question
stringlengths 4
546
| answer
stringlengths 1
29
| task
stringclasses 4
values | context
stringlengths 115
29.1k
⌀ | context_type
stringclasses 2
values | options
sequencelengths | program
stringlengths 13
1.03k
⌀ |
|---|---|---|---|---|---|---|
Stock issued during period, period decrease (in shares) | 3.1 | SEC-NUM |
[Table](#i433d81903e814837b268e57261b357cb_7) [of Contents](#i433d81903e814837b268e57261b357cb_7)the court to impose would be in the order of up to AU$15 million. The parties await a ruling. We recorded an estimated probable loss of approximately $11 million with respect to these proceedings in a previous period. An estimate for the reasonable possible loss or range of loss in excess of the amount reserved cannot be made.NOTE 16 – DivestituresOn November 1, 2021, we completed the sale of Egencia, Expedia Group’s corporate travel arm included within our B2B segment, to GBT. As a result of the sale, we deconsolidated Egencia, recognized a gain of $401 million within gain (loss) on sale of business, net in the consolidated statement of operations and divested cash and restricted cash of $88 million. We received no cash for this transaction but Expedia Group became an indirect holder of an approximately 19% interest of GBT with an initial fair value of $815 million, and a subsidiary entered into a 10-year lodging supply agreement with GBT. We have elected to account for our investment under the fair value option (see NOTE 3 — Fair Value Measurements). The 19% of indirect interest is subject to changes based on final debt/cash and working capital adjustments and, any such adjustment, would impact our gain on the sale.In addition, during 2020 and 2021, in connection with our efforts to focus on our core businesses and streamline our activities, we committed to plans to divest certain smaller businesses primarily within our Retail segment. As a result, in 2020, we completed the sale of certain smaller businesses, including Bodybuilding.com and SilverRail, which combined resulted in a net losses of $13 million and net cash divested of $21 million. In 2021, we completed additional sales including Classic Vacations and Alice, which combined resulted in net gains of $57 million and net cash received of $27 million. The resulting gains and losses in these transactions were recorded within gain (loss) on sale of business, net in the consolidated statement of operations.None of these dispositions were considered a strategic shift that will have a major effect on our operations or financial results and they did not represent individually significant components of our business; therefore, they have not been reported as discontinued operations. NOTE 17 – Liberty Expedia Holdings Transaction On July 26, 2019, Expedia Group acquired all of the outstanding shares of Liberty Expedia Holdings, Inc. (“Liberty Expedia Holdings”) in a merger transaction in which the outstanding shares of Liberty Expedia Holdings’ Series A common stock and Series B common stock were exchanged for newly issued shares of common stock of Expedia Group with a fair value of $2.9 billion, assumption of $400 million in debt and $15 million of cash (the "Liberty Expedia Transaction"). We accounted for the acquired Liberty Expedia Holdings assets and liabilities, except for the Expedia Group shares repurchased, as a business combination. We accounted for the acquired Expedia Group shares held by Liberty Expedia Holdings as a share repurchase for consideration of $3.2 billion. As a result of this transaction, Expedia Group’s shares outstanding were reduced by approximately 3.1 million shares. The fair value of the assets and liabilities acquired in the business combination was $96 million, which was primarily comprised of $78 million of cash and $10 million of a trade name definite lived intangible asset related to Bodybuilding.com. Bodybuilding.com is primarily an Internet retailer of dietary supplements, sports nutrition products, and other health and wellness products. No goodwill was recorded for the portion of the transaction accounted for as a business combination.In connection with the Liberty Expedia Transaction, a wholly-owned subsidiary of Expedia Group, Inc. (“Merger LLC”) assumed the obligations of Liberty Expedia Holdings with respect to the $400 million aggregate outstanding principal amount of 1.0% Exchangeable Senior Debentures due 2047 issued by Liberty Expedia Holdings (the “Exchangeable Debentures”) and the indenture governing the Exchangeable Debentures. On August 26, 2019, Merger LLC redeemed all of the Exchangeable Debentures in exchange for a total payment, including accrued and unpaid interest, of approximately $401 million.Bodybuilding.com was consolidated into our financial statements starting on the acquisition date and we recognized $58 million in revenue and $7 million in operating losses for the year ended December 31, 2019, which was included within Corporate and Eliminations in our segment footnote. For information related to the Liberty Expedia Holdings Transaction, see NOTE 18 — Related Party Transactions below.NOTE 18 — Related Party Transactions Mr. Diller is the Chairman and Senior Executive of Expedia Group. Certain relationships between Mr. Diller and the Company in connection with the Liberty Expedia Transaction (as defined below) are described below.Prior to the closing of the Liberty Expedia Transaction on July 26, 2019, Liberty Expedia Holdings and its subsidiaries held 11,076,672 shares of Expedia Group common stock and 12,799,999 shares of Expedia Group Class B common stock, which shares represented approximately 53% of the total voting power of all shares of Expedia Group common stock and Class F- 40
| string | null | null |
Loss contingency, range of possible loss, portion not accrued | 25,000 | SEC-NUM |
[Table of Contents](#i1d117440a79147f69db4408bc4f22334_10) Part IV
| | | |
| --- | --- | --- |
| | | |
| |
IRON MOUNTAIN INCORPORATEDNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)DECEMBER 31, 2021(In thousands, except share and per share data)8. COMMITMENTS AND CONTINGENCIES (CONTINUED)C. LITIGATION—GENERALWe are involved in litigation from time to time in the ordinary course of business, including litigation arising from damage to customer assets in our facilities caused by fires and other natural disasters. A portion of the defense and/or settlement costs associated with such litigation is covered by various commercial liability insurance policies purchased by us and, in limited cases, indemnification from third parties. Our policy is to establish reserves for loss contingencies when the losses are both probable and reasonably estimable. We record legal costs associated with loss contingencies as expenses in the period in which they are incurred. While the outcome of litigation is inherently uncertain, we do not believe any current litigation will have a material adverse effect on our consolidated financial condition, results of operations or cash flows. We have estimated a reasonably possible range for all loss contingencies and believe it is reasonably possible that we could incur aggregate losses in addition to amounts currently accrued for all matters up to an additional $25,000 over the next several years. 9. STOCKHOLDERS’ EQUITY MATTERSOur board of directors has adopted a dividend policy under which we have paid, and in the future intend to pay, quarterly cash dividends on our common stock. The amount and timing of future dividends will continue to be subject to the approval of our board of directors, in its sole discretion, and to applicable legal requirements.In 2019, 2020 and 2021, our board of directors declared the following dividends:
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| DECLARATION DATE | | DIVIDENDPER SHARE | | RECORD DATE | | TOTAL AMOUNT | | PAYMENT DATE |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| February 7, 2019 | | $ | 0.6110 | | | March 15, 2019 | | $ | 175,242 | | | April 2, 2019 |
| May 22, 2019 | | 0.6110 | | | June 17, 2019 | | 175,389 | | | July 2, 2019 |
| July 26, 2019 | | 0.6110 | | | September 16, 2019 | | 175,434 | | | October 2, 2019 |
| October 31, 2019 | | 0.6185 | | | December 16, 2019 | | 177,687 | | | January 2, 2020 |
| February 13, 2020 | | 0.6185 | | | March 16, 2020 | | 178,047 | | | April 6, 2020 |
| May 5, 2020 | | 0.6185 | | | June 15, 2020 | | 178,212 | | | July 2, 2020 |
| August 5, 2020 | | 0.6185 | | | September 15, 2020 | | 178,224 | | | October 2, 2020 |
| November 4, 2020 | | 0.6185 | | | December 15, 2020 | | 178,290 | | | January 6, 2021 |
| February 24, 2021 | | 0.6185 | | | March 15, 2021 | | 178,569 | | | April 6, 2021 |
| May 6, 2021 | | 0.6185 | | | June 15, 2021 | | 179,026 | | | July 6, 2021 |
| August 5, 2021 | | 0.6185 | | | September 15, 2021 | | 179,080 | | | October 6, 2021 |
| November 4, 2021 | | 0.6185 | | | December 15, 2021 | | 179,132 | | | January 6, 2022 |
On February 24, 2022, we declared a dividend to our stockholders of record as of March 15, 2022 of $0.6185 per share, payable on April 6, 2022.
| | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | |
| 111 | IRON MOUNTAIN 2021 FORM 10-K | |
| string | null | null |
Vested (in shares) | 2,205 | SEC-NUM |
[Table of Contents](#if58bf2b7da5f49b78db442640b215d13_7)
| | | |
| --- | --- | --- |
| | | |
| Restricted Stock Unit and Restricted Stock Activity |
A summary of restricted stock unit (RSU) and restricted stock activity for the nine months ended April 30, 2022 was as follows:
| | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | |
| (Shares in thousands) | Numberof Shares | | WeightedAverageGrant DateFair Value |
| Nonvested at July 31, 2021 | 9,038 | | | $ | 345.86 | |
| | | | |
| Granted (1) | 2,134 | | | 568.65 | |
| Vested | (2,205) | | | 318.74 | |
| Forfeited | (813) | | | 354.69 | |
| Nonvested at April 30, 2022 | 8,154 | | | $ | 410.63 | |
(1)Includes approximately 583,000 RSUs granted to the employees of Mailchimp in substitution of outstanding equity incentive awards with a grant date fair value of $355 million and approximately 325,000 RSUs granted to the employees of Mailchimp in connection with the acquisition with a grant date fair value of $211 million. See Note 5, "Business Combinations."At April 30, 2022, there was approximately $2.8 billion of unrecognized compensation cost related to non-vested RSUs and restricted stock with a weighted average vesting period of 2.7 years. We will adjust unrecognized compensation cost for actual forfeitures as they occur.
| | | |
| --- | --- | --- |
| | | |
| Stock Option Activity |
A summary of stock option activity for the nine months ended April 30, 2022 was as follows:
| | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | |
| | Options Outstanding |
| (Shares in thousands) | Number of Shares | | WeightedAverageExercisePrice Per Share |
| Balance at July 31, 2021 | 2,204 | | | $ | 251.48 | |
| | | | |
| Granted | — | | | — | |
| Exercised | (151) | | | 166.02 | |
| Canceled or expired | (20) | | | 503.05 | |
| Balance at April 30, 2022 | 2,033 | | | $ | 255.38 | |
| | | | |
| Exercisable at April 30, 2022 | 1,400 | | | $ | 188.29 | |
At April 30, 2022, there was approximately $53 million of unrecognized compensation cost related to non-vested stock options with a weighted average vesting period of 2.6 years. We will adjust unrecognized compensation cost for actual forfeitures as they occur.
| | | |
| --- | --- | --- |
| | | |
| 11. Litigation |
Beginning in May 2019, various legal proceedings were filed and certain regulatory inquiries were commenced in connection with our provision and marketing of free online tax preparation programs. We believe that the allegations contained within these legal proceedings are without merit and continue to defend our interests in them. These proceedings included, among others, multiple putative class actions that were consolidated into a single putative class action in the Northern District of California in September 2019 (the “Intuit Free File Litigation”). In August 2020, the Ninth Circuit Court of Appeals ordered that the putative class action claims be resolved through arbitration. In May 2021, the Intuit Free File Litigation was dismissed on a non-class basis after we entered into an agreement that resolved the matter on an individual non-class basis for an immaterial amount, without any admission of wrongdoing.These proceedings also included individual demands for arbitration that were filed beginning in October 2019. On February 23, 2022 and May 23, 2022, we entered into settlement agreements that will resolve all of these pending arbitration claims, without any admission of wrongdoing. The ultimate amount that we are required to pay under these agreements will depend on the number of claimants that provide releases of claims thereunder. During the nine months ended April 30, 2022, we accrued an immaterial amount based on our estimate of the probable payments we could make under these agreements. While we believe our accrual is adequate, the final payments required under these agreements could differ from our recorded estimate.
| | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | |
| | | | |
| | Intuit Q3 Fiscal 2022 Form 10-Q | 26 | |
| string | null | null |
Change in deferrals from customer cash advances, net of revenue recognized | 39 | SEC-NUM |
AGILENT TECHNOLOGIES, INC.NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)
The following table presents the company’s total revenue disaggregated by end markets and by revenue type:
| | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended |
| | July 31, | | July 31, |
| | 2022 | | 2021 | | 2022 | | 2021 |
| | (in millions) |
| Revenue by End Markets | | | | | | | |
| Pharmaceutical and Biopharmaceutical | $ | 643 | | | $ | 576 | | | $ | 1,834 | | | $ | 1,628 | |
| Chemical and Energy | 389 | | | 334 | | | 1,097 | | | 976 | |
| Diagnostics and Clinical | 234 | | | 242 | | | 718 | | | 691 | |
| Food | 151 | | | 143 | | | 446 | | | 449 | |
| Academia and Government | 139 | | | 138 | | | 426 | | | 423 | |
| Environmental and Forensics | 162 | | | 153 | | | 478 | | | 492 | |
| Total | $ | 1,718 | | | $ | 1,586 | | | $ | 4,999 | | | $ | 4,659 | |
| | | | | | | | |
| Revenue by Type | | | | | | | |
| Instrumentation | $ | 737 | | | $ | 640 | | | $ | 2,074 | | | $ | 1,953 | |
| Non-instrumentation and other | 981 | | | 946 | | | 2,925 | | | 2,706 | |
| Total | $ | 1,718 | | | $ | 1,586 | | | $ | 4,999 | | | $ | 4,659 | |
Revenue by region is based on the ship to location of the customer. Revenue by end market is determined by the market indicator of the customer and by customer type. Instrumentation revenue includes sales from instruments, remarketed instruments and third-party products. Non-instrumentation and other revenue include sales from contract and per incident services, our companion diagnostics and our nucleic acid solutions businesses as well as sales from spare parts, consumables, reagents, vacuum pumps, subscriptions, software licenses and associated services.
Contract Balances
Contract Assets
Contract assets (unbilled accounts receivable) primarily relate to the company's right to consideration for work completed but not billed at the reporting date. The unbilled receivables are reclassified to trade receivables when billed to customers. Contract assets are generally classified as current assets and are included in "Accounts receivable, net" in the condensed consolidated balance sheet. The balances of contract assets as of July 31, 2022 and October 31, 2021 were $273 million and $197 million, respectively.
Contract Liabilities
The following table provides information about contract liabilities (deferred revenue) and the significant changes in the balances during the nine months ended July 31, 2022:
| | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | |
| | | Contract Liabilities |
| | | (in millions) |
| | | |
| Ending balance as of October 31, 2021 | | $ | 519 | |
| Net revenue deferred in the period | | 391 | |
| Revenue recognized that was included in the contract liability balance at the beginning of the period | | (336) | |
| Change in deferrals from customer cash advances, net of revenue recognized | | 39 | |
| | | |
| Currency translation and other adjustments | | (25) | |
| Ending balance as of July 31, 2022 | | $ | 588 | |
During the nine months ended July 31, 2021 revenue recognized that was included in the contract liability balance at October 31, 2020 was $322 million.
