XML 45 R20.htm IDEA: XBRL DOCUMENT
v3.22.2

Fair Value Measurements | 6 Months Ended
--- | ---
Jun. 30, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Fair Value Measurements | The fair value of our financial assets and liabilities is determined by reference to market data and other valuation techniques as appropriate. We believe the fair value of our financial instruments, which are principally cash and cash equivalents, restricted cash, receivables, other current assets, accounts payable and accrued liabilities, approximates their recorded values. Our assets and liabilities measured at fair value on a recurring basis are described below. Derivative Financial Instruments As of and for the six months ended June 30, 2022, we held the following derivative instruments that were accounted for pursuant to ASC 815: Interest Rate Swap Contracts We used interest rate swap contracts as described below to mitigate gains or losses associated with the change in expected cash flows due to fluctuations in interest rates on our variable rate debt. In February 2018, we entered into interest rate swap contracts to hedge a portion of our interest expense associated with our variable rate debt to effectively fix the interest rate that we pay. These interest rate swap contracts were designated as cash flow hedges under ASC 815. We paid interest at a weighted-average fixed rate of 2.4418% and received interest at a variable rate equal to one-month LIBOR. The total notional amount of interest rate swaps was $800 million. These hedges matured in February 2022. In April 2022, we entered into new interest rate swap contracts to hedge a portion of our interest expense associated with our variable rate debt to effectively fix the interest rate that we pay. These interest rate swap contracts were designated as cash flow hedges under ASC 815. We pay interest at a weighted-average fixed rate of 2.8320% and receive interest at a variable rate equal to one-month CME Term SOFR. The total notional amount of interest rate swaps was $700 million as of June 30, 2022. These hedges mature in April 2027. All gains and losses from these hedges were recorded in Other comprehensive income (loss) until the future underlying payment transactions occur. Any realized gains or losses resulting from the hedges were recognized (together with the hedged transaction) as Interest expense. We estimated the fair value of our interest rate swap contracts by discounting the future cash flows of both the fixed rate and variable rate interest payments based on market yield curves. The inputs used to measure the fair value of our interest rate swap contracts were categorized as Level 2 in the fair value hierarchy as established by ASC 820. The following table shows the Gain (loss) and Interest expense recognized on our interest rate swap contracts:
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
Gain recorded in accumulated other comprehensive loss, net of tax | $ | 2 |  |  | $ | 4 |  |  | $ | 5 |  |  | $ | 9 |
Interest expense recorded related to interest rate swap contracts | 3 |  |  | 4 |  |  | 6 |  |  | 9 |
We do not expect to reclassify material amounts from Accumulated other comprehensive loss to interest expense in the next twelve months. The following table shows the effect of interest rate swap contracts designated as cash flow hedges in the consolidated statements of operations:
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
| Interest expense |  | Interest expense
Total interest expense which reflects the effects of cash flow hedges | $ | (70) |  |  | $ | (119) |  |  | $ | (186) |  |  | $ | (240) |
Hedged item | (4) |  |  | (4) |  |  | (7) |  |  | (9) |
Derivative designated as hedging instrument | 1 |  |  | — |  |  | 1 |  |  | — |
Cross-Currency Interest Rate Swaps We entered into certain cross-currency interest rate swap agreements to achieve more beneficial interest rates by effectively converting $460 million of our fixed-rate U.S. Dollar-denominated 2025 Secured Notes, including the semi-annual interest payments through October 2023, to fixed-rate Euro-denominated debt, with a fixed annual weighted average interest rate of approximately 2.946%. We designated these cross-currency interest rate swap agreements as a net investment hedge of our investments in certain of our international subsidiaries that use the Euro as their functional currency in order to reduce the volatility in our operating results caused by the changes in foreign currency exchange rates of the Euro relative to the U.S. Dollar. We used the spot method to measure the effectiveness of our net investment hedge. Under this method, for each reporting period, the change in the fair value of the $460 million cross-currency interest rate swaps was reported in Foreign currency translation gain (loss) in Accumulated other comprehensive loss. The cross-currency basis spread (along with other components of the cross-currency swap’s fair value excluded from the spot method effectiveness assessment) were amortized and recorded to Interest expense. We evaluated the effectiveness of our net investment hedge at the beginning of each quarter. In April 2022 and as a result of the April 2022 Refinancing, we settled our cross-currency interest rate swaps and received approximately $50 million in cash proceeds. The following table shows the fair value of our hedges:
|  |  | As of
| Balance Sheet Line Item |  | June 30, 2022 |  | December 31, 2021
Interest rate swaps(1)(2) | Other liabilities |  | $ | — |  |  | $ | 3 |
Interest rate swaps(1)(3) | Other assets |  | 1 |  |  | — |
Cross-currency interest rate swaps(1)(4) | Other assets |  | — |  |  | 42 |
(1) The inputs used to measure the fair value of our interest rate swap contracts were categorized as Level 2 in the fair value hierarchy.
(2) Contracts matured in February 2022.
(3) Contracts mature in April 2027.
(4) Gains of $— million and $4 million for the three and six months ended June 30, 2022, respectively, and loss of $8 million and gain of $13 million for the three and six months ended June 30, 2021, respectively, are reflected in Foreign currency translation gain (loss) in Other comprehensive income (loss).
Net Investment Non-derivative Hedge — 2026 Secured Euro Notes As a result of the April 2022 Refinancing described above, we redeemed all of 2026 Secured Euro Notes and no longer have a designated net investment hedge. Contingent Acquisition Consideration Liabilities In connection with our acquisitions, we have recorded certain contingent consideration liabilities (including redeemable non-controlling interest), of which the values are primarily based on reaching certain earnings-based metrics. The related liabilities were recorded at fair value on their respective acquisition dates as a part of the consideration transferred and are remeasured each reporting period (other than for redeemable non-controlling interest, which is measured based on its redemption value). The inputs used to measure the fair value of our liabilities are categorized as Level 3 in the fair value hierarchy. The table below reconciles the change in the contingent acquisition consideration liabilities (including deferred purchase price) for the period from December 31, 2021 to June 30, 2022.
| Total |  | Included in Accrued Liabilities |  | Included in Other Long-Term Liabilities
Balance as of December 31, 2021 | $ | 51 |  |  | $ | 3 |  |  | $ | 48 |
Additions | 27 |  |  |  |  |
Payments | (3) |  |  |  |  |
Fair value adjustments(1) | 12 |  |  |  |  |
Balance as of June 30, 2022 | $ | 87 |  |  | $ | 37 |  |  | $ | 50 |
(1) Amount included in Restructuring and other (see Note 5).

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI https://asc.fasb.org/topic&trid=2229140 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 40 -Section 50 -Paragraph 5 -Subparagraph (f) -URI https://asc.fasb.org/extlink&oid=126731327&loc=d3e90205-114008 + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration