XML 45 R20.htm IDEA: XBRL DOCUMENT v3.22.1
Financial Instruments
 3 Months Ended
Mar. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Financial Instruments Financial Instruments
We employ established policies and procedures to manage our exposure to changes in interest rates and foreign currencies. We use foreign exchange forward and option contracts to hedge certain short-term foreign currency denominated loans and third-party and intercompany transactions. We may also use foreign exchange forward contracts to hedge our net investments in our foreign subsidiaries. In addition, we may use interest rate derivatives to hedge a portion of the interest rate exposure on our outstanding debt or in anticipation of a future debt issuance, as discussed under “Interest Rate Risk Management” below.
We do not use derivative financial instruments for trading or speculative purposes. If a hedging instrument is not designated as a hedge or ceases to qualify as a hedge in accordance with hedge accounting guidelines, any subsequent gains and losses are recognized currently in income. Collateral is generally not required for these types of instruments.
By their nature, all such instruments involve risk, including the credit risk of non-performance by counterparties. However, at March 31, 2022 and December 31, 2021, there was no significant risk of loss in the event of non-performance of the counterparties to these financial instruments. We control our exposure to credit risk through monitoring procedures and by selection of reputable counterparties.
Our trade receivables do not represent a significant concentration of credit risk at March 31, 2022 and December 31, 2021, because we sell to a large number of clients in different geographical locations and industries.
Interest Rate Risk Management
Our objective in managing our exposure to interest rates is to limit the impact of interest rate changes on our earnings, cash flows and financial position, and to lower our overall borrowing costs. To achieve these objectives, we maintain a practice that floating-rate debt be managed within a minimum and maximum range of our total debt exposure. To manage our exposure
and limit volatility, we may use fixed-rate debt, floating-rate debt and/or interest rate swaps. We recognize all derivative instruments as either assets or liabilities at fair value in the consolidated balance sheet.
We use interest rate swaps to manage the impact of interest rate changes on our earnings. Under the swap agreements, we make monthly payments based on the fixed interest rate and receive monthly payments based on the floating rate. The objective of the swaps is to mitigate the variation of future cash flows from changes in the floating interest rates on our existing debt. The swaps are designated and accounted for as cash flow hedges. Changes in the fair value of the hedging instruments are recorded in other comprehensive income (loss) and reclassified to earnings in the same line item associated with the hedged item when the hedged item impacts earnings.
The notional amount of the interest rate swaps designated as cash flow hedging instruments was $1.25 billion and $1 billion at March 31, 2022 and December 31, 2021, respectively.
On March 2, 2022, the Company entered into three-year interest rate swaps with an aggregate notional amount of $250 million, effective February 28, 2022 through February 27, 2025. For these swaps, the Company pays a fixed rate of 1.629% and receives the one-month Term SOFR rate.
On March 30, 2021, the Company entered into three-year interest rate swaps with an aggregate notional amount of $1 billion, effective March 29, 2021 through March 27, 2024. For these swaps, the Company pays a fixed rate of 0.467% and receives the one-month LIBOR rate.
Foreign Exchange Risk Management
Our objective in managing exposure to foreign currency fluctuations is to reduce the volatility caused by foreign exchange rate changes on the earnings, cash flows and financial position of our international operations. From time to time, we follow a practice of hedging certain balance sheet positions denominated in currencies other than the functional currency applicable to each of our various subsidiaries. In addition, we are subject to foreign exchange risk associated with our international earnings and net investments in our foreign subsidiaries. We may use short-term, foreign exchange forward and, from time to time, option contracts or cross currency swaps, to execute our hedging strategies. These contracts are denominated primarily in the British pound sterling, the Euro, the Swedish Krona, and the Norwegian Krone. The gains and losses on the forward contracts associated with our balance sheet positions are recorded in “Other income (expense) – net” in the condensed consolidated statements of operations and comprehensive income (loss) and are essentially offset by the losses and gains on the underlying foreign currency transactions. Our foreign exchange forward contracts are not designated as hedging instruments under authoritative guidance and typically have maturities of 12 months or less.
To decrease earnings volatility, we currently hedge substantially all our intercompany balance positions denominated in a currency other than the functional currency applicable to each of our various subsidiaries with short-term, foreign exchange forward contracts. The underlying transactions and the corresponding foreign exchange forward contracts are marked to market at the end of each quarter and the fair value impacts are reflected within “Non-operating income (expense) – net” in the consolidated financial statements. In addition, in connection with the acquisition of Bisnode, we entered into a zero-cost foreign currency collar in October 2020, with a notional amount of SEK 4.8 billion to reduce our foreign currency exposure. Unrealized gain associated with the instrument was $23.5 million at December 31, 2020. We settled the collar on January 8, 2021 with a total realized gain of $21.0 million upon the close of the Bisnode transaction, resulting in a loss of $2.5 million for the three months ended March 31, 2021.
As of March 31, 2022 and December 31, 2021, the notional amounts of our foreign exchange contracts were $383.1 million and $448.5 million, respectively.
Fair Values of Derivative Instruments in the Condensed Consolidated Balance Sheets
 