12
| string | null | null |
Available-for-sale Securities, Debt Maturities, after Five Through Ten Years, Amortized Cost Basis | 43 | SEC-NUM |
Debt SecuritiesOur debt securities consisted of the following (in millions):
| | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | |
| | | Gross Unrealized | EstimatedFair Value |
| | Cost | Gains | Losses |
| April 1, 2022 | | | | |
| Trading securities | $ | 41 | | $ | — | | $ | (1) | | $ | 40 | |
| Available-for-sale securities | 1,933 | | 25 | | (165) | | 1,793 | |
| Total debt securities | $ | 1,974 | | $ | 25 | | $ | (166) | | $ | 1,833 | |
| December 31, 2021 | | | | |
| Trading securities | $ | 39 | | $ | 1 | | $ | — | | $ | 40 | |
| Available-for-sale securities | 1,648 | | 33 | | (132) | | 1,549 | |
| Total debt securities | $ | 1,687 | | $ | 34 | | $ | (132) | | $ | 1,589 | |
The carrying values of our debt securities were included in the following line items in our consolidated balance sheets (in millions):
| | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | |
| | April 1, 2022 | | December 31, 2021 |
| | Trading Securities | Available-for-Sale Securities | | Trading Securities | Available-for-Sale Securities |
| | | | | | |
| Marketable securities | $ | 40 | | $ | 1,542 | | | $ | 40 | | $ | 1,283 | |
| Other noncurrent assets | — | | 251 | | | — | | 266 | |
| Total debt securities | $ | 40 | | $ | 1,793 | | | $ | 40 | | $ | 1,549 | |
The contractual maturities of these available-for-sale debt securities as of April 1, 2022 were as follows (in millions):
| | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | |
| | Cost | Estimated Fair Value | | | |
| Within 1 year | $ | 70 | | $ | 68 | | | | |
| After 1 year through 5 years | 1,649 | | 1,504 | | | | |
| After 5 years through 10 years | 43 | | 57 | | | | |
| After 10 years | 171 | | 164 | | | | |
| Total | $ | 1,933 | | $ | 1,793 | | | | |
The Company expects that actual maturities may differ from the contractual maturities above because borrowers have the right to call or prepay certain obligations.The sale and/or maturity of available-for-sale debt securities resulted in the following realized activity (in millions):
| | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | |
| | | | Three Months Ended |
| | | | | April 1,2022 | April 2,2021 |
| Gross gains | | | | $ | 1 | | $ | 1 | |
| Gross losses | | | | (5) | | (4) | |
| Proceeds | | | | 231 | | 158 | |
Captive Insurance CompaniesIn accordance with local insurance regulations, our consolidated captive insurance companies are required to meet and maintain minimum solvency capital requirements. The Company elected to invest a majority of its solvency capital in a portfolio of marketable equity and debt securities. These securities are included in the disclosures above. The Company uses one of our consolidated captive insurance companies to reinsure group annuity insurance contracts that cover the obligations of certain of our European and Canadian pension plans. This captive’s solvency capital funds included total equity and debt securities of $1,580 million and $1,670 million as of April 1, 2022 and December 31, 2021, respectively, which are classified in the line item other noncurrent assets in our consolidated balance sheets because the assets are not available to satisfy our current obligations.9
| string | null | null |
Unrealized upward adjustment, cumulative | 2 | SEC-NUM |
[Table](#i433d81903e814837b268e57261b357cb_7) [of Contents](#i433d81903e814837b268e57261b357cb_7)The indefinite-lived intangible assets, classified as Level 3 measurements, were valued using the relief-from-royalty method, which includes unobservable inputs, including projected revenues and royalty rates, which ranged from 2% to 8% with a weighted average royalty rate of 7%. For definite-lived intangible assets, classified as Level 3 measurements, we compared the estimated future, net undiscounted cash flows, which included key inputs such as rates of growth and profitability of our business as well as incremental net working capital, to the long-lived asset’s carrying amount. During 2020, we met the criteria to recognize certain smaller businesses within our Retail segment as held-for-sale. As such, we remeasured the disposal groups at fair value, less costs to sell, which is considered a Level 3 measurement and was based on each transaction’s estimated consideration as of the date of close.The full duration and total impact of COVID-19 remains uncertain and it is difficult to predict how the recovery will continue to unfold (in general and versus our expectations) for global economies, the travel industry or our business. Additionally, as the stock of our trivago segment is publicly traded, it is difficult to predict market dynamics and the extent or duration of any stock price declines. As a result, we may continue to record impairment charges in the future due to the potential long-term economic impact and near-term financial impacts of the COVID-19 pandemic.Minority Investments without Readily Determinable Fair Values. As of both December 31, 2021 and 2020, the carrying values of our minority investments without readily determinable fair values totaled $330 million. During 2021, we had no material gains or losses recognized related to these minority investments. During 2020, we recorded $134 million of losses related to a minority investment, which had recent observable and orderly transactions for similar investments, using an option pricing model that utilizes judgmental inputs such as discounts for lack of marketability and estimated exit event timing. During 2019, we recorded $2 million of losses related to the minority investments. As of December 31, 2021, total cumulative adjustments made to the initial cost basis of these investments included $2 million in unrealized upward adjustments and $105 million in unrealized downward adjustments (including impairments).NOTE 4 — Property and Equipment, NetOur property and equipment consists of the following:
| | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | |
| | December 31, |
| | 2021 | | 2020 |
| | (In millions) |
| Capitalized software development | $ | 2,892 | | | $ | 3,374 | |
| Computer equipment | 351 | | | 617 | |
| Furniture and other equipment | 106 | | | 128 | |
| Buildings and leasehold improvements | 1,220 | | | 1,230 | |
| Land | 146 | | | 146 | |
| | 4,715 | | | 5,495 | |
| Less: accumulated depreciation | (2,568) | | | (3,289) | |
| Projects in progress | 33 | | | 51 | |
| Property and equipment, net | $ | 2,180 | | | $ | 2,257 | |
As of December 31, 2021 and 2020, our recorded capitalized software development costs, net of accumulated amortization, which have been placed in service were $895 million and $898 million. For the years ended December 31, 2021, 2020 and 2019, we recorded amortization of capitalized software development costs of $588 million, $593 million and $556 million included in depreciation and amortization expense.As of December 31, 2021, 2020 and 2019, we had $4 million, $9 million and $34 million, respectively, included in accounts payable for the acquisition of property and equipment, which is considered a non-cash investing activity in the consolidated statements of cash flows.NOTE 5 – Leases We have operating leases for office space and data centers. Our leases have remaining lease terms of one year to 16 years, some of which include options to extend the leases for up to ten years, and some of which include options to terminate the leases within one year.Operating lease costs were $119 million, $159 million and $170 million for the years ended December 31, 2021, 2020 and 2019, respectively.F- 23
| string | null | null |
Return on assets held at end of year | 1 | SEC-NUM |
The following table shows how the fair value of the Level 3 assets changed during each of the last two years. There were no transfers of assets between Level 3 and either of the other two levels.
| | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | |
| | | | | | | | Level 3 |
| Balance as of April 30, 2020 | | | | | | | $ | 2 | |
| Return on assets held at end of year | | | | | | | 1 | |
| | | | | | | | |
| | | | | | | | |
| Sales and settlements | | | | | | | (1) | |
| Balance as of April 30, 2021 | | | | | | | 2 | |
| Return on assets held at end of year | | | | | | | — | |
| | | | | | | | |
| | | | | | | | |
| Sales and settlements | | | | | | | — | |
| Balance as of April 30, 2022 | | | | | | | $ | 2 | |
The following table shows how the total fair value of all pension plan assets changed during each of the last two years. (We do not have assets set aside for postretirement medical or life insurance benefits.)
| | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Pension Benefits | | Medical and LifeInsurance Benefits |
| | 2021 | | 2022 | | 2021 | | 2022 |
| Assets at beginning of year | $ | 749 | | | $ | 836 | | | $ | — | | | $ | — | |
| Actual return on assets | 124 | | | (25) | | | — | | | — | |
| Retiree contributions | — | | | — | | | 1 | | | 1 | |
| Company contributions | 16 | | | 12 | | | 3 | | | 3 | |
| Benefits paid | (53) | | | (82) | | | (4) | | | (4) | |
| Assets at end of year | $ | 836 | | | $ | 741 | | | $ | — | | | $ | — | |
We currently expect to contribute $13 to our pension plans and $3 to our postretirement medical and life insurance benefit plans during 2023.Funded status. The funded status of a plan refers to the difference between its assets and its obligations. The following table shows the funded status of our plans.
| | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Pension Benefits | | Medical and LifeInsurance Benefits |
| April 30, | 2021 | | 2022 | | 2021 | | 2022 |
| Assets | $ | 836 | | | $ | 741 | | | $ | — | | | $ | — | |
| Obligations | (1,012) | | | (846) | | | (49) | | | (43) | |
| Funded status | $ | (176) | | | $ | (105) | | | $ | (49) | | | $ | (43) | |
The funded status is recorded on the accompanying consolidated balance sheets as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Pension Benefits | | Medical and LifeInsurance Benefits |
| April 30, | | 2021 | | 2022 | | 2021 | | 2022 |
| Other assets | | $ | 4 | | | $ | 46 | | | $ | — | | | $ | — | |
| Accounts payable and accrued expenses | | (7) | | | (8) | | | (3) | | | (3) | |
| Accrued pension and other postretirement benefits | | (173) | | | (143) | | | (46) | | | (40) | |
| Net liability | | $ | (176) | | | $ | (105) | | | $ | (49) | | | $ | (43) | |
| Accumulated other comprehensive income (loss), before tax: | | | | | | | | |
| Net actuarial gain (loss) | | $ | (298) | | | $ | (201) | | | $ | (9) | | | $ | (3) | |
| Prior service credit (cost) | | (5) | | | (4) | | | 4 | | | 2 | |
| | | $ | (303) | | | $ | (205) | | | $ | (5) | | | $ | (1) | |
68
| string | null | null |
Auditor Firm ID | 1358 | SEC-NUM |
Amcor plcAnnual Report on Form 10-KTable of Contents
| | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | |
| [Part I](#iaaf9a56e00e94423becd0a3b631ec539_13) | | |
| [Item 1.](#iaaf9a56e00e94423becd0a3b631ec539_16) | [Business](#iaaf9a56e00e94423becd0a3b631ec539_16) | [5](#iaaf9a56e00e94423becd0a3b631ec539_16) |
| [Item 1A.](#iaaf9a56e00e94423becd0a3b631ec539_19) | [Risk Factors](#iaaf9a56e00e94423becd0a3b631ec539_19) | [13](#iaaf9a56e00e94423becd0a3b631ec539_19) |
| [Item 1B.](#iaaf9a56e00e94423becd0a3b631ec539_22) | [Unresolved Staff Comments](#iaaf9a56e00e94423becd0a3b631ec539_22) | [24](#iaaf9a56e00e94423becd0a3b631ec539_22) |
| [Item 2.](#iaaf9a56e00e94423becd0a3b631ec539_25) | [Properties](#iaaf9a56e00e94423becd0a3b631ec539_25) | [24](#iaaf9a56e00e94423becd0a3b631ec539_25) |
| [Item 3.](#iaaf9a56e00e94423becd0a3b631ec539_28) | [Legal Proceedings](#iaaf9a56e00e94423becd0a3b631ec539_28) | [24](#iaaf9a56e00e94423becd0a3b631ec539_28) |
| [Item 4.](#iaaf9a56e00e94423becd0a3b631ec539_31) | [Mine Safety Disclosures](#iaaf9a56e00e94423becd0a3b631ec539_31) | [24](#iaaf9a56e00e94423becd0a3b631ec539_31) |
| | | |
| [Part II](#iaaf9a56e00e94423becd0a3b631ec539_34) | | |
| [Item 5.](#iaaf9a56e00e94423becd0a3b631ec539_37) | [Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities](#iaaf9a56e00e94423becd0a3b631ec539_37) | [25](#iaaf9a56e00e94423becd0a3b631ec539_37) |
| Item 6. | Removed and Reserved | |
| [Item 7.](#iaaf9a56e00e94423becd0a3b631ec539_40) | [Management’s Discussion and Analysis of Financial Condition and Results of Operations](#iaaf9a56e00e94423becd0a3b631ec539_40) | [28](#iaaf9a56e00e94423becd0a3b631ec539_40) |
| [Item 7A.](#iaaf9a56e00e94423becd0a3b631ec539_67) | [Quantitative and Qualitative Disclosures About Market Risk](#iaaf9a56e00e94423becd0a3b631ec539_67) | [45](#iaaf9a56e00e94423becd0a3b631ec539_67) |
| [Item 8.](#iaaf9a56e00e94423becd0a3b631ec539_70) | [Financial Statements and Supplementary Data](#iaaf9a56e00e94423becd0a3b631ec539_70) | [47](#iaaf9a56e00e94423becd0a3b631ec539_70) |
| | [Report of Independent Registered Public Accounting Firm (PCAOB ID](#iaaf9a56e00e94423becd0a3b631ec539_73) 1358[)](#iaaf9a56e00e94423becd0a3b631ec539_73) | [47](#iaaf9a56e00e94423becd0a3b631ec539_73) |
| | [Consolidated Statements of Income](#iaaf9a56e00e94423becd0a3b631ec539_76) | [49](#iaaf9a56e00e94423becd0a3b631ec539_76) |
| | [Consolidated Statements of Comprehensive Income](#iaaf9a56e00e94423becd0a3b631ec539_79) | [50](#iaaf9a56e00e94423becd0a3b631ec539_79) |
| | [Consolidated Balance Sheets](#iaaf9a56e00e94423becd0a3b631ec539_82) | [51](#iaaf9a56e00e94423becd0a3b631ec539_82) |
| | [Consolidated Statements of Cash Flows](#iaaf9a56e00e94423becd0a3b631ec539_85) | [52](#iaaf9a56e00e94423becd0a3b631ec539_85) |
| | [Consolidated Statements of Equity](#iaaf9a56e00e94423becd0a3b631ec539_88) | [53](#iaaf9a56e00e94423becd0a3b631ec539_88) |
| | [Notes to Consolidated Financial Statements](#iaaf9a56e00e94423becd0a3b631ec539_91) | [54](#iaaf9a56e00e94423becd0a3b631ec539_91) |
| [Item 9.](#iaaf9a56e00e94423becd0a3b631ec539_163) | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](#iaaf9a56e00e94423becd0a3b631ec539_163) | [107](#iaaf9a56e00e94423becd0a3b631ec539_163) |
| [Item 9A.](#iaaf9a56e00e94423becd0a3b631ec539_166) | [Controls and Procedures](#iaaf9a56e00e94423becd0a3b631ec539_166) | [107](#iaaf9a56e00e94423becd0a3b631ec539_166) |
| [Item 9B.](#iaaf9a56e00e94423becd0a3b631ec539_169) | [Other Information](#iaaf9a56e00e94423becd0a3b631ec539_169) | [107](#iaaf9a56e00e94423becd0a3b631ec539_169) |
| [Item 9C.](#iaaf9a56e00e94423becd0a3b631ec539_1639) | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#iaaf9a56e00e94423becd0a3b631ec539_1639) | [107](#iaaf9a56e00e94423becd0a3b631ec539_1639) |
| | | |
| [Part III](#iaaf9a56e00e94423becd0a3b631ec539_172) | | |
| [Item 10.](#iaaf9a56e00e94423becd0a3b631ec539_175) | [Directors, Executive Officers and Corporate Governance](#iaaf9a56e00e94423becd0a3b631ec539_175) | [108](#iaaf9a56e00e94423becd0a3b631ec539_175) |
| [Item 11.](#iaaf9a56e00e94423becd0a3b631ec539_178) | [Executive Compensation](#iaaf9a56e00e94423becd0a3b631ec539_178) | [109](#iaaf9a56e00e94423becd0a3b631ec539_178) |
| [Item 12.](#iaaf9a56e00e94423becd0a3b631ec539_181) | [Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters](#iaaf9a56e00e94423becd0a3b631ec539_181) | [109](#iaaf9a56e00e94423becd0a3b631ec539_181) |
| [Item 13.](#iaaf9a56e00e94423becd0a3b631ec539_184) | [Certain Relationships and Related Transactions, and Director Independence](#iaaf9a56e00e94423becd0a3b631ec539_184) | [109](#iaaf9a56e00e94423becd0a3b631ec539_184) |
| [Item 14.](#iaaf9a56e00e94423becd0a3b631ec539_187) | [Principal Accountant Fees and Services](#iaaf9a56e00e94423becd0a3b631ec539_187) | [109](#iaaf9a56e00e94423becd0a3b631ec539_187) |
| | | |
| [Part IV](#iaaf9a56e00e94423becd0a3b631ec539_190) | | |
| [Item 15.](#iaaf9a56e00e94423becd0a3b631ec539_193) | [Exhibits and Financial Statement Schedules](#iaaf9a56e00e94423becd0a3b631ec539_193) | [110](#iaaf9a56e00e94423becd0a3b631ec539_193) |
| | [Exhibit Index](#iaaf9a56e00e94423becd0a3b631ec539_193) | [110](#iaaf9a56e00e94423becd0a3b631ec539_193) |
| [Item 16.](#iaaf9a56e00e94423becd0a3b631ec539_196) | [Form 10-K Summary (optional)](#iaaf9a56e00e94423becd0a3b631ec539_196) | [112](#iaaf9a56e00e94423becd0a3b631ec539_196) |
| | [Signatures](#iaaf9a56e00e94423becd0a3b631ec539_199) | [113](#iaaf9a56e00e94423becd0a3b631ec539_199) |
3
| string | null | null |
Class A common stock outstanding (in shares) | 22 | SEC-NUM |
