Derivative Financial Instruments

3 Months Ended

Mar. 31, 2022

Derivative Instruments And Hedging Activities Disclosure [Abstract]

13. Derivative Financial Instruments

The Company is exposed to market risks, including changes in interest rates. To manage the risk related to these exposures, the Company has entered into various derivative instruments that reduce these risks by creating offsetting exposures.

Interest Rate Swaps

The Company has utilized swap agreements that will fix the floating interest rates associated with its Term Loan as shown in the following table:


Designation Date	Effective Date	Initial Notional Amount		Notional Amount Outstanding as of March 31, 2022			Fixed Rate			Expiration Date
July 2021	August 2020		557,500,000			557,500,000		2.5069	%	May 2022
July 2021	August 2020		89,863,420			101,365,120		3.0680	%	February 2023
December 2021	August 2020		181,205,050			162,935,400		0.7203	%	April 2024
December 2021	August 2020		388,877,200			367,997,600		0.6826	%	April 2024
December 2021	May 2022		220,130,318		n/a			0.4570	%	April 2024
December 2021	May 2022		306,004,562		n/a			0.4480	%	April 2024
December 2021	April 2024		871,205,040		n/a			1.6533	%	June 2025
December 2021	April 2024		435,602,520		n/a			1.6560	%	June 2025
December 2021	April 2024		435,602,520		n/a			1.6650	%	June 2025
March 2022	June 2025		1,197,000,000		n/a			2.5540	%	December 2026

Concurrent with the Term Loan refinancing, we amended our interest rate swaps to incorporate Term SOFR. In accordance with Accounting Standards Codification Topic 848, Reference Rate Reform, we did not redesignate the interest rate hedges when they were amended from LIBOR to SOFR; as we are permitted to maintain the designation through the transition. Also during the Successor three months ended March 31, 2022, we executed an additional interest rate swap, which has been designated as a cash flow hedge.

Our swap agreements amortize or accrete based on achieving targeted hedge ratios. All interest rate swaps have been designated as cash flow hedges. As a result of hedge amendments in December 2021 and July 2021, the fair value of the instruments at the time of re-designation are being amortized into interest expense over the remaining life of the instruments. The Company also entered into a new interest rate swap that will be effective June 2025 and will mature December 2026.

Financial Instrument Presentation

The fair values and location of outstanding derivative instruments recorded in the Condensed Consolidated Balance Sheets are as follows (in millions):


	March 31,		December 31,
	2022		2021
Assets
Other current assets	$	18	$	1
Other assets	$	58	$	16
Total	$	76	$	17

Liabilities
Other current liabilities	$	3	$	8
Other liabilities		1		1
Total	$	4	$	9

The Company estimates that approximately $17 million of derivative gains included in Accumulated other comprehensive income as of March 31, 2022 will be reclassified into earnings over the next twelve months.