Accounting for Derivative Instruments and Hedging Activities (Notes)

12 Months Ended

Dec. 31, 2023

Accounting for Derivative Instruments and Hedging Activities [Abstract]

Accounting for Derivative Instruments and Hedging Activities

Cross-currency derivative instruments are used to manage foreign exchange risk on the Sterling Notes by effectively converting £1.275 billion aggregate principal amount of fixed-rate British pound sterling denominated debt, including annual interest payments and the payment of principal at maturity, to fixed-rate U.S. dollar denominated debt. The cross-currency swaps have maturities of June 2031 and July 2042.

The Company’s derivative instruments are not designated as hedges and are marked to fair value each period, with the impact recorded as a gain or loss on financial instruments in the consolidated statements of operations in other income (expense), net. While these derivative instruments are not designated as hedges for accounting purposes, management continues to believe such instruments are closely correlated with the respective debt, thus managing associated risk. The fair value of the Company's cross-currency derivatives, which are classified within Level 2 of the valuation hierarchy, was $440 million and $570 million and is included in other long-term liabilities on its consolidated balance sheets as of December 31, 2023 and 2022, respectively.

The effect of financial instruments are recorded in other income (expense), net in the consolidated statements of operations and consisted of the following.


	Year Ended December 31,
	2023		2022		2021
Change in fair value of cross-currency derivative instruments	$	130	$	(280)	$	(106)
Foreign currency remeasurement of Sterling Notes to U.S. dollars	(85)		185		20
Gain (loss) on financial instruments, net	$	45	$	(95)	$	(86)