[Table of Contents](#i36695dc5143241f795c32e47bf5f4b3d_7)CBRE GROUP, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)Investments Held in Trust - Special Purpose Acquisition CompanyAs part of the initial public offering of CBRE Acquisition Holdings, Inc., $402.5 million was deposited in an interest-bearing U.S. based trust account (Trust Account). The funds in the Trust Account were invested only in specified U.S. government treasury bills with a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act that invest only in direct U.S. government treasury obligations (collectively “permitted investments”). These funds did not qualify as either cash or restricted cash and prior to the SPAC Merger remained in the Trust Account except for the withdrawal of interest earned on the funds that could have been released to CBRE Acquisition Holdings to pay taxes.The Trust Account was derecognized upon the SPAC Merger. Non-controlling Interest Subject to Possible Redemption - Special Purpose Acquisition CompanyPrior to the SPAC Merger, the company accounted for the non-controlling interest in CBRE Acquisition Holdings as subject to possible redemption in accordance with the guidance in FASB ASC Topic 480 “Distinguishing Liabilities from Equity.” CBRE Acquisition Holdings’ common stock featured certain redemption rights that allowed investors to redeem common stock at $10.00 per share and was therefore considered to be outside of the company’s control and subject to occurrence of uncertain future events. Accordingly, this non-controlling interest subject to possible redemption was presented at redemption value as temporary equity, outside of the stockholders’ equity section in the accompanying consolidated financial statements as of December 31, 2020.As of the closing date of the SPAC Merger, a total of 22 million shares of CBRE Acquisition Holdings’ common stock were redeemed at a total consideration of $220.0 million and CBRE Acquisition Holdings ceased to be a consolidated subsidiary of the company. The related non-controlling interest has been eliminated from the company financial statements. Revision of Prior Period Financial StatementsDuring 2021, we identified an error related to purchase of marketable securities in the SPAC trust account within the previously issued Consolidated Statements of Cash Flows. While the error affects the cash flows from investing and financing activities, the error had no impact on the net increase in cash and restricted cash for the previously reported period.We assessed the materiality of the error on prior period financial statements in accordance with SEC Staff Accounting Bulletin (SAB) Number 99, Materiality, as codified in ASC 250-10, Accounting Changes and Error Corrections. We determined that this error was not material to the December 31, 2020 financial statements. Accordingly, December 31, 2020, as the comparative period in the December 31, 2021 financial statements, has been corrected in the Consolidated Statements of Cash Flows as described below (dollars in thousands):
| | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | |
| | | Year Ended December 31, 2020 |
| | | As Previously Reported | | Adjustments | | As Corrected |
| | | | | | | |
| Net cash used in investing activities | | $ | (341,585) | | | $ | (402,500) | | | $ | (744,085) | |
| | | | | | | |
| Net cash used in financing activities | | $ | (625,256) | | | $ | 402,500 | | | $ | (222,756) | |
79
| string | null | null |
Finance Lease, Liability, Noncurrent | 83 | SEC-NUM |
[Table of Contents](#i3e760ad3c5f94c5892b7ddc949ade806_7)to extend or terminate the lease when it is reasonably certain that the option will be exercised. The lease term is used to determine lease classification as an operating or finance lease and is used to calculate straight-line expense for operating leases.Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. As a practical expedient, lease agreements with lease and non-lease components are accounted for as a single lease component for all asset classes, which are comprised of real estate leases and equipment leases. ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. ROU assets also include prepaid lease payments and exclude lease incentives received. The Company estimates contingent lease incentives when it is probable that the Company is entitled to the incentive at lease commencement. Since the Company’s leases do not typically provide an implicit rate, the Company uses its incremental borrowing rate based upon the information available at commencement date for both real estate and equipment leases. The determination of the incremental borrowing rate requires judgment. The Company determines the incremental borrowing rate using the Company’s current unsecured borrowing rate, adjusted for various factors such as collateralization and term to align with the terms of the lease. The Company elected the short-term lease recognition exemption for all leases that qualify. Therefore, leases with an initial term of 12 months or less are not recorded on the balance sheet; instead, lease payments are recognized as lease expense on a straight-line basis over the lease term.The Company leases certain office space, data centers and equipment. The Company’s leases have remaining terms of 1 to 11 years. Certain leases contain renewal options for varying periods, which are at the Company’s sole discretion. For leases where the Company is reasonably certain to exercise a renewal option, such option periods have been included in the determination of the Company’s ROU assets and lease liabilities. Certain leases require the Company to pay taxes, insurance, maintenance, and other operating expenses associated with the leased asset. Such amounts are not included in the measurement of the lease liability to the extent they are variable in nature. These variable lease costs are recognized as a variable lease expense when incurred. Certain leases include options to purchase the leased asset at the end of the lease term, which is assessed as a part of the Company’s lease classification determination. The depreciable life of the ROU asset and leasehold improvements are limited by the expected lease term unless the Company is reasonably certain of a transfer of title or purchase option.At June 30, 2022, and 2021, the Company had operating lease assets of $46,869 and $55,977 and financing lease assets of $65 and $188, respectively. At June 30, 2022, total operating lease liabilities of $51,452 were comprised of current operating lease liabilities of $10,681 and noncurrent operating lease liabilities of $40,771, and all of the financing lease liabilities of $67 were current financing lease liabilities. At June 30, 2021, total operating lease liabilities of $60,828 were comprised of current operating lease liabilities of $11,460 and noncurrent operating lease liabilities of $49,368, and total financing lease liabilities of $193 were comprised of current financing lease liabilities of $110 and noncurrent financing lease liabilities of $83.Operating lease assets are included within other non-current assets and operating lease liabilities are included with accrued expenses (current portion) and other long-term liabilities (noncurrent portion) in the Company’s consolidated balance sheet. Operating lease assets were recorded net of accumulated amortization of $31,006 and $23,813 as of June 30, 2022, and 2021, respectively. Financing lease assets are included within property and equipment, net and financing lease liabilities are included within notes payable (current portion) and long-term debt (noncurrent portion) in the Company’s consolidated balance sheet. Financing lease assets were recorded net of accumulated amortization of $255 and $153 as of June 30, 2022, and 2021, respectively.Operating lease costs for the fiscal years ended June 30, 2022, 2021, and 2020 were $13,058, $14,676, and $16,029, respectively. Financing lease costs for the fiscal years ended June 30, 2022, 2021, and 2020 were $105, $121, and $41, respectively. Total operating and financing lease costs for the fiscal years ended June 30, 2022, 2021, and 2020 included variable lease costs of approximately $2,333, $3,831, and $4,017, respectively. Operating and financing lease expense are included within cost of services, research and development, and selling, general and administrative expense, dependent upon the nature and use of the ROU asset, in the Company’s consolidated statement of income.For the fiscal years ended June 30, 2022, 2021, and 2020, operating cash flows for payments on operating leases were $13,082, $13,672, and $14,348, respectively, and ROU assets obtained in exchange for operating lease liabilities were $2,407, $4,691, and $4,212, respectively. Financing cash flows for payments on financing leases for the fiscal years ended June 30, 2022, 2021, and 2020 were $109, $117, and $33, respectively.47
| string | null | null |
Business combination fair value adjustment | 6 | SEC-NUM |
Notes to Condensed Consolidated Financial Statements
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Reportable segments financial performance |
| | | Three months ended September 30, | | Nine months ended September 30, |
| ($ in millions) | | 2022 | | 2021 | | 2022 | | 2021 |
| Underwriting income (loss) by segment | | | | | | | | |
| Allstate Protection | | $ | (1,170) | | | $ | (421) | | | $ | (1,749) | | | $ | 1,670 | |
| Run-off Property-Liability | | (122) | | | (113) | | | (127) | | | (118) | |
| Total Property-Liability | | (1,292) | | | (534) | | | (1,876) | | | 1,552 | |
| | | | | | | | | |
| Adjusted net income (loss) by segment, after-tax | | | | | | | | |
| Protection Services | | 35 | | | 45 | | | 131 | | | 150 | |
| Allstate Health and Benefits | | 54 | | | 33 | | | 172 | | | 160 | |
| Corporate and Other | | (104) | | | (95) | | | (322) | | | (330) | |
| | | | | | | | | |
| Reconciling items | | | | | | | | |
| Property-Liability net investment income | | 632 | | | 710 | | | 1,696 | | | 2,314 | |
| Net gains (losses) on investments and derivatives | | (167) | | | 105 | | | (1,167) | | | 818 | |
| Pension and other postretirement remeasurement gains (losses) | | (79) | | | (40) | | | (91) | | | 404 | |
| | | | | | | | | |
| Business combination expenses and amortization of purchased intangibles (1) | | (29) | | | (34) | | | (86) | | | (124) | |
| Business combination fair value adjustment | | — | | | — | | | — | | | 6 | |
| Gain (loss) on disposition of operations | | (5) | | | — | | | 6 | | | — | |
| Income tax benefit (expense) on reconciling items | | 246 | | | (14) | | | 396 | | | (990) | |
| Total reconciling items | | 598 | | | 727 | | | 754 | | | 2,428 | |
| | | | | | | | | |
| Income (loss) from discontinued operations | | — | | | 235 | | | — | | | (3,435) | |
| Income tax benefit from discontinued operations | | — | | | 90 | | | — | | | 163 | |
| Total from discontinued operations | | $ | — | | | $ | 325 | | | $ | — | | | $ | (3,272) | |
| | | | | | | | | |
| Less: Net loss attributable to noncontrolling interest (2) | | (15) | | | (7) | | | (35) | | | (7) | |
| | | | | | | | | |
| Net (loss) income applicable to common shareholders | | $ | (694) | | | $ | 508 | | | $ | (1,106) | | | $ | 695 | |
(1)Excludes amortization of purchased intangibles in Property-Liability, which is included above in underwriting income.(2)Reflects net loss attributable to noncontrolling interest in Property-Liability.Third Quarter 2022 Form 10-Q 11
| string | null | null |
Repaid debt | 400 | SEC-NUM |
[Table of Contents](#i82eec5aa49a24290a07e4a9f99c1e608_7) Senior NotesThe Company has outstanding $17.7 billion of various fixed-rate senior notes, as described above. The indentures governing the Company’s senior notes contain covenants that, among other matters, limit (i) the Company’s ability to consolidate or merge with or into, or convey, transfer or lease all or substantially all of its properties and assets to, another person, (ii) the Company’s and certain of its subsidiaries’ ability to create or assume liens, and (iii) the Company’s and certain of its subsidiaries’ ability to engage in sale and leaseback transactions. The Company may, at its option, redeem the senior notes, in whole or, from time to time, in part, at any time prior to the applicable maturity date. Interest on the Company’s U.S. dollar-denominated senior notes is paid semi-annually, while interest on its Euro- and British Pound-denominated senior notes is paid annually. The interest rate applicable to certain of the senior notes is subject to an increase of up to two percent in the event that the credit rating assigned to such notes is downgraded below investment grade.During the year ended December 31, 2021, the Company used a portion of the net proceeds from the 2021 issuance of commercial paper notes, as described below, to repay the outstanding principal balance of $400 million under its 4.75% senior notes that matured in June 2021. At December 31, 2021, the 3.50% senior notes due in October 2022 were classified in the consolidated balance sheet as long-term and within the debt maturity schedule above as maturing in September 2023, the date that the Company’s revolving credit facility expires, as the Company has the intent to refinance this debt on a long-term basis and the ability to do so under its revolving credit facility.Commercial PaperThe Company initiated an unsecured U.S. dollar commercial paper program (“USCP”) in May 2021 and an unsecured Euro commercial paper program (“ECP”) in November 2021. From time to time, the Company may issue under these programs U.S. dollar commercial paper with maturities of up to 397 days from the date of issuance and Euro commercial paper with maturities of up to 183 days from the date of issuance. Outstanding borrowings under the USCP were $916 million at December 31, 2021, with a weighted average interest rate of 0.295%. Outstanding borrowings under the ECP were $905 million at December 31, 2021, with a weighted average interest rate of (0.420)%. The Company intends to maintain available capacity under its revolving credit facility, as described below, in an amount at least equal to the aggregate outstanding borrowings under its commercial paper programs. Outstanding borrowings under the commercial paper programs are classified in the consolidated balance sheet as long-term and within the debt maturity schedule above as maturing in September 2023, the date that the Company’s revolving credit facility expires, as the Company has the intent to refinance this commercial paper on a long-term basis through the continued issuance of new commercial paper upon maturity, and the Company also has the ability to refinance such commercial paper under its revolving credit facility.During the year ended December 31, 2021, the Company used the net proceeds from the issuance of commercial paper notes to repay outstanding borrowings under its amended and restated revolving credit facility, to repay its 4.75% senior notes that matured in June 2021, and to pay down outstanding borrowings on its term loan facility. Revolving Credit FacilityThe Company maintains an amended and restated revolving credit facility, which matures in September 2023, with aggregate commitments available for $3.5 billion of total capacity. U.S. dollar borrowings under the amended and restated revolving credit facility bear interest at a variable rate based on LIBOR, typically at the overnight or 1-month rates, or a base rate, plus, in each case, a specified margin based on the Company’s long-term debt rating in effect from time to time. Foreign currency borrowings under the amended and restated revolving credit facility bear interest at a variable rate based on a benchmark applicable to the relevant currency, plus, in each case, a specified margin based on our long-term debt rating in effect from time to time. The variable interest rate on the revolving credit facility borrowings was 1.16% at December 31, 2021. There are no significant commitment fees and no compensating balance requirements. The amended and restated revolving credit facility contains various restrictions and covenants that require the Company, among other things, to (i) limit its consolidated indebtedness as of the end of each fiscal quarter to no more than three and one-half times the Company’s consolidated net earnings before interest, taxes, depreciation, amortization, non-cash charges and expenses and certain other adjustments (“EBITDA”) during the period of four fiscal quarters then ended, subject to certain exceptions, and (ii) maintain EBITDA of at least three times its consolidated interest expense as of the end of each fiscal quarter for the period of four fiscal quarters then ended. The Company was in compliance with all financial debt covenants during 2021.Foreign Lines of Credit and Other ArrangementsThe Company maintains certain short-term lines of credit with foreign banks and alliance partners primarily to fund settlement activity. These arrangements are primarily associated with international operations and are in various functional currencies, the most significant of which is the Argentine peso. The Company had amounts outstanding on these lines of credit totaling $240 79
