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DERIVATIVES AND HEDGING INSTRUMENTS | 12 Months Ended
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Dec. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
DERIVATIVES AND HEDGING INSTRUMENTS | 15. DERIVATIVES AND HEDGING INSTRUMENTS The Company is exposed to certain risks arising from both our business operations and economic conditions. We principally manage exposures to a wide variety of business and operational risk through management of core business activities. We manage interest rate risk by managing the amount, sources, and duration of debt funding. The Company has historically used interest rate cap agreements or interest rate swap contracts (“Interest Rate Derivatives”) to manage differences in the amount, timing and duration of known or expected cash payments related to our floating rate-debt agreements. Further, a portion of our operations and revenue occur outside the United States and, as such, the Company has exposure to approximately 30 functional currencies. Our results can be significantly impacted, both positively and negatively, by changes in foreign currency exchange rates. The Company seeks to mitigate such impact by hedging its foreign currency transaction exposure using foreign currency forward and option contracts. We do not enter into hedges for speculative purposes. Foreign Currency Exchange Risk We utilize foreign exchange contracts to hedge our exposure of assets and liabilities denominated in non-functional currencies. We recognize the gains and losses on these types of hedges in earnings as exchange rates change. Historically, our risk management strategy included hedging, on behalf of certain subsidiaries, a portion of our forecasted, non-functional currency denominated cash flows for a period of up to 15 months. If the hedge was designated as a highly effective cash flow hedge, the gains or losses were deferred into accumulated other comprehensive income (“AOCI”). The gains or losses from derivative contracts that were designated as highly effective cash flow hedges related to inventory purchases were recorded in cost of products when the inventory is sold to an unrelated third party. Otherwise, they were recorded in earnings when the exchange rates change. As of December 31, 2024 and 2023, the balance in AOCI related to foreign exchange derivative transactions was zero. The accounting guidance for derivatives and hedging requires companies to recognize all derivative instruments as either assets or liabilities at fair value in the Consolidated Balance Sheets. The Company designates foreign exchange contracts as cash flow hedges of forecasted transactions when they are determined to be highly effective at inception. Interest Rate Risk We historically utilized interest rate swap contracts or interest rate cap agreements to add stability to interest cost and to manage exposure to interest rate movements as part of our interest rate risk management strategy. The Company designates Interest Rate Derivative contracts as cash flow hedges of forecasted transactions when they are determined to be highly effective at inception. Payments and receipts related to Interest Rate Derivatives are included in cash flows from operating activities in the Consolidated Statements of Cash Flows. In March 2022, the Company terminated the outstanding $2 billion notional amount interest rate cap agreements maturing in 2024 for proceeds of $64 million. In March 2022, the Company executed $2.2 billion aggregate notional amount interest rate swap contracts that began April 1, 2022 and had an original termination date of April 1, 2025. These interest rate swap contracts had fixed rates ranging from 2.078% to 2.443%, and were designated as cash flow hedges of the floating rate interest associated with the Company’s previous TLA Facility. In June 2022, the Company terminated the outstanding $2.4 billion aggregate notional interest rate swap contracts maturing in 2025 for proceeds of $55 million. As of September 30, 2023, it was determined that the transactions underlying the unrealized gains on terminated interest rate swap agreement for the previous TLA facility reported in Accumulated other comprehensive income were probable of not occurring under ASC 815, Derivatives and Hedging. As such, $18 million of unrealized gains were recognized in Interest Expense in the Consolidated Statements of Operations for the year ended December 31, 2023. As of December 31, 2024 and December 31, 2023, the balance in AOCI related to Interest Rate Derivatives was zero. The following tables provide information on the location and amounts of derivative fair values in the Consolidated Balance Sheets:
| Fair Values of Derivative Instruments
