Liabilities fair value

[Table of Contents](#ifd0dff1f28084ac0b92d7f0a49d14a91_7)Note 12. Hedging Activities, Derivative Instruments and Fair Value MeasurementsHedging ActivitiesThe Company is exposed to certain market risks during the normal course of its business arising from adverse changes in interest rates and foreign currency exchange rates. The Company selectively uses derivative financial instruments (“derivatives”), including cross-currency interest rate swap and foreign currency forward contracts and interest rate swap and cap contracts, to manage the risks from fluctuations in foreign currency exchange rates and interest rates, respectively. The Company does not purchase or hold derivatives for trading or speculative purposes.The Company’s exposure to interest rate risk results primarily from its variable-rate borrowings. The Company manages its debt centrally, considering tax consequences and its overall financing strategies. The Company manages its exposure to interest rate risk by using interest rate caps and pay-fixed swaps as cash flow hedges of variable rate debt in order to adjust the relative fixed and variable proportions.A substantial portion of the Company’s operations is conducted by its subsidiaries outside of the United States in currencies other than the USD. Almost all of the Company’s non-U.S. subsidiaries conduct their business primarily in their local currencies, which are also their functional currencies. The USD, the EUR, GBP, Chinese Renminbi and Indian rupee are the principal currencies in which the Company and its subsidiaries enter into transactions. The Company is exposed to the impacts of changes in foreign currency exchange rates on the translation of its non-U.S. subsidiaries’ assets, liabilities and earnings into USD. The Company manages this exposure by having certain U.S. subsidiaries borrow in currencies other than the USD or utilizing cross-currency interest rate swaps as net investment hedges.The Company and its subsidiaries are also subject to the risk that arises when they, from time to time, enter into transactions in currencies other than their functional currency. To mitigate this risk, the Company and its subsidiaries typically settle intercompany trading balances at least quarterly. The Company also selectively uses forward currency contracts to manage this risk. These contracts for the sale or purchase of European and other currencies generally mature within one year.Derivative InstrumentsThe following table summarizes the notional amounts, fair values and classification of the Company’s outstanding derivatives by risk category and instrument type within the Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021.

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| September 30, 2022 |
| Derivative Classification |  | Notional Amount(1) |  | Fair Value(1) Other Current Assets |  | Fair Value(1) Other Assets |  | Fair Value(1) Accrued Liabilities |  | Fair Value(1) Other Liabilities |
| Derivatives Designated as Hedging Instruments |  |  |  |  |  |  |  |  |
| Interest rate swap contracts | Cash flow |  | $ | 528.5  |  |  | $ | 5.6  |  |  | $ | 7.8  |  |  | $ | —  |  |  | $ | —  |  |
| Interest rate cap contracts | Cash flow |  | 1,000.0  |  |  | 4.6  |  |  | 13.9  |  |  | —  |  |  | —  |  |
| Cross-currency interest rate swap contracts | Net investment |  | 1,054.2  |  |  | 20.2  |  |  | 46.1  |  |  | —  |  |  | —  |  |
| Derivatives Not Designated as Hedging Instruments |  |  |  |  |  |  |  |  |
| Foreign currency forwards | Fair value |  | $ | 22.8  |  |  | $ | 0.4  |  |  | $ | —  |  |  | $ | —  |  |  | $ | —  |  |
| Foreign currency forwards | Fair value |  | —  |  |  | —  |  |  | —  |  |  | —  |  |  | —  |  |



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| December 31, 2021 |
| Derivative Classification |  | Notional Amount(1) |  | Fair Value(1) Other Current Assets |  | Fair Value(1) Other Assets |  | Fair Value(1) Accrued Liabilities |  | Fair Value(1) Other Liabilities |
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| Derivatives Not Designated as Hedging Instruments |  |  |  |  |  |  |  |  |
| Foreign currency forwards | Fair Value |  | $ | 22.1  |  |  | $ | —  |  |  | $ | —  |  |  | $ | —  |  |  | $ | —  |  |
| Foreign currency forwards | Fair Value |  | 19.3  |  |  | —  |  |  | —  |  |  | 0.2  |  |  | —  |  |

(1)Notional amounts represent the gross contract amounts of the outstanding derivatives excluding the total notional amount of positions that have been effectively closed through offsetting positions. The net gains and net losses associated with positions that have been effectively closed through offsetting positions but not yet settled are included in the asset and liability derivatives fair value columns, respectively.25