| string | null | null |
Total estimated amortization of finite-lived intangible assets for 2025 | 2.2 | SEC-NUM |
Other intangible assetsOther intangible assets consisted of the following (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | December 31, |
| | 2021 | | 2020 |
| | Grosscarryingamounts | | Accumulatedamortization | | Other intangibleassets, net | | Grosscarryingamounts | | Accumulatedamortization | | Other intangibleassets, net |
| Finite-lived intangible assets: | | | | | | | | | | | |
| Developed-product-technology rights | $ | 25,561 | | | $ | (12,769) | | | $ | 12,792 | | | $ | 25,591 | | | $ | (10,564) | | | $ | 15,027 | |
| Licensing rights | 3,807 | | | (2,973) | | | 834 | | | 3,743 | | | (2,791) | | | 952 | |
| Marketing-related rights | 1,354 | | | (1,112) | | | 242 | | | 1,367 | | | (1,041) | | | 326 | |
| R&D technology rights | 1,377 | | | (1,133) | | | 244 | | | 1,317 | | | (1,065) | | | 252 | |
| Total finite-lived intangible assets | 32,099 | | | (17,987) | | | 14,112 | | | 32,018 | | | (15,461) | | | 16,557 | |
| Indefinite-lived intangible assets: | | | | | | | | | | | |
| IPR&D | 1,070 | | | — | | | 1,070 | | | 30 | | | — | | | 30 | |
| Total other intangible assets | $ | 33,169 | | | $ | (17,987) | | | $ | 15,182 | | | $ | 32,048 | | | $ | (15,461) | | | $ | 16,587 | |
Developed-product-technology rights consists of rights related to marketed products acquired in acquisitions. Licensing rights consists primarily of contractual rights acquired in acquisitions to receive future milestone, royalty and profit-sharing payments; capitalized payments to third parties for milestones related to regulatory approvals to commercialize products; and up-front payments associated with royalty obligations for marketed products. Marketing-related rights consists primarily of rights related to the sale and distribution of marketed products. R&D technology rights pertains to technologies used in R&D that have alternative future uses. IPR&D consists of R&D projects acquired in a business combination that are not complete at the time of acquisition due to remaining technological risks and/or lack of receipt of required regulatory approvals. All IPR&D projects have major risks and uncertainties associated with the timely and successful completion of the development and commercialization of product candidates, including our ability to confirm safety and efficacy based on data from clinical trials, our ability to obtain necessary regulatory approvals and our ability to successfully complete these tasks within budgeted costs. We are not permitted to market a human therapeutic without obtaining regulatory approvals, and such approvals require the completion of clinical trials that demonstrate that a product candidate is safe and effective. In addition, the availability and extent of coverage and reimbursement from third-party payers, including government healthcare programs and private insurance plans as well as competitive product launches, affect the revenues a product can generate. Consequently, the eventual realized values, if any, of acquired IPR&D projects may vary from their estimated fair values. We review IPR&D projects for impairment annually, whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable and upon the establishment of technological feasibility or regulatory approval.During the year ended December 31, 2021, we acquired certain finite-lived and indefinite-lived intangible assets as a result of the Teneobio acquisition, including IPR&D of $1.1 billion, R&D technology rights of $94 million and licensing rights of $41 million. See Note 2, Acquisitions.During the years ended December 31, 2021, 2020 and 2019, we recognized amortization associated with our finite-lived intangible assets of $2.6 billion, $2.8 billion and $1.4 billion, respectively. Amortization of intangible assets is included primarily in Cost of sales in the Consolidated Statements of Income. The total estimated amortization for our finite-lived intangible assets for the years ending December 31, 2022, 2023, 2024, 2025 and 2026, are $2.5 billion, $2.5 billion, $2.4 billion, $2.2 billion and $1.8 billion, respectively. F-30
| string | null | null |
Unrealized gain on investments | 189 | SEC-NUM |
COSTAR GROUP, INC.CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(in thousands)
| | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | |
| | | Year Ended December 31, |
| | | 2021 | | 2020 | | 2019 |
| Net income | | $ | 292,564 | | | $ | 227,128 | | | $ | 314,963 | |
| Other comprehensive (loss) income, net of tax | | | | | | |
| Foreign currency translation adjustment | | (4,869) | | | 6,966 | | | 3,103 | |
| Unrealized gain on investments | | — | | | 189 | | | — | |
| Reclassification adjustment for realized loss on investments included in net income | | — | | | 541 | | | — | |
| Total other comprehensive (loss) income | | (4,869) | | | 7,696 | | | 3,103 | |
| Total comprehensive income | | $ | 287,695 | | | $ | 234,824 | | | $ | 318,066 | |
See accompanying notes.
F-7
| string | null | null |
Intangible Assets, Gross (Excluding Goodwill) | 218,000 | SEC-NUM |
9.GOODWILL AND INTANGIBLE ASSETSGoodwillWe test goodwill for impairment annually as of December 1, or whenever events or circumstances indicate that the carrying value may not be recoverable. Goodwill is tested for impairment at the reporting unit level, which are determined in accordance with the provisions of ASC 350, Intangibles – Goodwill and Other. The goodwill acquired as part of the Edmunds acquisition was allocated to two of our reporting units – CarMax Sales Operations and Edmunds – with carrying values of $98.9 million and $42.4 million, respectively. No impairment was recognized in fiscal 2022 or fiscal 2021.
Intangibles
| | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | |
| | As of February 28, 2022 |
| | Gross Carrying | Accumulated | Net |
| (In thousands) | Amount | Amortization | Amount |
| Intangible assets not subject to amortization: | | | |
| Trade name | $ | 31,900 | | $ | — | | $ | 31,900 | |
| | | | |
| Intangible assets subject to amortization: | | | |
| Internally developed software | 52,900 | | (5,668) | | 47,232 | |
| Customer relationships | 133,200 | | (5,876) | | 127,324 | |
| Total intangible assets | $ | 218,000 | | $ | (11,544) | | $ | 206,456 | |
The intangible assets above relate to the acquisition of Edmunds on June 1, 2021 (see Note 2 for more information). We had no intangible assets as of February 28, 2021.
Amortization expense of intangible assets was $11.5 million in fiscal 2022. No amortization expense was recorded in fiscal 2021.
We estimate that amortization expense related to intangible assets will be $15.4 million in each of the next five fiscal years.
10.CANCELLATION RESERVESWe recognize revenue for EPP products, on a net basis, at the time of sale. We also record a reserve, or refund liability, for estimated contract cancellations. Cancellations of these services may result from early termination by the customer, or default or prepayment on the finance contract. The reserve for cancellations is evaluated for each product and is based on forecasted forward cancellation curves utilizing historical experience, recent trends and credit mix of the customer base. Cancellation Reserves
| | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | |
| | As of February 28 |
| (In millions) | 2022 | | 2021 |
| Balance as of beginning of year | $ | 124.5 | | | $ | 117.9 | |
| Cancellations | (94.7) | | | (65.6) | |
| Provision for future cancellations | 114.9 | | | 72.2 | |
| Balance as of end of year | $ | 144.7 | | | $ | 124.5 | |
The current portion of estimated cancellation reserves is recognized as a component of accrued expenses and other current liabilities with the remaining amount recognized in other liabilities. As of February 28, 2022 and February 28, 2021, the current portion of cancellation reserves was $78.7 million and $58.7 million, respectively.
68
| string | null | null |
Costs of oil and gas properties acquisition | 555 | SEC-NUM |
Costs to develop proved reserves, including the costs of all development wells and related equipment used in the production of crude oil and natural gas, are capitalized. Depreciation of the cost of proved oil and gas properties is calculated using the unit-of-production (UOP) method. The UOP calculation multiplies the percentage of estimated proved reserves produced each quarter by the carrying value of associated proved oil and gas properties. The reserve base used to calculate depreciation for leasehold acquisition costs and the cost to acquire proved properties is the sum of proved developed reserves and proved undeveloped reserves. The reserve base used to calculate the depreciation for capitalized well costs is the sum of proved developed reserves only. Estimated future dismantlement, restoration and abandonment costs, net of salvage values, are included in the depreciable cost. Oil and gas properties are grouped for depreciation in accordance with ASC 932 “Extractive Activities—Oil and Gas.” The basis for grouping is a reasonable aggregation of properties with a common geological structural feature or stratigraphic condition, such as a reservoir or field. When circumstances indicate that the carrying value of proved oil and gas properties may not be recoverable, the Company compares unamortized capitalized costs to the expected undiscounted pre-tax future cash flows for the associated assets grouped at the lowest level for which identifiable cash flows are independent of cash flows of other assets. If the expected undiscounted pre-tax future cash flows, based on the Company’s estimate of future crude oil and natural gas prices, operating costs, anticipated production from proved reserves and other relevant data, are lower than the unamortized capitalized cost, the capitalized cost is reduced to fair value. Fair value is generally estimated using the income approach described in ASC 820. The expected future cash flows used for impairment reviews and related fair value calculations are typically based on judgmental assessments, a Level 3 fair value measurement. Unproved leasehold impairments are typically recorded as a component of “Exploration” expense in the Company’s statement of consolidated operations. Gains and losses on divestitures of the Company’s oil and gas properties are recognized in the statement of consolidated operations upon closing of the transaction. Refer to [Note 2—Acquisitions and Divestitures](#i28a24ff9302249c2abf373774f12d90c_49) for more detail. Gathering, Processing, and Transmission (GPT) Facilities GPT facilities are depreciated on a straight-line basis over the estimated useful lives of the assets. The estimation of useful life takes into consideration anticipated production lives from the fields serviced by the GPT assets, whether APA-operated or third party-operated, as well as potential development plans by the Company for undeveloped acreage within, or close to, those fields. The Company assesses the carrying amount of its GPT facilities whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the carrying amount of these facilities is more than the sum of the undiscounted cash flows, an impairment loss is recognized for the excess of the carrying value over its fair value. 2. ACQUISITIONS AND DIVESTITURES2022 ActivityIn July 2022, the Company completed the acquisition of oil and gas assets in the Delaware Basin for a purchase price of $505 million. The transaction closed on July 29, 2022 for a total cost of $555 million, after including post-effective date adjustments to date. The acquisition was effective April 1, 2022, and was funded primarily from borrowings on the Company’s revolving credit facility. A deposit of $51 million was paid during the second quarter in association with this transaction.During the second quarter of 2022, the Company completed leasehold and property acquisitions, primarily in the Permian Basin, for total cash consideration of $26 million. During the second quarter of 2022, the Company also completed the sale of non-core assets and leasehold in multiple transactions for total cash proceeds of $7 million, recognizing a gain of approximately $1 million upon closing of these transactions.During the first quarter of 2022, the Company completed a previously announced transaction to sell certain non-core mineral rights in the Delaware Basin. The Company received total cash proceeds of approximately $736 million after certain post-closing adjustments and recognized an associated gain of approximately $563 million. The Company also completed the sale of other non-core assets and leasehold in multiple transactions for total cash proceeds of $8 million. The Company recognized a gain of approximately $1 million upon closing of these transactions during the first quarter of 2022.10
| string | null | null |
Cash flow hedges expected to be reclassified within 12 months | 614 | SEC-NUM |
Cash Flow HedgesCitigroup hedges the variability of forecasted cash flows due to changes in contractually specified interest rates associated with floating-rate assets/liabilities and other forecasted transactions. Variable cash flows from those liabilities are synthetically converted to fixed-rate cash flows by entering into receive-variable, pay-fixed interest rate swaps and receive-variable, pay-fixed forward-starting interest rate swaps. Variable cash flows associated with certain assets are synthetically converted to fixed-rate cash flows by entering into receive-fixed, pay-variable interest rate swaps. These cash flow hedging relationships use either regression analysis or dollar-offset ratio analysis to assess whether the hedging relationships are highly effective at inception and on an ongoing basis.
Citigroup hedges the variability from changes in a contractually specified rate and recognizes the entire change in fair value of the cash flow hedging instruments in AOCI. The full change in the value of the hedging instrument is required to be recognized in AOCI, and then recognized in earnings in the same period that the cash flows impact earnings. The pretax change in AOCI from cash flow hedges is presented below:
| | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | |
| In millions of dollars | 2021 | 2020 | 2019 | | |
| Amount of gain (loss) recognized in AOCI on derivatives | | | | | | |
| Interest rate contracts | $ | (847) | | $ | 2,670 | | | $ | 746 | | | |
| Foreign exchange contracts | (51) | | (15) | | | (17) | | | |
| Total gain (loss) recognized in AOCI | $ | (898) | | $ | 2,655 | | | $ | 729 | | | |
| | Other revenue | Net interest income | Other revenue | Net interest income | Other revenue | Net interest income | | |
| Amount of gain (loss) reclassified from AOCI to earnings(1) | | | | | | | | |
| Interest rate contracts | $ | — | | $ | 1,075 | | $ | — | | $ | 734 | | $ | — | | $ | (384) | | | |
| Foreign exchange contracts | (4) | | — | | (4) | | — | | (7) | | — | | | |
| Total gain (loss) reclassified from AOCI into earnings | $ | (4) | | $ | 1,075 | | $ | (4) | | $ | 734 | | $ | (7) | | $ | (384) | | | |
| Net pretax change in cash flow hedges included within AOCI | | $ | (1,969) | | | $ | 1,925 | | | $ | 1,120 | | | |
(1)All amounts reclassified into earnings for interest rate contracts are included in Interest revenue/Interest expense (Net interest income). For all other hedges, the amounts reclassified to earnings are included primarily in Other revenue and Net interest income in the Consolidated Statement of Income.
