased from Parent were $38 million and $68 million for the three months ended
June 30, 2025 and 2024, respectively, and $69 million and $113 million for the six months ended June 30, 2025 and
2024, respectively, and are contained within Cost of revenues on the unaudited condensed consolidated statements
of operations. The Company also generated revenues from its equity method investees of $4 million for each of the
three months ended June 30, 2025 and 2024, and $6 million for each of the six months ended June 30, 2025 and
2024.
Certain related-party transactions between the Company and Parent have been included in these unaudited
condensed consolidated financial statements prior to the Spin-off. Trade receivables and payables, as well as non-
trade receivables and payables, between the Company and Parent are cash settled and are presented within Accounts
receivable and Accounts payable on the condensed consolidated balance sheets. These amounts were previously
presented as Due from related-party and Due to related-party, respectively. The net effect of the settlement of these
intercompany transactions is reflected within Cash flows from operating activities on the unaudited condensed
consolidated statements of cash flows. As of December 31, 2024, trade receivables from Parent were $21 million,
non-trade receivables from Parent were $37 million, trade payables due to Parent were $8 million and non-trade
payables due to Parent were $3 million.
Allocation of corporate expenses
The unaudited condensed consolidated statements of operations include expense allocations for certain
corporate, infrastructure and other shared services that were provided by Parent on a centralized basis, including but
not limited to accounting and financial reporting, treasury, tax, legal, human resources, information technology,
insurance, employee benefits and other shared services that are either specifically identifiable or directly attributable
to the Company, prior to the Spin-off. These expenses had been allocated to the Company on the basis of direct
usage when specifically identifiable, with the remainder predominantly allocated on a pro rata basis using revenues.
The Company’s management considers this allocation to be a reasonable reflection of the utilization of services
provided or the benefit received by the Company during the periods presented prior to the Spin-off. However, these
expense allocations may not be indicative of the actual expenses that would have been incurred had the Company
been a standalone company during the periods presented, and they may not reflect what the Company’s results of
operations may be in the future.
All such amounts have been deemed to have been incurred and settled by the Company in the period in
which the costs were recorded and are included within Net parent investment on the condensed consolidated balance
sheet prior to the Spin-off.
Allocations for management costs and corporate support services provided to the Company prior to the
Spin-off were as follows:
For the three months ended
June 30,
For the six months ended
June 30,
(In millions)
2025
2024
2025
2024
Cost of revenues
$8
$5
$16
$15
Selling, general and administrative expenses
25
26
44
44
Total
$33
$31
$60
$59
Cash management and financing
Prior to the Spin-off, a majority of the Company’s subsidiaries participated in Parent’s centralized cash
management and financing function. While the Company maintained bank accounts in the name of its respective
legal entities in order to conduct day-to-day business, cash was managed centrally as part of the overall treasury
function and Parent oversaw a cash pooling program whereby cash was swept from any subsidiary accounts,
including the Company’s accounts, on a daily basis. This mechanism optimized cash management and was used to
ensure all of Parent’s businesses had the working capital needed to run their day-to-day activities.
Depending on the Company’s contributions and withdrawals to and from the cash pool, it was either in a
net lending or borrowing position. No maturity dates nor payment schedules were outlined in the agreements
governing the cash pooling program and there was no periodic cash settlement as part of the cash pooling program.
As of December 31, 2024, the Company had outstanding receivables related to amounts provided to Parent’s
centralized cash management and financing function of $532 million, which is included in Related-party notes
receivable on the condensed consolidated balance sheet. The balance was settled prior to the Spin-off. The Company
paid interest expense of less than $1 million for the three and six months ended June 30, 2025, and $1 million for the
three and six months ended June 30, 2024, on borrowings from Parent’s centralized cash management and financing
function. The Company received interest income of $7 million and $2 million for the three months ended June 30,
2025 and 2024, respectively, and $12 million and $5 million for the six months ended June 30, 2025 and 2024,
respectively, on amounts contributed to the cash pooling program.
Related-party notes payable
The Company had short-term and long-term borrowing arrangements with Parent prior to the Spin-off.
These borrowings have been included in both current and noncurrent liabilities within Related-party notes payable
on the condensed consolidated balance sheet.
The borrowing arrangements with Parent were primarily for working capital needs and for financing certain
acquisitions and had an aggregate principal balance of $7,645 million and $7,647 million as of June 22, 2025 and
December 31, 2024, respectively. Prior to the Spin-off, the Company settled $5,646 million of related-party notes
payable, with the remaining $1,999 million contributed by Parent to the Company as equity. The Company
recognized interest expense from related-party notes payable of $75 million and $113 million for the three months
ended June 30, 2025 and 2024, and $183 million and $227 million for the six months ended June 30, 2025 and 2024,
respectively. As of December 31, 2024, interest payable to Parent was $78 million related to related-party notes
payable.
Net parent investment
As a result of the Spin-off, Net parent investment in the condensed consolidated balance sheets was fully
settled on the Separation and Distribution Date. As such, there was no balance in Net parent investment at June 30,
2025.
Prior to the Spin-off, Net parent investment in the condensed consolidated balance sheets and unaudited
condensed consolidated statements of equity represented Parent’s historical investment in the Company, the net
effect of transactions with Parent and allocations from Parent, and the Company’s accumulated earnings. Net
transfers to Parent are included within Net parent investment. During the three months ended June 30, 2025, certain
Spin-off-related adjustments were recorded to reflect transfers from Parent and settlement of Spin-off transactions
with Parent, which resulted in a net increase to total equity of $2,027 million. These items substantially consisted of
the completion of the bond exchange as described in Note 10 (Debt) and the settlement of intercompany debt as
described above. The components of Net transfers to Parent on the unaudited condensed consolidated statements of
cash flows and the reconciliation to the corresponding amounts presented within the unaudited condensed
consolidated statements of equity, which includes certain non-cash elements, were as follows:
For the six months ended June 30,
(In millions)
2025
2024
Net transfers to Parent as reflected on the unaudited condensed
consolidated statements of cash flows (1)
$(91)
$(204)
Equity contribution from Parent related to the settlement of Related-party
notes payable
1,999
—
Other non-cash activities with Parent, net(2)
25
26
Net transfers (to) from Parent as reflected on the unaudited
condensed consolidated statements of equity
$1,933
$(178)
__________________
(1)Net transfers to Parent as reflected on the unaudited condensed consolidated statements of cash flows includes general financing activities
and allocation of Parent’s corporate expenses.
(2)Other non-cash activities with Parent, net primarily consist of the net contribution from Parent from the completion of the bond exchange as
described in Note 10 (Debt) for the six months ended June 30, 2025 and income taxes paid by Parent for the six months ended June 30,
2024