Fair Value Measurements

6 Months Ended

Jun. 30, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 11 — Fair Value Measurements

The Company has categorized its assets and liabilities that are measured at fair value on a recurring and non-recurring basis into a three-level fair value hierarchy, based on the reliability of the inputs used to determine fair value as follows:

•Level 1: refers to fair values determined based on quoted market prices in active markets for identical assets;

•Level 2: refers to fair values estimated using observable market-based inputs or unobservable inputs that are corroborated by market data; and

•Level 3: includes fair values estimated using unobservable inputs that are not corroborated by market data.

The following methods and assumptions were used by the Company in estimating its fair value disclosure for financial instruments:

•Available-for-sale securities are classified as Level 1 because we use quoted market prices in determining the fair value of these securities.

•Market values for our derivative instruments have been used to determine the fair value of forward foreign exchange contracts based on estimated amounts the Company would receive or have to pay to terminate the agreements, taking into account observable information about the current foreign currency forward rates. Such financial instruments are classified as Level 2 in the fair value hierarchy.

•Contingent consideration payable is classified as Level 3, and we estimate fair value based on the likelihood and timing of achieving the relevant milestones of each arrangement, applying a probability assessment to each of the potential outcomes, which at times includes the use of a Monte Carlo simulation, and discounting the probability-weighted payout. Typically, milestones are based on revenue or earnings growth for the acquired business.

The following tables present our assets and liabilities measured at fair value on a recurring basis at June 30, 2022 and December 31, 2021:

		Fair Value Measurements on a Recurring Basis at June 30, 2022
	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities:
Mutual funds / exchange traded funds	Prepaid and other current assets and other non-current assets	$	7	$	—	$	—	$	7
	Fiduciary assets		131		—		—		131
Derivatives:
Derivative financial instruments (i)	Prepaid and other current assets and other non-current assets	$	—	$	2	$	—	$	2
Liabilities:
Contingent consideration:
Contingent consideration (ii)	Other current liabilities and other non-current liabilities	$	—	$	—	$	56	$	56
Derivatives:
Derivative financial instruments (i)	Other current liabilities and other non-current liabilities	$	—	$	18	$	—	$	18

		Fair Value Measurements on a Recurring Basis at December 31, 2021
	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale securities:
Mutual funds / exchange traded funds	Prepaid and other current assets and other non-current assets	$	9	$	—	$	—	$	9
	Fiduciary assets		152		—		—		152
Certificates of deposit/term deposits	Prepaid and other current assets and other non-current assets		200		—		—		200
Derivatives:
Derivative financial instruments (i)	Prepaid and other current assets and other non-current assets	$	—	$	18	$	—	$	18
Liabilities:
Contingent consideration:
Contingent consideration (ii)	Other current liabilities and other non-current liabilities	$	—	$	—	$	51	$	51
Derivatives:
Derivative financial instruments (i)	Other current liabilities and other non-current liabilities	$	—	$	—	$	—	$	—

(i)See Note 9 — Derivative Financial Instruments for further information on our derivative investments.

(ii)Probability weightings are based on our knowledge of the past and planned performance of the acquired entity to which the contingent consideration applies. The fair value weighted-average discount rates used in our material contingent consideration calculations were 12.00% and 11.92% at June 30, 2022 and December 31, 2021, respectively. The range of these discount rates was 3.53% - 13.80% at June 30, 2022. Using different probability weightings and discount rates could result in an increase or decrease of the contingent consideration payable.

The following table summarizes the change in fair value of the Level 3 liabilities:

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)	June 30, 2022
Balance at December 31, 2021	$	51
Obligations assumed		22
Payments		(20	)
Realized and unrealized losses (i)		5
Foreign exchange		(2	)
Balance at June 30, 2022	$	56

(i)Realized and unrealized losses include accretion and adjustments to contingent consideration liabilities, which are included within Interest expense and Other operating expenses, respectively, on the condensed consolidated statements of comprehensive income.

There were no significant transfers to or from Level 3 in the six months ended June 30, 2022.

Fair value information about financial instruments not measured at fair value

The following tables present our liabilities not measured at fair value on a recurring basis at June 30, 2022 and December 31, 2021:

	June 30, 2022				December 31, 2021
	Carrying Value		Fair Value		Carrying Value		Fair Value
Assets:
Long-term note receivable	$	65	$	63	$	69	$	70
Liabilities:
Current debt	$	—	$	—	$	613	$	616
Long-term debt	$	4,720	$	4,465	$	3,974	$	4,453

The carrying value of our revolving credit facility approximates its fair value. The fair values above, which exclude accrued interest, are not necessarily indicative of the amounts that the Company would realize upon disposition, nor do they indicate the Company’s intent or ability to dispose of the financial instruments. The fair values of our respective senior notes and long-term note receivable are considered Level 2 financial instruments as they are corroborated by observable market data.