For cash flow hedges, the entire change in the fair value of the hedging derivative is recognized in AOCI and then reclassified to earnings in the same period that the forecasted hedged cash flows impact earnings. The net gain (loss) associated with cash flow hedges expected to be reclassified from AOCI within 12 months of December 31, 2021 is approximately $614 million. The maximum length of time over which forecasted cash flows are hedged is 10 years.The after-tax impact of cash flow hedges on AOCI is shown in Note 19 to the Consolidated Financial Statements.256
| string | null | null |
Supplementary leverage ratio, well capitalized minimum | 6.0 | SEC-NUM |
18. REGULATORY CAPITAL Citigroup is subject to risk-based capital and leverage standards issued by the Federal Reserve Board, which constitute the U.S. Basel III rules. Citi’s U.S.-insured depository institution subsidiaries, including Citibank, are subject to similar standards issued by their respective primary bank regulatory agencies. These standards are used to evaluate capital adequacy and include the required minimums shown in the following table. The regulatory agencies are required by law to take specific, prompt corrective actions with respect to institutions that do not meet minimum capital standards. The following table sets forth for Citigroup and Citibank the regulatory capital tiers, total risk-weighted assets, quarterly adjusted average total assets, Total Leverage Exposure, risk-based capital ratios and leverage ratios:
| | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | |
| In millions of dollars, except ratios | Statedminimum | Citigroup(4) | Citibank(4) |
| Well-capitalizedminimum | December 31, 2021 | December 31, 2020 | Well-capitalizedminimum | December 31, 2021 | December 31, 2020 |
| Common Equity Tier 1 Capital | | | $ | 149,305 | | $ | 147,274 | | | $ | 148,548 | | $ | 142,854 | |
| Tier 1 Capital | | | 169,568 | | 167,053 | | | 150,679 | | 144,962 | |
| Total Capital (Tier 1 Capital + Tier 2 Capital)—Standardized Approach | | | 203,838 | | 205,002 | | | 175,427 | | 169,449 | |
| Total Capital (Tier 1 Capital + Tier 2 Capital)—Advanced Approaches | | | 194,006 | | 196,051 | | | 166,921 | | 161,447 | |
| Total risk-weighted assets—Standardized Approach | | | 1,219,175 | | 1,242,381 | | | 1,066,015 | | 1,054,056 | |
| Total risk-weighted assets—Advanced Approaches | | | 1,209,374 | | 1,278,977 | | | 1,017,774 | | 1,047,088 | |
| Quarterly adjusted average total assets(1) | | | 2,351,434 | | 2,265,615 | | | 1,716,596 | | 1,667,105 | |
| Total Leverage Exposure(2) | | | 2,957,764 | | 2,391,033 | | | 2,236,839 | | 2,172,052 | |
| Common Equity Tier 1 Capital ratio(3) | 4.5 | % | N/A | 12.25 | % | 11.51 | % | 6.5 | % | 13.93 | % | 13.55 | % |
| Tier 1 Capital ratio(3) | 6.0 | | 6.0 | % | 13.91 | | 13.06 | | 8.0 | | 14.13 | | 13.75 | |
| Total Capital ratio(3) | 8.0 | | 10.0 | | 16.04 | | 15.33 | | 10.0 | | 16.40 | | 15.42 | |
| Tier 1 Leverage ratio | 4.0 | | N/A | 7.21 | | 7.37 | | 5.0 | | 8.78 | | 8.70 | |
| Supplementary Leverage ratio | 3.0 | | N/A | 5.73 | | 6.99 | | 6.0 | | 6.74 | | 6.67 | |
(1)Tier 1 Leverage ratio denominator. (2)Supplementary Leverage ratio denominator. (3)Citigroup’s reportable Common Equity Tier 1 Capital and Tier 1 Capital ratios were the lower derived under the Basel III Standardized Approach and the reportable Total Capital ratio was the lower derived under the Basel III Advanced Approaches framework as of December 31, 2021, whereas Citigroup’s reportable Common Equity Tier 1 Capital, Tier 1 Capital and Total Capital ratios as of December 31, 2020 were the lower derived under the Basel III Advanced Approaches framework. As of December 31, 2021 and 2020, Citibank’s reportable Common Equity Tier 1 Capital and Tier 1 Capital ratios were the lower derived under the Basel III Standardized Approach, whereas the Total Capital ratios were the lower derived under the Basel III Advanced Approaches framework.(4)Certain of the above prior-period amounts have been revised to conform with enhancements made in the current period. N/A Not applicable
As indicated in the table above, Citigroup and Citibank were “well capitalized” under the current federal bank regulatory agency definitions as of December 31, 2021 and 2020.
Banking Subsidiaries—Constraints on DividendsThere are various legal limitations on the ability of Citigroup’s subsidiary depository institutions to extend credit, pay dividends or otherwise supply funds to Citigroup and its non-bank subsidiaries. The approval of the Office of the Comptroller of the Currency is required if total dividends declared in any calendar year were to exceed amounts specified by the agency’s regulations. In determining the dividends, each subsidiary depository institution must also consider its effect on applicable risk-based capital and leverage ratio requirements, as well as policy statements of the federal bank regulatory agencies that indicate that banking organizations should generally pay dividends out of current operating earnings. Citigroup received $6.2 billion and $2.3 billion in dividends from Citibank during 2021 and 2020, respectively.228
| string | null | null |
Downward valuation adjustment | 0.8 | SEC-NUM |
In 2021 and 2020, as a result of third-party market observable transactions that were of the same issuer and determined to be similar, the Company marked certain of its equity investments accounted for under the measurement alternative to fair value. The carrying value of investments under the measurement alternative marked to fair value on a non-recurring basis as of December 31, 2021 and 2020 was $41.8 million and $14.1 million, respectively. Given the significant unobservable inputs involved in valuation of these investments, they are classified in Level 3 of the fair value hierarchy. Generally, these valuations utilize the market approach, or an option pricing model backsolve method, which is a valuation approach that can be used to determine the value of common shares for companies with complex capital structures in which there have not been any recent transactions involving common shares. Inputs include capitalization tables, investment past and future performance projections, time to exit, discount rate and volatility based upon an appropriate industry group. For the year ended December 31, 2021, the Company recorded fair value increases of $25.1 million related to four market observable transactions of four investments and a fair value decrease of $0.8 million related to one market observable transaction. For the year ended December 31, 2020, the Company recorded fair value increases of $10.5 million related to two market observable transactions for one investment.In 2021 and 2020, as a result of a qualitative analysis indicating an impairment existed, the Company performed a quantitative analysis utilizing a probability weighted scenario model and determined certain investments were impaired. Model inputs include capitalization tables, investment past and future company performance projections, and discount rate. Based upon model outputs, impairments of $1.0 million and $17.1 million were recorded for the years ended December 31, 2021 and 2020, respectively. Refer to Note 15 for the results of the 2021 goodwill impairment testing.Fair Value of Financial Instruments Disclosures The financial instruments guidance requires disclosure of fair value information about financial instruments, for which it is practicable to estimate such fair value. Therefore, it requires fair value disclosure for financial instruments that are not recognized or are not carried at fair value in the consolidated balance sheets. However, this guidance excludes certain financial instruments, including those related to insurance contracts and those accounted for under the equity method (such as partnerships).For the financial instruments included within the following financial assets and financial liabilities, the carrying value in the consolidated balance sheets equals or approximates fair value. Please refer to the Fair Values Inputs and Valuation Techniques for Financial Assets and Liabilities Disclosures section above for additional information on the financial instruments included within the following financial assets and financial liabilities and the methods and assumptions used to estimate fair value:•Cash and cash equivalents;•Fixed maturity securities;•Equity securities;•Short-term investments;•Other investments;•Other assets;•Assets held in separate accounts;•Other liabilities; and•Liabilities related to separate accounts.In estimating the fair value of the financial instruments that are not recognized or are not carried at fair value in the consolidated balance sheets, the Company used the following methods and assumptions: Commercial mortgage loans on real estate: The fair value of commercial mortgage loans on real estate utilizes a third-party matrix pricing model. For fixed rate loans, the matrix process uses a yield buildup approach to create a pricing yield, with components for base yield, credit quality spread, property type spread, and a weighted average life spread. Floating rate loans are priced with a target quality spread over the swap curve. A dollar price for each loan is derived from the pricing yield or spread by a discounted cash flow methodology. Other investments: Other investments include low income housing tax credits, business debentures, and credit tenant loans which are recorded at cost or amortized cost, as well as policy loans. The carrying value reported for these investments approximates fair value. Other assets: The carrying value of dealer loans approximates fair value. F-43
| string | null | null |
Increase (decrease) in gross unrealized losses | 13.5 | SEC-NUM |
[Table of Contents](#ic55317410763413da1d4be4008f977bd_658)Globe Life Inc.Notes to Consolidated Financial Statements(Dollar amounts in thousands, except per share data)Analysis of Gross Unrealized Investment Losses
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | At December 31, 2020 |
| | Less than Twelve Months | | Twelve Months or Longer | | Total |
| | FairValue | | UnrealizedLoss | | FairValue | | UnrealizedLoss | | FairValue | | UnrealizedLoss |
| Fixed maturities available for sale: | | | | | | | | | | | |
| Investment grade securities: | | | | | | | | | | | |
| U.S. Government direct, guaranteed, and government-sponsored enterprises | $ | 2,006 | | | $ | (43) | | | $ | — | | | $ | — | | | $ | 2,006 | | | $ | (43) | |
| States, municipalities and political subdivisions | 32,910 | | | (315) | | | — | | | — | | | 32,910 | | | (315) | |
| Foreign governments | 19,532 | | | (898) | | | — | | | — | | | 19,532 | | | (898) | |
| Corporates, by sector: | | | | | | | | | | | |
| Financial | 117,762 | | | (2,564) | | | 6,333 | | | (2,168) | | | 124,095 | | | (4,732) | |
| Utilities | 2,726 | | | (108) | | | — | | | — | | | 2,726 | | | (108) | |
| Energy | 1,692 | | | (8) | | | 14,871 | | | (106) | | | 16,563 | | | (114) | |
| Other corporate sectors | 21,882 | | | (720) | | | — | | | — | | | 21,882 | | | (720) | |
| Total corporates | 144,062 | | | (3,400) | | | 21,204 | | | (2,274) | | | 165,266 | | | (5,674) | |
| Collateralized debt obligations | — | | | — | | | — | | | — | | | — | | | — | |
| Other asset-backed securities | 28,864 | | | (1,051) | | | 5 | | | — | | | 28,869 | | | (1,051) | |
| Total investment grade securities | 227,374 | | | (5,707) | | | 21,209 | | | (2,274) | | | 248,583 | | | (7,981) | |
| | | | | | | | | | | | |
| Below investment grade securities: | | | | | | | | | | | |
| States, municipalities and political subdivisions | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | |
| Corporates, by sector: | | | | | | | | | | | |
| Financial | 6,822 | | | (36) | | | 115,093 | | | (19,453) | | | 121,915 | | | (19,489) | |
| Utilities | — | | | — | | | — | | | — | | | — | | | — | |
| Energy | 18,432 | | | (757) | | | 38,720 | | | (2,212) | | | 57,152 | | | (2,969) | |
| Other corporate sectors | 25,711 | | | (3,588) | | | 19,516 | | | (1,910) | | | 45,227 | | | (5,498) | |
| Total corporates | 50,965 | | | (4,381) | | | 173,329 | | | (23,575) | | | 224,294 | | | (27,956) | |
| Collateralized debt obligations | — | | | — | | | 11,131 | | | (8,869) | | | 11,131 | | | (8,869) | |
| Other asset-backed securities | — | | | — | | | 11,223 | | | (2,727) | | | 11,223 | | | (2,727) | |
| Total below investment grade securities | 50,965 | | | (4,381) | | | 195,683 | | | (35,171) | | | 246,648 | | | (39,552) | |
| Total fixed maturities | $ | 278,339 | | | $ | (10,088) | | | $ | 216,892 | | | $ | (37,445) | | | $ | 495,231 | | | $ | (47,533) | |
Gross unrealized losses decreased from $47.5 million at December 31, 2020, to $34.0 million at December 31, 2021, a decrease of $13.5 million. The decrease in the gross unrealized losses from the prior year was primarily attributable to the decrease in market interest rates.
85 GL 2021 FORM 10-K
| string | null | null |
Unsecured Loan, Unused Borrowing Capacity | 5,000 | SEC-NUM |
[Table of Contents](#i3e760ad3c5f94c5892b7ddc949ade806_7)leverage ratio. The credit facility is guaranteed by certain subsidiaries of the Company and is subject to various financial covenants that require the Company to maintain certain financial ratios as defined in the credit facility agreement. As of June 30, 2022, the Company was in compliance with all such covenants. The revolving credit facility terminates February 10, 2025. There was $115,000 outstanding balance under this credit facility at June 30, 2022 and $100,000 outstanding balance under this credit facility at June 30, 2021. Other lines of creditThe Company has an unsecured bank credit line which provides for funding of up to $5,000 and bears interest at the prime rate less 1%. The credit line was renewed in May 2019 and modified in March 2021 to extend the expiration to April 30, 2023. There was no balance outstanding at June 30, 2022 or 2021. InterestThe Company paid interest of $1,788, $852, and $475 during the fiscal years ended June 30, 2022, 2021, and 2020, respectively.