 Asset derivativesLiability derivatives
 March 31, 2022December 31, 2021March 31, 2022December 31, 2021
 Balance sheet
location		Fair valueBalance sheet
location		Fair valueBalance sheet
location		Fair valueBalance sheet
location		Fair value
Derivatives designated as hedging instruments
Interest rate contractsInterest rate swap asset$42.4 Interest rate swap asset$10.1 Other accrued &
current liabilities		$— Other accrued &
current liabilities		$— 
Total derivatives designated as hedging instruments$42.4 $10.1 $— $— 
Derivatives not designated as hedging instruments
Foreign exchange forward contractsOther current
assets		0.7 Other current
assets		1.9 Other accrued &
current liabilities		1.0 Other accrued &
current liabilities		0.7 
Total derivatives not designated as hedging instruments$0.7 $1.9 $1.0 $0.7 
Total derivatives$43.1 $12.0 $1.0 $0.7 

The Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations and Comprehensive Income (Loss)
Amount of pre-tax gain or (loss) recognized in OCI on derivativeAmount of gain or (loss) reclassified from accumulated OCI into incomeAmount of gain or (loss) recognized in income on derivative
Three months ended March 31, Three months ended March 31, Three months ended March 31,
Derivatives in cash flow hedging relationships20222021Location of gain or (loss) reclassified from accumulated OCI into income20222021Location of gain or (loss) recognized in income on derivative20222021
Interest rate contracts$32.3 $1.8 Interest expense$(1.1)$(0.8)Interest expense$(1.1)$(0.8)

Amount of gain (loss) recognized in income on derivatives
Three months ended March 31,
Derivatives not designated as hedging instrumentsLocation of gain or (loss) recognized in income on derivatives20222021
Foreign exchange collarNon-operating income (expenses) – net$— $(2.5)
Foreign exchange forward contractsNon-operating income (expenses) – net$(3.2)$2.9 

The net amount expected to be reclassified into earnings over the next 12 months is approximately $13 million.
Fair Value of Financial Instruments
Our financial assets and liabilities that are reflected in the consolidated financial statements include derivative financial instruments, cash and cash equivalents, accounts receivable, other receivables, accounts payable, short-term borrowings and long-term borrowings.
The following table summarizes fair value measurements by level at March 31, 2022 for assets and liabilities measured at fair value on a recurring basis:
Quoted prices in
active markets
for identical
assets (level I)		Significant other
observable
inputs (level II)		Significant
unobservable
inputs
(level III)		Balance at
March 31, 2022
Assets:
Cash equivalents (1)$2.7 $— $— $2.7 
Other current assets:
Foreign exchange forwards (2)$— $0.7 $— $0.7 
Swap arrangements (3)$— $42.4 $— $42.4 
Liabilities:
Other accrued and current liabilities:
Foreign exchange forwards (2)$— $1.0 $— $1.0 
The following table summarizes fair value measurements by level at December 31, 2021 for assets and liabilities measured at fair value on a recurring basis:
Quoted prices in
active markets
for identical
assets (level I)		Significant other
observable
inputs (level II)		Significant
unobservable
inputs
(level III)		Balance at December 31, 2021
Assets:
Cash equivalents (1)$1.7 $— $— $1.7 
Other current assets:
Foreign exchange forwards (2)$— $1.9 $— $1.9 
Swap arrangements (3)$— $10.1 $— $10.1 
Liabilities:
Other accrued and current liabilities:
Foreign exchange forwards (2)$— $0.7 $— $0.7 
(1)The carrying value of cash equivalents represents fair value as they consist of highly liquid investments with an initial term from the date of purchase by the Company to maturity of three months or less.
(2)Primarily represents foreign currency forward contracts. Fair value is determined based on observable market data and considers a factor for nonperformance in the valuation.
(3)Represents interest rate swap agreements. Fair value is determined based on observable market data.
There were no transfers between Levels I and II or transfers in or transfers out of Level III in the fair value hierarchy for both the three months ended March 31, 2022 and 2021.
At March 31, 2022 and December 31, 2021, the fair value of cash and cash equivalents, accounts receivable, other receivables and accounts payable approximated carrying value are due to the short-term nature of these instruments. The estimated fair values of other financial instruments subject to fair value disclosures, determined based on valuation models using discounted cash flow methodologies with market data inputs from globally recognized data providers and third-party quotes from major financial institutions (categorized as Level II in the fair value hierarchy), are as follows:
 
 Balance at
 March 31, 2022December 31, 2021
 Carrying
amount		Fair valueCarrying
amount		Fair value
Long-term debt (1)$453.3 $431.1 $866.4 $924.5 
Revolving facility$100.0 $104.9 $160.0 $162.7 
Term loans (2)$3,168.1 $3,421.1 $2,718.4 $2,840.7 
(1)Includes the 5.000% Senior Unsecured Notes at March 31, 2022, and the 5.000% Senior Unsecured Notes and 6.875% Senior Secured Notes at December 31, 2021.
(2)Includes short-term and long-term portions of the term loans.
Items Measured at Fair Value on a Nonrecurring Basis
In addition to assets and liabilities that are recorded at fair value on a recurring basis, we record assets and liabilities at fair value on a nonrecurring basis as required by GAAP. Generally, assets are recorded at fair value on a nonrecurring basis as a result of impairment charges and for acquisition accounting in accordance with the guidance in ASC 805 "Business Combinations."