| December 31, 2024
In millions | Balance Sheet Location |  | Notional Amount |  | Fair Value |  | Balance Sheet Location |  | Notional Amount |  | Fair Value
Derivatives not designated as hedging instruments |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts | Prepaid and other current assets |  |  |  | $ | — |  |  | Other current liabilities |  |  |  | $ | — |
Total derivatives not designated as hedging instruments |  |  | $ | 89 |  |  | $ | — |  |  |  |  | $ | 126 |  |  | $ | — |
Total derivatives |  |  |  |  | $ | — |  |  |  |  |  |  | $ | — |
| Fair Values of Derivative Instruments
| December 31, 2023
In millions | Balance Sheet Location |  | Notional Amount |  | Fair Value |  | Balance Sheet Location |  | Notional Amount |  | Fair Value
Derivatives not designated as hedging instruments |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts | Prepaid and other current assets |  |  |  | $ | 5 |  |  | Other current liabilities |  |  |  | $ | (4) |
Total derivatives not designated as hedging instruments |  |  | $ | 402 |  |  | $ | 5 |  |  |  |  | $ | 207 |  |  | $ | (4) |
Total derivatives |  |  |  |  | $ | 5 |  |  |  |  |  |  | $ | (4) |
The effects of derivative instruments on the Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income for the years ended December 31, 2024, 2023, and 2022 were as follows:
In millions | Amount of Gain (Loss) Recognized in Other Comprehensive Income (OCI) on Derivative |  |  |  | Amount of (Gain) Loss Reclassified from AOCI into the Consolidated Statements of Operations
| For the year ended December 31, 2024 |  | For the year ended December 31, 2023 |  | For the year ended December 31, 2022 |  | Location of (Gain) Loss Reclassified from AOCI into the Consolidated Statements of Operations |  | For the year ended December 31, 2024 |  | For the year ended December 31, 2023 |  | For the year ended December 31, 2022
Interest rate contracts | $ | — |  |  | $ | — |  |  | $ | 116 |  |  | Cost of services |  | $ | — |  |  | $ | — |  |  | $ | (8) |
Interest rate contracts | $ | — |  |  | $ | — |  |  | $ | 36 |  |  | Interest expense |  | $ | — |  |  | $ | (31) |  |  | $ | (10) |
In millions |  |  | Amount of Gain (Loss) Recognized in the Consolidated Statements of Operations
Derivatives not Designated as Hedging Instruments | Location of Gain (Loss) Recognized in the Consolidated Statements of Operations |  | For the year ended December 31, 2024 |  | For the year ended December 31, 2023 |  | For the year ended December 31, 2022
Foreign exchange contracts | Other income (expense), net |  | $ | (8) |  |  | $ | (8) |  |  | $ | (15) |
The following tables show the impact of the Company’s cash flow hedge accounting relationships on the Consolidated Statement of Operations for the years ended December 31, 2024, 2023, and 2022.
|  | Location and Amount of (Gain) Loss Recognized in Income on Cash Flow Hedging Relationships for the years ended December 31:
In millions |  | Cost of Services |  | Cost of Products |  | Interest Expense
|  | 2024 | 2023 | 2022 |  | 2024 | 2023 | 2022 |  | 2024 | 2023 | 2022
Total amount of expense presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded |  | $ | 1,477 |  | $ | 1,460 |  | $ | 1,387 |  |  | $ | 770 |  | $ | 1,049 |  | $ | 1,103 |  |  | $ | (134) |  | $ | (294) |  | $ | (285) |
Amount of (gain) loss reclassified from Accumulated other comprehensive loss, net of expense |  | $ | — |  | $ | — |  | $ | (8) |  |  | $ | — |  | $ | — |  | $ | — |  |  | $ | — |  | $ | (31) |  | $ | (10) |
Refer to Note 16, “Fair Value of Assets and Liabilities”, for further information on derivative assets and liabilities recorded at fair value on a recurring basis. Concentration of Credit Risk The Company is potentially subject to concentrations of credit risk on accounts receivable and financial instruments such as hedging instruments and cash and cash equivalents. Credit risk includes the risk of nonperformance by counterparties. The maximum potential loss may exceed the amount recognized on the Consolidated Balance Sheets. Exposure to credit risk is managed through credit approvals, credit limits, selecting major international financial institutions as counterparties to hedging transactions and monitoring procedures. The Company’s business often involves large transactions with customers, and if one or more of those customers were to default on its obligations under applicable contractual arrangements, the Company could be exposed to potentially significant losses. However, management believes that the reserves for potential losses are adequate. As of December 31, 2024 and 2023, the Company did not have any major concentration of credit risk related to financial instruments.

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