NOTE 8. INCOME TAXESThe provision for income taxes consists of the following:
| | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | |
| | Year Ended June 30, |
| | 2022 | | 2021 | | 2020 |
| Current: | | | | | |
| Federal | $ | 59,390 | | | $ | 55,598 | | | $ | 46,137 | |
| State | 18,089 | | | 13,897 | | | 13,690 | |
| Deferred: | | | | | |
| Federal | 24,391 | | | 14,401 | | | 21,130 | |
| State | 7,481 | | | 2,360 | | | 3,451 | |
| | $ | 109,351 | | | $ | 86,256 | | | $ | 84,408 | |
The tax effects of temporary differences related to deferred taxes shown on the balance sheets were:
| | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | |
| | June 30, |
| | 2022 | | 2021 |
| Deferred tax assets: | | | |
| Contract and service revenues | $ | 15,340 | | | $ | 13,428 | |
| Expense reserves and accruals (bad debts, compensation, and payroll tax) | 15,382 | | | 17,566 | |
| Leasing liabilities | 12,868 | | | 15,182 | |
| Net operating loss and tax credit carryforwards | 2,107 | | | 3,242 | |
| Other, net | 3,311 | | | 2,634 | |
| Total gross deferred tax assets | 49,008 | | | 52,052 | |
| Valuation allowance | (200) | | | (270) | |
| Net deferred tax assets | 48,808 | | | 51,782 | |
| | | | |
| Deferred tax liabilities: | | | |
| Accelerated tax depreciation | (33,390) | | | (37,066) | |
| Accelerated tax amortization | (192,187) | | | (175,804) | |
| Contract and service costs | (104,139) | | | (85,696) | |
| Leasing right-of-use assets | (11,722) | | | (13,974) | |
| Total gross deferred liabilities | (341,438) | | | (312,540) | |
| | | | |
| Net deferred tax liability | $ | (292,630) | | | $ | (260,758) | |
51
| string | null | null |
Measurement period adjustment, increase in other long-term liabilities | 21 | SEC-NUM |
[Table of Contents](#i82eec5aa49a24290a07e4a9f99c1e608_7) Acquisition of First Data On July 29, 2019, the Company acquired First Data, a global leader in commerce-enabling technology and solutions for merchants, financial institutions and card issuers, by acquiring 100% of the First Data stock that was issued and outstanding as of the date of acquisition. The acquisition, included within the Acceptance and Payments segments, increases the Company’s footprint as a global payments and financial technology provider by expanding the portfolio of services provided to financial institutions, corporate and merchant clients and consumers. As a result of the acquisition, First Data stockholders received 286 million shares of common stock of Fiserv, Inc., at an exchange ratio of 0.303 shares of Fiserv, Inc. for each share of First Data common stock, with cash paid in lieu of fractional shares. The Company also converted 15 million outstanding First Data equity awards into corresponding equity awards relating to common stock of Fiserv, Inc. in accordance with the exchange ratio as described in further detail within Note 16. In addition, concurrent with the closing of the acquisition, the Company made a cash payment of $16.4 billion to repay existing First Data debt. The Company funded the transaction-related expenses and the repayment of First Data debt through a combination of available cash on-hand and proceeds from debt issuances.The total purchase price paid for First Data was as follows:
| | | | | | |
| --- | --- | --- | --- | --- | --- |
| | | | | | |
| | |
| (In millions) | |
| Fair value of stock exchanged for shares of Fiserv, Inc. (1) | $ | 29,293 | |
| Repayment of First Data debt | 16,414 | |
| Fair value of vested portion of First Data stock awards exchanged for Fiserv, Inc. awards (2) | 768 | |
| Total purchase price | $ | 46,475 | |
| | |
(1)The fair value of the 286 million shares of the Company’s common stock issued as of the acquisition date was determined based on a per share price of $102.30, which was the closing price of the Company’s common stock on July 26, 2019, the last trading day before the acquisition closed the morning of July 29, 2019. This includes a nominal amount of cash paid in lieu of fractional shares.(2)Represents the portion of the fair value of the replacement awards related to services provided prior to the acquisition. The remaining portion of the fair value is associated with future service and will be recognized as expense over the future service period. See Note 16 for additional information.The excess of the purchase price over the fair value of the net assets acquired was allocated to goodwill, none of which is deductible for tax purposes. Goodwill is primarily attributed to synergies from future expected economic benefits, including enhanced revenue growth from expanded capabilities and geographic presence as well as substantial cost savings from duplicative overhead, streamlined operations and enhanced operational efficiency.The assets acquired and liabilities assumed of First Data have been measured at estimated fair value as of the acquisition date. In 2020, through the measurement period ended July 29, 2020, the Company identified and recorded measurement period adjustments to the preliminary purchase price allocation, which were the result of additional analysis performed and information identified based on facts and circumstances that existed as of the acquisition date. These measurement period adjustments resulted in an increase to goodwill of $304 million. The offsetting amounts to the change in goodwill were primarily related to customer relationship intangible assets, noncontrolling interests, property and equipment, payables and accrued expenses including legal contingency reserves, and deferred income taxes. The Company recorded a measurement period adjustment of $155 million to reduce the fair value of customer relationship intangible assets as a result of refinements to attrition rates. A measurement period adjustment of $126 million was recorded to reduce the fair value of noncontrolling interests based on changes to the fair value of the underlying customer relationship intangible assets and the incorporation of additional facts and circumstances that existed as of the acquisition date. A measurement period adjustment of $25 million was recorded to reduce the fair value of property and equipment to the estimated fair value of certain real property acquired. Measurement period adjustments were recorded to increase payables and accrued expenses by $37 million, reduce investments in unconsolidated affiliates by $23 million, and increase other long-term liabilities by $21 million. The remaining $169 million of adjustments were primarily comprised of deferred tax adjustments related to the measurement period adjustments. Such measurement period adjustments did not have a material impact on the consolidated statements of income. The allocation of purchase price recorded for First Data was finalized in the third quarter of 2020 as follows:
| | | | | | |
| --- | --- | --- | --- | --- | --- |
| | | | | | |
| | |
| (In millions) | |
| Assets acquired (1) | |
| Cash and cash equivalents | $ | 310 | |
| Trade accounts receivable | 1,747 | |
| Prepaid expenses and other current assets | 1,047 | |
| Settlement assets (2) | 10,398 | |
| Property and equipment | 1,156 | |
| Customer relationships | 13,458 | |
| Other intangible assets | 2,814 | |
| Goodwill | 30,811 | |
| Investments in unconsolidated affiliates | 2,676 | |
| Other long-term assets | 1,191 | |
| Total assets acquired | $ | 65,608 | |
| | |
| Liabilities assumed (1) | |
| Accounts payable and accrued expenses | $ | 1,613 | |
| Short-term and current maturities of long-term debt (3) | 243 | |
| Contract liabilities | 71 | |
| Settlement obligations | 10,398 | |
| Deferred income taxes | 3,671 | |
| Long-term contract liabilities | 16 | |
| Long-term debt and other long-term liabilities (4) | 1,261 | |
| Total liabilities assumed | $ | 17,273 | |
| | |
| Net assets acquired | $ | 48,335 | |
| Redeemable noncontrolling interests | 252 | |
| Noncontrolling interests | 1,608 | |
| Total purchase price | $ | 46,475 | |
| | |
(1)In connection with the acquisition of First Data, the Company acquired two businesses which it intended to sell and subsequently sold in October 2019. Therefore, such businesses were classified as held for sale and were included within prepaid expenses and other current assets and accounts payable and accrued expenses in the above allocation of purchase price (see Note 5). (2)Includes $922 million of settlement cash and cash equivalents (see Note 1).(3)Includes foreign lines of credit, current portion of finance lease obligations and other financing obligations (see Note 12).(4)Includes the receivable securitized loan and the long-term portion of finance lease obligations (see Note 12).The fair values of the assets acquired and liabilities assumed were determined using the income and cost approaches. In many cases, the determination of the fair values required estimates about discount rates, growth and attrition rates, future expected cash flows and other future events that are judgmental. The fair value measurements were primarily based on significant inputs that are not observable in the market and thus represent a Level 3 measurement of the fair value hierarchy as defined in ASC 820, Fair Value Measurements. Intangible assets consisting of customer relationships, technology and trade names were valued using the multi-period excess earnings method (“MEEM”), or the relief from royalty (“RFR”) method, both are forms of the income approach. A cost and market approach was applied, as appropriate, for property and equipment, including land.•Customer relationship intangible assets were valued using the MEEM method. The significant assumptions used include the estimated annual net cash flows (including appropriate revenue and profit attributable to the asset, retention rate, applicable tax rate, and contributory asset charges, among other factors), the discount rate, reflecting the risks inherent in the future cash flow stream, an assessment of the asset’s life cycle, and the tax amortization benefit, among other factors.•Technology and trade name intangible assets were valued using the RFR method. The significant assumptions used include the estimated annual net cash flows (including appropriate revenue attributable to the asset, applicable tax rate, 65
| string | null | null |
Title of 12(b) Security | Common Stock, $5.00 Par Value | SEC-NUM |
UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10-K (Mark One)
| | | | | | |
| --- | --- | --- | --- | --- | --- |
| | | | | | |
| ☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2021 or
| | | | | | |
| --- | --- | --- | --- | --- | --- |
| | | | | | |
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to Commission file number 1-442
| | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | |
| | THE BOEING COMPANY | |
(Exact name of registrant as specified in its charter)
| | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | |
| Delaware | | 91-0425694 |
| (State or other jurisdiction ofincorporation or organization) | | (I.R.S. Employer Identification No.) |
| | | | | |
| 100 N. Riverside Plaza, | Chicago, | IL | | 60606-1596 |
| (Address of principal executive offices) | | (Zip Code) |
Registrant’s telephone number, including area code (312)-544-2000
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | |
| Common Stock, $5.00 Par Value | | BA | | New York Stock Exchange |
| (Title of each class) | | (Trading Symbol) | | (Name of each exchange on which registered) |
Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | |
| Large Accelerated Filer | ☒ | | Accelerated filer | ☐ |
| Non-accelerated filer | ☐ | | Smaller reporting company | ☐ |
| Emerging growth company | ☐ | | | |
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of June 30, 2021, there were 585,875,929 common shares outstanding held by nonaffiliates of the registrant, and the aggregate market value of the common shares (based upon the closing price of these shares on the New York Stock Exchange) was approximately $140.4 billion.
The number of shares of the registrant’s common stock outstanding as of January 24, 2022 was 582,999,765.
DOCUMENTS INCORPORATED BY REFERENCEPart III incorporates information by reference to the registrant’s definitive proxy statement, to be filed with the Securities and Exchange Commission within 120 days after the close of the fiscal year ended December 31, 2021.
| string | null | null |
Granted (in shares) | 6,190 | SEC-NUM |
The fair value of stock-based compensation associated with the ESPP is estimated on the date of grant (the first day of the six month offering period) using the Black-Scholes option pricing model.
The following table is a summary of the assumptions used to value the ESPP awards for the years ended December 31, 2021, 2020 and 2019:
| | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | |
| | 2021 | | 2020 | | 2019 |
| Dividend yield (1) | 1.34 | % | | 1.46 | % | | 1.70 | % |
| Expected volatility (2) | 25.27 | % | | 37.21 | % | | 27.96 | % |
| Risk-free interest rate (3) | 0.08 | % | | 0.81 | % | | 2.27 | % |
| Expected life (in years) (4) | 0.5 | | 0.5 | | 0.5 |
| Weighted-average grant date fair value | $ | 12.55 | | | $ | 13.85 | | | $ | 10.51 | |
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_(1)The dividend yield is calculated based on semi-annual dividends paid and the fair market value of CVS Health Corporation stock at the grant date.(2)The expected volatility is estimated based on the historical volatility of CVS Health Corporation’s daily stock price over the previous six month period.(3)The risk-free interest rate is selected based on the Treasury constant maturity interest rate whose term is consistent with the expected term of ESPP purchases (i.e., six months).(4)The expected life is based on the semi-annual purchase period.
Restricted Stock Units and Performance Stock Units
The Company’s restricted stock units and performance stock units are considered nonvested share awards and require no payment from the employee. The fair value of the restricted stock units is based on the market price of CVS Health Corporation common stock on the grant date and is recognized on a straight-line basis over the vesting period. For each restricted stock unit granted, employees receive one share of common stock, net of taxes, at the end of the vesting period.
The Company’s performance stock units contain performance vesting conditions in addition to a service vesting condition. Vesting of the Company’s performance stock units is dependent upon the degree to which the Company achieves its performance goals, which are generally set for a three-year performance period and are approved at the time of grant by the MP&D Committee.
The fair value of performance stock units granted with service and performance vesting conditions is based on the market price of CVS Health Corporation common stock on the grant date and is recognized over the vesting period. Certain of the performance stock units also contain a market vesting condition based on the performance of CVS Health Corporation common stock relative to a comparator group. The fair value of these performance stock units is determined using a Monte Carlo simulation as of the grant date and is recognized over the vesting period.
As of December 31, 2021, there was $529 million of total unrecognized compensation cost related to the Company’s restricted stock units and performance stock units that are expected to vest. These costs are expected to be recognized over a weighted-average period of 2.1 years. The total fair value of restricted stock units vested during 2021, 2020 and 2019 was $406 million, $229 million and $265 million, respectively.
The following table is a summary of the restricted stock unit and performance stock unit activity for the year ended December 31, 2021:
| | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | |
| In thousands, except weighted average grant date fair value | Units | | Weighted AverageGrant DateFair Value |
| Outstanding at beginning of year, nonvested | 14,824 | | | $ | 58.12 | |
| Granted | 6,190 | | | $ | 74.39 | |
| Vested | (5,448) | | | $ | 74.47 | |
| Forfeited | (1,236) | | | $ | 63.40 | |
| Outstanding at end of year, nonvested | 14,330 | | | $ | 63.02 | |
Stock Options and SARs
All stock option grants are awarded at fair value on the date of grant. The fair value of stock options is estimated using the Black-Scholes option pricing model, and stock-based compensation is recognized on a straight-line basis over the requisite 157
| string | null | null |
Loss Contingency, Number of Defendants | 32 | SEC-NUM |
Gulf Opportunity Zone Industrial Development Revenue Bonds - As of each of December 31, 2021 and 2020, the Company had $21 million outstanding under Gulf Opportunity Zone Industrial Development Revenue Bonds issued by the Mississippi Business Finance Corporation. These bonds accrue interest at a fixed rate of 4.55% per annum (payable semi-annually) and mature in 2028.
The Company's debt arrangements contain customary affirmative and negative covenants. The Company was in compliance with all debt covenants during the year ended December 31, 2021.
The estimated fair values of the Company's total long-term debt as of December 31, 2021, and December 31, 2020, were $3,449 million and $1,943 million, respectively. The fair values of the Company's long-term debt were calculated based on recent trades of the Company's debt instruments in inactive markets, which fall within Level 2 under the fair value hierarchy.
As of December 31, 2021, the aggregate amounts of principal payments due on long-term debt within the next five years consisted of $400 million due in 2023, $709 million due in 2024, and $500 million due in 2025.
14. INVESTIGATIONS, CLAIMS, AND LITIGATION
The Company is involved in legal proceedings before various courts and administrative agencies, and is periodically subject to government examinations, inquiries and investigations. Pursuant to FASB Accounting Standards Codification 450 Contingencies, the Company has accrued for losses associated with investigations, claims, and litigation when, and to the extent that, loss amounts related to the investigations, claims, and litigation are probable and can be reasonably estimated. The actual losses that might be incurred to resolve such investigations, claims, and litigation may be higher or lower than the amounts accrued. For matters where a material loss is probable or reasonably possible and the amount of loss cannot be reasonably estimated, but the Company is able to reasonably estimate a range of possible losses, the Company will disclose such estimated range in these notes. This estimated range is based on information currently available to the Company and involves elements of judgment and significant uncertainties. Any estimated range of possible loss does not represent the Company's maximum possible loss exposure. For matters as to which the Company is not able to reasonably estimate a possible loss or range of loss, the Company will indicate the reasons why it is unable to estimate the possible loss or range of loss. For matters not specifically described in these notes, the Company does not believe, based on information currently available to it, that it is reasonably possible that the liabilities, if any, arising from such investigations, claims, and litigation will have a material effect on its consolidated financial position, results of operations, or cash flows. The Company has, in certain cases, provided disclosure regarding certain matters for which the Company believes at this time that the likelihood of material loss is remote.
False Claims Act Complaint - In 2016, the Company was made aware that it is a defendant in a qui tam False Claims Act lawsuit pending in the U.S. District Court for the Middle District of Florida related to the Company’s purchases of allegedly non-conforming parts from a supplier for use in connection with U.S. Government contracts. In August 2019, the Department of Justice (“DoJ”) declined to intervene in the lawsuit, and the lawsuit was unsealed. The court dismissed the complaint in September 2021, and the plaintiff has appealed the dismissal to the United States Court of Appeals for the 11th Circuit.
