Derivative Financial Instruments

9 Months Ended

Sep. 30, 2021

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 September 30, 2021			Fixed Rate			Expiration Date
July 2021	August 2020		557,500,000			557,500,000		2.5070	%	May 2022
July 2021	August 2020		89,863,420			98,078,920		3.0854	%	February 2023
July 2021	August 2020		181,205,050			168,155,300		0.7775	%	May 2024
July 2021	August 2020		388,877,200			373,963,200		0.7430	%	May 2024
July 2021	May 2022		220,130,318		n/a			0.5170	%	May 2024
July 2021	May 2022		306,004,562		n/a			0.5127	%	May 2024

Concurrent with execution of the Business Combination and the $556 million pay down of the Term Loan, three hedges were terminated, and two previously unfloored hedges were amended to incorporate an interest rate floor of 50 bps. All interest rate swaps were redesignated as cash flow hedges in accordance with ASC 805.

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 the amendment, 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.

Financial Instrument Presentation

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

	Successor		Predecessor
	September 30,		December 31,
	2021		2020
Assets
Other assets	$	5	$	—
Total	$	5	$	—

Liabilities
Other current liabilities	$	12	$	28
Other liabilities		1		19
Total	$	13	$	47

The Company estimates that approximately $2 million of derivative losses included in Accumulated other comprehensive loss as of September 30, 2021 will be reclassified into earnings over the next twelve months.