Fair Value

12 Months Ended

Dec. 31, 2021

14. FAIR VALUE

Assets and Liabilities that are Measured at Fair Value on a Recurring Basis

The following table presents our financial instruments measured at fair value on a recurring basis and indicates the level within the fair value hierarchy (in millions):


(In millions)	Level	December 31, 2021		December 31, 2020

Interest rate swap contracts (a)	2	$	—	$	5


Total liabilities		$	—	$	5
(a) These interest rate swaps matured on July 31, 2021. See Note 15 - Derivatives

Interest Rate Swap Contracts

Our five interest rate swap contracts which were over-the-counter and were not traded through an exchange matured on July 31, 2021. The fair values of our swap contracts were determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets. See Note 15 - Derivatives.

Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities may be required to be measured at fair value on a nonrecurring basis. We do not periodically adjust carrying value to fair value for these assets or liabilities; rather, the carrying value of the asset is reduced to its fair value when there is evidence of impairment.

During the year ended December 31, 2021, we recorded an impairment of intangible assets of $6 million included in selling, general and administrative expense in our consolidated statements of operations in our North America segment. The fair value of the intangible assets was determined to be zero as such assets were deemed to have no future economic benefit based on the market participant assumptions and no expected future cash flows. See Note 6 - Goodwill and Other Intangibles, Net.

During the year ended December 31, 2020, we recorded an operating lease right-of-use asset impairment of $8 million included in Selling, general and administrative expense in our consolidated statements of operations in our North America segment as this asset group was not recoverable based on COVID-19's effect on the subleasing market as well as other asset group specific factors. The fair value of the operating lease right-of-use asset was $8 million, determined using the discounted expected cash flow. The significant unobservable inputs utilized in this Level 3 fair value measurement included market rent assumptions and discount rate.

Assets and Liabilities that are not Measured at Fair Value

Financial Assets and Liabilities

The carrying amounts reported on the consolidated balance sheets for cash and cash equivalents, accounts receivables, other receivables, accounts payable, and accrued expenses approximate their fair value due to the short maturity of those instruments.

Long-Term Debt

Our Long-term debt is classified as a Level 2 instrument. The carrying amount of the term loan facility approximates fair value given the underlying interest rate applied to such amounts outstanding is currently reset to the prevailing monthly market rate. See Note 7 - Long-Term Debt and Other Borrowings, Net.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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