Insurance Claims - In September 2020, the Company filed a complaint in the Superior Court, State of Vermont, Franklin Unit, seeking a judgment declaring that the Company's business interruption and other losses associated with COVID-19 are covered by the Company's property insurance program. A total of 32 reinsurers are named as defendants in the complaint. The Company also has initiated arbitration proceedings against six other reinsurers seeking similar relief. Prior to filing the complaint and initiating the arbitration proceedings, the Company provided a notice of loss to the reinsurers, but, to date, none of the reinsurers have acknowledged coverage. The full extent of the Company's losses resulting from COVID-19 have not yet been determined. In July 2021, the Vermont court granted the reinsurers’ motion for judgment on the pleadings, finding that, because the Company continued to operate through the pandemic, the Company’s reduction of business not accompanied by a complete loss of use fell short of the required “direct physical loss or damage to property.” The Company has appealed the decision to the Vermont Supreme Court. Although the Company still believes its position is well-founded, no assurances can be provided regarding the ultimate resolution of this matter. In September 2021, the Company filed a complaint in the Superior Court of Delaware, seeking a judgment against certain insurers for breach of contract and breach of the implied covenant of good faith and fair dealing under three 90
| string | null | null |
Threshold of disclosing material environmental legal proceedings | 1 | SEC-NUM |
[Table of Contents](#i8e6404ebd98d416daa7f88f48159b601_7)EDWARDS LIFESCIENCES CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)17. INCOME TAXES (Continued)December 31, 2021. The Company has considered this information, as well as information regarding the NOPA described above, in its evaluation of its uncertain tax positions. The impact of these unresolved transfer pricing matters, net of any correlative repatriation tax adjustment, may be significant to the Company’s consolidated financial statements. Based on the information currently available and numerous possible outcomes, the Company cannot reasonably estimate what, if any, changes in its existing uncertain tax positions may occur in the next 12 months and, therefore, has continued to record the uncertain tax positions as a long-term liability.
18. LEGAL PROCEEDINGS
The Company is reviewing and investigating whether business activities in Japan and other markets violate certain provisions of the Foreign Corrupt Practices Act ("FCPA"). The Company has voluntarily notified the SEC and the United States Department of Justice that it has engaged outside counsel to conduct this review and investigation. Any determination that the Company’s operations or activities are not in compliance with existing laws, including the FCPA, could result in the imposition of fines, penalties, and equitable remedies. The Company cannot currently predict the outcome of the review and investigation or the potential impact on its financial statements.
On September 28, 2021, Aortic Innovations LLC, a non-practicing entity, filed a lawsuit against Edwards Lifesciences Corporation and certain of its subsidiaries ("Edwards") in the United States District Court for the District of Delaware alleging that Edwards’ SAPIEN 3 Ultra product infringes certain of its patents. The Company is unable to predict the ultimate outcome of this matter or estimate a range of possible exposure; therefore, no amounts have been accrued. The Company intends to vigorously defend itself in this litigation.
The Company is or may be a party to, or may otherwise be responsible for, pending or threatened lawsuits including those related to products and services currently or formerly manufactured or performed, as applicable, by the Company, workplace and employment matters, matters involving real estate, Company operations or health care regulations, or governmental investigations (the "Lawsuits"). The Lawsuits raise difficult and complex factual and legal issues and are subject to many uncertainties, including, but not limited to, the facts and circumstances of each particular case or claim, the jurisdiction in which each suit is brought, and differences in applicable law. Management does not believe that any loss relating to the Lawsuits would have a material adverse effect on the Company's overall financial condition, results of operations or cash flows. However, the resolution of one or more of the Lawsuits in any reporting period, could have a material adverse impact on the Company's financial results for that period. The Company is not able to estimate the amount or range of any loss for legal contingencies related to the Lawsuits for which there is no reserve or additional loss for matters already reserved.
The Company is subject to various environmental laws and regulations both within and outside of the United States. The Company's operations, like those of other medical device companies, involve the use of substances regulated under environmental laws, primarily in manufacturing and sterilization processes. While it is difficult to quantify the potential impact of continuing compliance with environmental protection laws, management believes that such compliance will not have a material impact on the Company's financial results. The Company's threshold of disclosing material environmental legal proceedings involving a governmental authority where potential monetary exposure is involved is $1 million.
19. SEGMENT INFORMATION
Edwards Lifesciences conducts operations worldwide and is managed in the following geographical regions: United States, Europe, Japan, and Rest of World. All regions sell products that are used to treat advanced cardiovascular disease.
The Company's geographic segments are reported based on the financial information provided to the Chief Operating Decision Maker (the Chief Executive Officer). The Company evaluates the performance of its geographic segments based on net sales and operating income. The accounting policies of the segments are the same as those described in Note 2. Segment net sales and segment operating income are based on internally derived standard foreign exchange rates, which may differ from year to year, and do not include inter-segment profits. Because of the interdependence of the reportable segments, the operating profit as presented may not be representative of the geographical distribution that would occur if the segments were not interdependent. Net sales by geographic area are based on the location of the customer. There were no customers that represented 10% or more of the Company's total net sales.
86
| string | null | null |
Dividend record date | September 9, 2022 | SEC-NUM |
[Table of Contents](#i3e760ad3c5f94c5892b7ddc949ade806_7)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Year Ended |
| | June 30, 2020 |
| | Core | | Payments | | Complementary | | Corporate and Other | | Total |
| REVENUE | | | | | | | | | |
| Services and Support | $ | 529,997 | | | $ | 66,920 | | | $ | 401,639 | | | $ | 52,895 | | | $ | 1,051,451 | |
| Processing | 31,372 | | | 530,773 | | | 82,507 | | | 964 | | | 645,616 | |
| Total Revenue | 561,369 | | | 597,693 | | | 484,146 | | | 53,859 | | | 1,697,067 | |
| | | | | | | | | | |
| Cost of Revenue | 240,492 | | | 319,739 | | | 203,963 | | | 244,270 | | | 1,008,464 | |
| Research and Development | | | | | | | | | 109,988 | |
| Selling, General, and Administrative | | | | | | | | | 197,988 | |
| | | | | | | | | | |
| Total Expenses | | | | | | | | | 1,316,440 | |
| | | | | | | | | | |
| SEGMENT INCOME | $ | 320,877 | | | $ | 277,954 | | | $ | 280,183 | | | $ | (190,411) | | | |
| | | | | | | | | | |
| OPERATING INCOME | | | | | | | | | 380,627 | |
| | | | | | | | | | |
| INTEREST INCOME (EXPENSE) | | | | | | | | | 449 | |
| | | | | | | | | | |
| INCOME BEFORE INCOME TAXES | | | | | | | | | $ | 381,076 | |
The Company has not disclosed any additional asset information by segment, as the information is not produced internally and its preparation is impracticable.
NOTE 15. SUBSEQUENT EVENTSSale of FacilityOn August 12, 2022, the Company closed on the sale of its San Diego, CA, facility that was committed to during the quarter ended March 31, 2022. The sales price of the facility was $27,500, and proceeds after selling costs were received on the date of closing. The facility sale included assets with a carrying value of approximately $20,201 that were reported as assets held for sale by the Company at June 30, 2022 (see Note 5). The Company expects to recognize a gain on the sale of approximately $6,000 during the first quarter of fiscal 2023.DividendOn August 22, 2022, the Company's Board of Directors declared a cash dividend of $0.49 per share on its common stock, payable on September 29, 2022 to stockholders of record on September 9, 2022.AcquisitionWe have entered into a definitive agreement to acquire Payrailz, LLC. We anticipate the transaction closing on August 31, 2022. In connection with the closing, we expect to amend the revolving credit facility to increase the borrowing limit to allow funding of the transaction.59
| string | null | null |
Deconsolidation, Revaluation of Retained Investment, Gain (Loss), Amount | 1.2 | SEC-NUM |
34 | Notes to Condensed Consolidated Financial Statements—(Continued) | September 30, 2022 and 2021of our last impairment test. These changes to the inputs of our discount rate may negatively impact our annual goodwill impairment test as of October 1, 2022. The analysis of the cash flows to which these inputs are applied is currently in process. It is currently not known if these inputs to the discount rate are significant enough to result in an impairment of goodwill.Should the fair value of any of the Company’s reporting units fall below its carrying amount as a result of these inputs or other changes such as reduced operating performance, market declines, changes in the discount rate, regulatory changes, or other adverse conditions, goodwill impairment charges may be necessary in future periods.Alto Maipo — On August 27, 2021, Alto Maipo updated its creditors with respect to the construction budget and long-term business plan for the project, which considers different scenarios for spot prices, decarbonization initiatives, and hydrological conditions, among other significant variables. Under some of these scenarios, Alto Maipo may experience reduced future cash flows, which would limit its ability to repay debt. Alto Maipo’s management initiated negotiations with its creditors to restructure its obligations and achieve a sustainable long-term capital structure for Alto Maipo. On November 17, 2021, Alto Maipo SpA commenced a reorganization proceeding in accordance with Chapter 11 of the U.S. Bankruptcy Code, through a voluntary petition. Consequently, after the Chapter 11 filing, the Company is no longer considered to have control over Alto Maipo, which resulted in its deconsolidation. The Company recognized an after-tax loss of approximately $1.2 billion, net of noncontrolling interests, in the Consolidated Statement of Operations in the fourth quarter of 2021, associated with the loss of control attributable to the former controlling interest.On May 26, 2022, Alto Maipo emerged from bankruptcy in accordance with Chapter 11 of the U.S. Bankruptcy Code. Alto Maipo, as restructured, is considered a VIE. As the Company lacks the power to make significant decisions, it does not meet the criteria to be considered the primary beneficiary of Alto Maipo and therefore will not consolidate this entity. The Company has elected the fair value option to account for its investment in Alto Maipo. If Alto Maipo is unable to meet its obligations under the restructured arrangements as they come due, the creditors may enforce their rights under the credit agreements. These finance agreements are non-recourse with respect to The AES Corporation.21. SUBSEQUENT EVENTS Southland Energy — On November 3, 2022, the Company signed an agreement to sell an additional 14.9% of its ownership interest in the Southland repowering assets (“Southland Energy”). Once this sale is completed, AES will hold 50.1% of Southland Energy’s interest. The transaction is expected to close during the fourth quarter of 2022 and is expected to be accounted for as an equity transaction, with no gain or loss recognized in the financial statements. Southland Energy is expected to continue being consolidated by the Company within the US and Utilities SBU reportable segment.
| string | null | null |
Accounts receivable, net | 2.5 | SEC-NUM |
[Table of Contents](#ifd0dff1f28084ac0b92d7f0a49d14a91_7)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Specialty Vehicle Technologies | | High Pressure Solutions | | Total |
| | For the Nine Month Period Ended September 30, |
| | 2022 | | 2021 | | 2022 | | 2021 | | 2022 | | 2021 |
| Revenues | $ | 6.6 | | | $ | 428.7 | | | $ | — | | | $ | 68.0 | | | $ | 6.6 | | | $ | 496.7 | |
| Cost of sales | 6.5 | | | 319.1 | | | — | | | 56.8 | | | 6.5 | | | 375.9 | |
| Gross Profit | 0.1 | | | 109.6 | | | — | | | 11.2 | | | 0.1 | | | 120.8 | |
| Selling and administrative expenses | 0.1 | | | 35.6 | | | — | | | 5.1 | | | 0.1 | | | 40.7 | |
| Amortization of intangible assets | — | | | 10.4 | | | — | | | 2.4 | | | — | | | 12.8 | |
| Loss (gain) on sale | (2.8) | | | (252.8) | | | — | | | 211.7 | | | (2.8) | | | (41.1) | |
| Other operating expense, net | 0.4 | | | 18.0 | | | 1.6 | | | 17.3 | | | 2.0 | | | 35.3 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| Income (Loss) from Discontinued Operations Before Income Taxes | 2.4 | | | 298.4 | | | (1.6) | | | (225.3) | | | 0.8 | | | 73.1 | |
| Provision (benefit) for income taxes | 0.5 | | | 168.2 | | | (0.3) | | | (7.0) | | | 0.2 | | | 161.2 | |
| Income (Loss) from Discontinued Operations, Net of Tax | $ | 1.9 | | | $ | 130.2 | | | $ | (1.3) | | | $ | (218.3) | | | $ | 0.6 | | | $ | (88.1) | |
The carrying amount of assets and liabilities attributable to discontinued operations are shown in the table below. There were no assets or liabilities of discontinued operations as of September 30, 2022.
| | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | |
| | | | December 31, 2021 |
| | | | |
| | | | |
| Cash and cash equivalents | | | $ | 6.2 | |
| Accounts receivable, net | | | 2.5 | |
| Inventories | | | 5.6 | |
| Other current assets | | | 0.1 | |
| | | | |
| Property, plant and equipment, net | | | 1.2 | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| Total assets of discontinued operations | | | $ | 15.6 | |
| | | | |
| | | | |
| | | | |
| | | | |
| Accounts payable | | | $ | 2.2 | |
| Accrued liabilities | | | 14.9 | |
| Total liabilities of discontinued operations | | | $ | 17.1 | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
The significant non-cash operating items and capital expenditures reflected in cash flows of discontinued operations for the nine month periods ended September 30, 2022 and 2021 include the following:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Specialty Vehicle Technologies | | High Pressure Solutions | | Total |
| | For the Nine Month Period Ended September 30, |
| | 2022 | | 2021 | | 2022 | | 2021 | | 2022 | | 2021 |
| Loss (gain) on sale | $ | (2.8) | | | $ | (252.8) | | | $ | — | | | $ | 211.7 | | | $ | (2.8) | | | $ | (41.1) | |
| Depreciation and amortization | — | | | 14.8 | | | — | | | 4.0 | | | — | | | 18.8 | |
| Stock-based compensation expense | — | | | 8.2 | | | — | | | 2.7 | | | — | | | 10.9 | |
| Capital expenditures | — | | | 1.6 | | | — | | | 0.3 | | | — | | | 1.9 | |
Note 3. Business CombinationsAcquisitions in 2022During the first quarter of 2022, the Company acquired Houdstermaatschappij Jorc B.V. (“Jorc”), a manufacturer of condensate management products, for cash consideration of $30.1 million. The Company also acquired two sales and services businesses in 14
| string | null | null |
Acquisition related costs | 32 | SEC-NUM |
On November 8, 2021, the Company completed its acquisition of the European-based asset management business of BMO Financial Group for $973 million, excluding an estimated $7 million reduction due to customary deferred and contingent adjustments. The all-cash transaction added $136 billion of assets under management in EMEA. The acquisition extends our reach in EMEA and accelerates our core strategy of growing fee-based businesses. Acquisition-related costs were $32 million and are included in General and administrative expense.
The fair value of the total consideration paid and the recognized assets and acquired liabilities assumed for this business are included in the table below. Goodwill of $287 million arising from acquisition consists largely of the synergies and economies of scale expected from combining the Company’s EMEA operations. All goodwill was assigned to the Asset Management segment.
