FINANCIAL INSTRUMENTS, HEDGING ACTIVITIES AND FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2025

Fair Value Disclosures [Abstract]

FINANCIAL INSTRUMENTS, HEDGING ACTIVITIES AND FAIR VALUE MEASUREMENTS

FINANCIAL INSTRUMENTS, HEDGING ACTIVITIES AND FAIR VALUE MEASUREMENTS

Fair value of financial instruments

Equity securities with readily determinable fair values - Balances of equity securities are recorded within other assets, with any changes in fair value recorded within other expense (income), net. The fair values of equity securities are based upon quoted market prices, which are considered Level 1 inputs.

Long-term borrowings - The estimated fair values of these borrowings are based on recent trades, as reported by a third-party pricing service. Due to the infrequency of trades, these inputs are considered to be Level 2 inputs.

Derivative instruments - The Company’s interest rate swaps, cross-currency swaps and foreign currency forward contracts are valued using broker quotations or market transactions in either the listed or over-the-counter markets. As such, these derivative instruments are included in the Level 2 hierarchy.

Fair value of contingent consideration

Contingent consideration is valued using a probability-weighted expected payment method that considers the timing of expected future cash flows and the probability of whether key elements of the contingent event are completed. The fair value of contingent consideration is valued at each balance sheet date, until amounts become payable, with adjustments recorded within other expense (income), net in the condensed consolidated statements of operations. Due to the significant unobservable inputs used in the valuations, these liabilities are categorized within Level 3 of the fair value hierarchy.

The table below presents the fair values of our financial instruments measured on a recurring basis by level within the fair value hierarchy at September 30, 2025 and December 31, 2024.

	September 30, 2025								December 31, 2024
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Prepaid expenses and other current assets:
Interest rate swaps (1)	$	—	$	1	$	—	$	1	$	—	$	—	$	—	$	—
Cross-currency swaps (2)	—		9		—		9		—		12		—		12
Other assets:
Cross-currency swaps (2)	—		—		—		—		—		5		—		5
Investments in equity securities	1		—		—		1		1		—		—		1
Liabilities:
Other accrued liabilities:
Interest rate swaps (1)	—		—		—		—		—		1		—		1
Contingent consideration	—		—		2		2		—		—		2		2
Other liabilities:
Interest rate swaps (1)	—		1		—		1		—		—		—		—
Cross-currency swaps (2)	—		103		—		103		—		—		—		—
Long-term borrowings:
2029 Dollar Term Loans	—		1,690		—		1,690		—		1,709		—		1,709
2027 Dollar Senior Notes	—		499		—		499		—		490		—		490
2029 Dollar Senior Notes	—		664		—		664		—		637		—		637
2031 Dollar Senior Notes	—		524		—		524		—		519		—		519

(1)    Cash flow hedge

(2)    Net investment hedge

The table below presents a roll forward of activity for the Level 3 liabilities for the nine months ended September 30, 2025.

	Fair Value Using Significant Unobservable Inputs (Level 3)
Beginning balance at December 31, 2024	$	2
Business acquisition	1
Payments	(1)
Ending balance at September 30, 2025	$	2

Derivative Financial Instruments

We selectively use derivative instruments to reduce market risk associated with changes in foreign currency exchange rates and interest rates. The use of derivatives is intended for hedging purposes only, and we do not enter into derivative instruments for speculative purposes.

Derivative Instruments Qualifying and Designated as Cash Flow and Net Investment Hedges

Interest Rate Swaps Designated as Cash Flow Hedges

During the three months ended September 30, 2025, an interest rate swap associated with the 2029 Dollar Term Loans, which was previously executed in 2024, was set to expire. It was, instead, effectively terminated on September 25, 2025, and a new interest rate swap was simultaneously issued as is set forth in the below table. This interest rate swap is marked to market at each reporting date and any unrealized gains or losses are included in unrealized currency translation adjustments, within accumulated other comprehensive loss ("AOCI").

	Former			Current
Notional amount	$	150		$	175
Interest rate pay	4.692		%	3.303		%
Interest rate receive	3-month SOFR			3-month SOFR
Initial effective date	3/27/2024			9/25/2025
Maximum expiration date	9/30/2025 (1)			6/30/2028

(1)    The interest rate swap was effectively terminated on September 25, 2025.

Cross-Currency Swaps Designated as Net Investment Hedges

During the three months ended September 30, 2025, a fixed-for-fixed cross-currency swap, which was previously executed in 2024 and was set to expire on September 30, 2025, was effectively amended to extend the maturity to June 30, 2028, reset the terms, and increase the notional value as is set forth in the below table. This cross-currency swap is marked to market at each reporting date, and any unrealized gains or losses subject to the assessment of the hedge’s effectiveness are included in unrealized currency translation adjustments, within AOCI. Gains and losses for hedge components excluded from the assessment of effectiveness are recognized over the life of the hedge on a systematic and rational basis.

	Former			Current
Notional exchanged	$	150		$	175
Interest rate receive	6.692		%	5.053		%
Notional received	€	142		€	166
Interest rate pay	4.899		%	3.295		%
Initial effective date	3/27/2024			9/25/2025
Maximum expiration date	9/30/2025 (1)			06/30/2028

(1)    The cross-currency swap was effectively amended under new terms on September 25, 2025.

The following table sets forth the locations and amounts recognized during the three and nine months ended September 30, 2025 and 2024 for the Company's cash flow and net investment hedges.

		Three Months Ended September 30,
		2025				2024
Derivatives in Cash Flow and Net Investment Hedges	Location of (Gain) Loss Recognized in Income on Derivatives	Net Amount of Gain Recognized in OCI on Derivatives		Amount of Gain Recognized in Income		Net Amount of Loss Recognized in OCI on Derivatives		Amount of Gain Recognized in Income
Interest rate swaps	Interest expense, net	$	(1)	$	—	$	3	$	—
Cross-currency swaps	Interest expense, net	(3)		(4)		34		(3)

		Nine Months Ended September 30,
		2025				2024
Derivatives in Cash Flow and Net Investment Hedges	Location of (Gain) Loss Recognized in Income on Derivatives	Net Amount of (Gain) Loss Recognized in OCI on Derivatives		Amount of Gain Recognized in Income		Net Amount of Loss (Gain) Recognized in OCI on Derivatives		Amount of Gain Recognized in Income
Interest rate swaps	Interest expense, net	$	(1)	$	—	$	2	$	—
Cross-currency swaps	Interest expense, net	102		(13)		(14)		(11)

Over the next 12 months, we expect a gain of $1 million pertaining to cash flow hedges to be reclassified from AOCI into earnings, related to our interest rate swaps.

Derivative Instruments Not Designated as Cash Flow or Net Investment Hedges

We periodically enter into foreign currency forward and option contracts to reduce market risk and hedge our balance sheet exposures and cash flows for subsidiaries with exposures denominated in currencies different from the functional currency of the relevant subsidiary. These contracts have not been designated as hedges and all gains and losses are marked to market through other expense (income), net in the condensed consolidated statements of operations.

Fair value gains and losses of derivative contracts, as determined using Level 2 inputs, that have not been designated for hedge accounting treatment are recorded in earnings as follows:

Derivatives Not Designated as Hedging Instruments under ASC 815	Location of Loss (Gain) Recognized in Income on Derivatives	Three Months Ended September 30,				Nine Months Ended September 30,
		2025		2024		2025		2024
Foreign currency forward contracts	Other expense (income), net	$	2	$	—	$	(20)	$	(4)