The following table summarizes the consideration paid, assets acquired, and liabilities assumed at the acquisition date:
| | | | | | |
| --- | --- | --- | --- | --- | --- |
| | | | | | |
| | November 8, 2021 |
| (in millions) |
| Consideration paid | |
| Cash | $ | 973 | |
| Deferred considerations | (35) | |
| Contingent considerations | 28 | |
| Total fair value | $ | 966 | |
| | |
| Recognized Assets / Liabilities | |
| Assets | |
| Cash and cash equivalents | $ | 397 | |
| Investments | 77 | |
| Receivables | 116 | |
| Other assets | 295 | |
| Total assets | 885 | |
| Liabilities | |
| Debt | 2 | |
| Accounts payable and accrued expenses | 235 | |
| Other liabilities | 190 | |
| Total liabilities | 427 | |
| Identifiable net assets | $ | 458 | |
| | |
| Intangible assets | $ | 295 | |
| Deferred tax liability | 74 | |
| Goodwill | 287 | |
The fair value of the pension plan assets and liabilities, the recognized deferred tax assets and other components of deferred and contingent consideration reflects the provisional valuation of those assets and liabilities.
The carrying amount of indefinite-lived intangible assets consist of the following:
| | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | |
| | December 31, |
| 2021 | | 2020 |
| (in millions) |
| Customer contracts | $ | 848 | | | $ | 640 | |
| Trade names | 69 | | | 69 | |
| Total | $ | 917 | | | $ | 709 | |
107
| string | null | null |
Options exercised (in dollars per share) | 9.30 | SEC-NUM |
[Table of Contents](#ie5b53d08516744208c4d15ed88453ce2_7)of 9,140,912 shares to the shares available for issuance under the 2014 Plan, as adjusted to give effect to the Stock Split. In fiscal 2020, in connection with our acquisition of Awake Security, we assumed the stock options outstanding under the Awake Security 2014 Equity Incentive Plan and registered an additional 461,352 shares to be available for future issuance, as adjusted to give effect to the Stock Split. As of December 31, 2021, there remained approximately 88.0 million shares available for issuance under the 2014 Plan. In February, 2022, our board of directors authorized an increase of 9,230,434 shares to shares available for future issuance under the 2014 Plan effective January 1, 2022.2014 Employee Stock Purchase PlanIn April 2014, the board of directors and stockholders approved the 2014 Employee Stock Purchase Plan (the “ESPP”). The ESPP became effective on the first day that our common stock was publicly traded. The number of shares reserved for issuance under the ESPP increases automatically on January 1 of each year by the number of shares equal to 1% of our shares outstanding immediately preceding December 31, but not to exceed 10,000,000 shares, unless the board of directors, in its discretion, determines to make a smaller increase. Effective January 1, 2021, our board of directors authorized an increase of 3,046,968 shares as adjusted to give effect to the Stock Split to shares available for issuance under the ESPP. As of December 31, 2021, there remained 18.0 million shares available for issuance under the ESPP. In February, 2022, our board of directors authorized an increase of 3,076,811 shares to shares available for issuance under the ESPP effective January 1, 2022.Under our ESPP, eligible employees are permitted to acquire shares of our common stock at 85% of the lower of the fair market value of our common stock on the first trading day of each offering period or on the exercise date. Each offering period lasts approximately two years starting on the first trading date after February 15 and August 15 of each year. Participants may purchase shares of common stock through payroll deductions up to 10% of their eligible compensation, subject to Internal Revenue Service mandated purchase limits. During the year ended December 31, 2021, we issued 458,284 shares at an average purchase price of $46.50 under our ESPP, as adjusted to give effect to the Stock Split. Stock Option ActivitiesThe following table summarizes the option activities and related information, as adjusted to give effect to the Stock Split (in thousands, except years and per share amounts):
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Number of Shares UnderlyingOutstanding Options | | Weighted- Average Exercise Price per Share | | Weighted- Average Remaining Contractual Term (In Years) | | Aggregate Intrinsic Value |
| Balance—December 31, 2020 | | 13,719 | | | $ | 11.29 | | | 3.6 | | $ | 841,659 | |
| Options granted | | — | | | — | | | | | |
| Options exercised | | (4,941) | | | 9.30 | | | | | |
| Options canceled | | (93) | | | 9.55 | | | | | |
| Balance—December 31, 2021 | | 8,685 | | | $ | 12.45 | | | 2.8 | | $ | 1,140,369 | |
| Vested and exercisable—December 31, 2021 | | 6,650 | | | $ | 9.70 | | | 2.4 | | $ | 891,466 | |
We did not grant any stock options in the year ended December 31, 2021. The weighted-average grant-date fair value of options granted during the years ended December 31, 2020 and 2019 was $46.24 and $26.86 per share, respectively, as adjusted to give effect to the Stock Split. The aggregate intrinsic value of options exercised during the years ended December 31, 2021, 2020 and 2019 was $410.9 million, $245.9 million and $323.1 million, respectively. The total fair value of options vested for the years ended December 31, 2021, 2020 and 2019 was approximately $25.3 million, $20.0 million and $23.0 million, respectively.94
| string | null | null |
Exercisable (in dollars per share) | 20.84 | SEC-NUM |
CAESARS ENTERTAINMENT, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)A summary of the MSUs activity for the year ended December 31, 2021 is presented in the following table:
| | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | |
| | Units | | Weighted- Average Fair Value (a) |
| Unvested outstanding as of December 31, 2020 | 446,087 | | | $ | 49.37 | |
| Granted | 147,471 | | | 102.98 | |
| | | | |
| Vested | (208,866) | | | 28.56 | |
| Forfeited | (2,769) | | | 84.12 | |
| Unvested outstanding as of December 31, 2021 | 381,923 | | | 77.09 | |
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_(a)Represents the grant date fair value determined using a Monte Carlo simulation model.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Stock Option Activity | | | | | | | | | |
| | Shares | | Weighted Average Exercise Price | | | | Weighted Average Remaining Contractual Term (years) | | Aggregate Intrinsic Value(in millions) |
| Outstanding as of December 31, 2020 | 176,724 | | | $ | 22.57 | | | | | 1.71 | | $ | 9 | |
| | | | | | | | | | |
| Exercised | (114,884) | | | 22.64 | | | | | | | |
| Forfeited | (1,233) | | | 26.65 | | | | | | | |
| Expired | (16,702) | | | 26.67 | | | | | | | |
| Outstanding as of December 31, 2021 | 43,905 | | | 20.69 | | | | | 1.05 | | 3 | |
| Vested and expected to vest as of December 31, 2021 | 43,905 | | | 20.69 | | | | | 1.05 | | 3 | |
| Exercisable as of December 31, 2021 | 42,610 | | | 20.84 | | | | | 1.05 | | 3 | |
| | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | |
| Stock Option Exercises | | | | | |
| | Years Ended December 31, |
| (Dollars in millions) | 2021 | | 2020 | | 2019 |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| Option Exercises: | | | | | |
| Number of options exercised | 114,884 | | | 70,608 | | | — | |
| Cash received for options exercised | $ | 3 | | | $ | 1 | | | $ | — | |
| Aggregate intrinsic value of options exercised | $ | 9 | | | $ | 5 | | | $ | — | |
| | | | | | |
| | | | | | |
| | | | | | |
Unrecognized Compensation CostAs of December 31, 2021, the Company had $120 million of unrecognized compensation expense, which is expected to be recognized over a weighted-average period of 1.4 years.Common Stock OfferingsOn June 19, 2020, the Company completed the public offering of 20,700,000 shares (including the shares sold pursuant to the underwriters’ overallotment option) of Company Common Stock, at an offering price of $39.00 per share, which provided $772 million of proceeds, net of fees and estimated expenses of $35 million.On October 1, 2020, the Company completed the public offering of 35,650,000 shares (including the shares sold pursuant to the underwriters’ overallotment option) of Company Common Stock, at an offering price of $56.00 per share, which provided $1.9 billion of proceeds, net of fees and estimated expenses of $50 million.Changes to the Authorized SharesOn June 17, 2021, following receipt of required shareholder approvals, the Company amended its Certificate of Incorporation to increase the number of authorized shares of common stock from 300 million to 500 million, and authorize the issuance of up to 150 million shares of preferred stock. As of December 31, 2021, no shares of preferred stock have been issued.Share Repurchase ProgramIn November 2018, the Board authorized a $150 million common stock repurchase program (the “Share Repurchase Program”) pursuant to which the Company may, from time to time, repurchase shares of common stock on the open market (either with or [Table of Contents](#i37dfc5eabc12461dbfc5ef573d80947e_7)106
| string | null | null |
Aggregate principal amount of current and long-term debt | 4,890 | SEC-NUM |
EOG RESOURCES, INC.NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued) (Unaudited)
When circumstances indicate that proved oil and gas properties may be impaired, EOG compares expected undiscounted future cash flows at a depreciation, depletion and amortization group level to the unamortized capitalized cost of the asset. If the expected undiscounted future cash flows, based on EOG's estimate of (and assumptions regarding) significant Level 3 inputs, including future crude oil, natural gas liquids (NGLs) and natural gas prices, operating costs, development expenditures, anticipated production from proved reserves and other relevant data, are lower than the unamortized capitalized cost, the capitalized cost is reduced to fair value. Fair value is generally calculated using the Income Approach described in the FASB's Fair Value Measurement Topic of the Accounting Standards Codification. In certain instances, EOG utilizes accepted offers from third-party purchasers as the basis for determining fair value.
EOG utilized average prices per acre from comparable market transactions and estimated discounted cash flows as the basis for determining the fair value of unproved and proved properties, respectively, received in non-cash property exchanges. See Note 4.
Fair Value Disclosures. EOG's financial instruments, other than financial commodity derivative contracts, consist of cash and cash equivalents, accounts receivable, accounts payable and current and long-term debt. The carrying values of cash and cash equivalents, accounts receivable and accounts payable approximate fair value.
At both September 30, 2022 and December 31, 2021, EOG had outstanding $4,890 million aggregate principal amount of senior notes, which had estimated fair values at such dates of approximately $4,667 million and $5,577 million, respectively. The estimated fair value of debt was based upon quoted market prices and, where such prices were not available, other observable (Level 2) inputs regarding interest rates available to EOG at the end of each respective period.
-18-
| string | null | null |
Defined Benefit Plan, Benefit Obligation, Business Combination | 105 | SEC-NUM |
[Table of Contents](#ib75a44f638b042a5a7472d3f3be80b22_7)NOTE 3. RUSSIAN OPERATIONS On March 17, 2022, the Board of Directors (the Board) decided to indefinitely suspend our operations in Russia due to the ongoing conflict in Ukraine. At the time of suspension, our Russian operations included a wholly-owned distributor in Russia, an unconsolidated joint venture (the Unconsolidated JV) with KAMAZ Publicly Traded Company (KAMAZ), a Russian truck manufacturer, and direct sales into Russia from our other business segments. As a result of the suspension of operations, we evaluated the recoverability of assets in Russia and assessed other potential liabilities. We experienced and expect to continue to experience an inability to collect customer receivables and may be the subject of litigation as a consequence of our suspension of commercial operations in Russia. We recorded a charge of $158 million in the first quarter related to these actions. In the second quarter, we recovered certain inventory and other expense amounts reserved in the first quarter and incurred some small additional charges resulting in a net recovery of $47 million. In the third quarter, we incurred $4 million of additional contract termination charges, and we recovered certain bad debt expenses and inventory amounts reserved in the first quarter for a net charge of $1 million. As of September 30, 2022, we had approximately $13 million of inventory and $15 million of receivables in Russia, all of which are fully reserved. In addition, we have cash balances of $71 million, some of which will be used to fund ongoing employee, tax and contract settlement obligations. The following summarizes the costs (recoveries) associated with the suspension of our Russian operations in our Condensed Consolidated Statements of Net Income:
| | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | |
| | | Three months ended | | Nine months ended | | |
| In millions | | September 30,2022 | | September 30,2022 | | Statement of Net Income Location |
| Inventory write-downs | | $ | (2) | | | $ | 17 | | | Cost of sales |
| Accounts receivable reserves | | (1) | | | 42 | | | Other operating expense, net |
| Impairment and other joint venture costs | | — | | | 31 | | | Equity, royalty and interest income from investees |
| | | | | | | |
| Other | | 4 | | | 22 | | | Other operating expense, net |
| Total | | $ | 1 | | | $ | 112 | | | |
| | | | | | | |
We will continue to evaluate the situation as conditions evolve and may take additional actions as deemed necessary in future periods. NOTE 4. PENSIONS AND OTHER POSTRETIREMENT BENEFITS We sponsor funded and unfunded domestic and foreign defined benefit pension and other postretirement benefit (OPEB) plans. Prior to the acquisition, Meritor provided a range of benefits to its employees and retirees, including pension benefits and postretirement healthcare benefits. As part of the acquisition, we assumed the assets and liabilities associated with these plans. Accordingly, on August 3, 2022, we recorded assets of $147 million and liabilities of $105 million on our Condensed Consolidated Balance Sheets related to Meritor's postretirement benefit plans.Contributions to these plans were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three months ended | | Nine months ended |
| In millions | | September 30,2022 | | October 3,2021 | | September 30,2022 | | October 3,2021 |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| Defined benefit pension contributions | | $ | 7 | | | $ | 13 | | | $ | 46 | | | $ | 67 | |
| | | | | | | | | |
| | | | | | | | | |
| OPEB payments, net | | 9 | | | 5 | | | 25 | | | 19 | |
| | | | | | | | | |
| | | | | | | | | |
| Defined contribution pension plans | | 26 | | | 20 | | | 82 | | | 72 | |
| | | | | | | | | |
We anticipate making additional defined benefit pension contributions during the remainder of 2022 of $7 million for our U.S. and U.K. qualified and non-qualified pension plans. These contributions may be made from trusts or company funds either to increase pension assets or to make direct benefit payments to plan participants. We expect our 2022 annual net periodic pension cost to approximate $20 million.13
| string | null | null |
Year that reaches the ultimate trend rate | 2027 | SEC-NUM |
[Table of Contents](#ic0f1e00f8fa04a87b8ba424679040b3d_7)
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Pension Benefits | | Post-retirement Benefits |
| (in thousands) | | 2021 | | 2020 | | 2021 | | 2020 |
| Change in Plan Assets | | | | | | | | |
| Fair Value of Plan Assets at Beginning of Year | | $ | 1,553,532 | | | $ | 1,477,288 | | | $ | — | | | $ | — | |
| Actual Return on Plan Assets | | 211,054 | | | 183,647 | | | — | | | — | |
| Participant Contributions | | — | | | — | | | 2,113 | | | 2,344 | |
| Employer Contributions | | 10,712 | | | 8,562 | | | 21,105 | | | 18,646 | |
| Benefits Paid | | (76,702) | | | (115,965) | | | (23,218) | | | (20,990) | |
| Fair Value of Plan Assets at End of Year | | $ | 1,698,596 | | | $ | 1,553,532 | | | $ | — | | | $ | — | |
| Funded Status at End of Year | | $ | (13,362) | | | $ | (113,354) | | | $ | (274,666) | | | $ | (285,293) | |
Amounts recognized in the Consolidated Statements of Financial Position as of October 31, 2021, and October 25, 2020, are as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Pension Benefits | | Post-retirement Benefits |
| (in thousands) | | 2021 | | 2020 | | 2021 | | 2020 |
| Pension Assets | | $ | 289,096 | | | $ | 183,232 | | | $ | — | | | $ | — | |
| Employee-related Expenses | | (11,173) | | | (9,332) | | | (19,589) | | | (19,669) | |
| Pension and Post-retirement Benefits | | (291,285) | | | (287,254) | | | (255,077) | | | (265,624) | |
| Net Amount Recognized | | $ | (13,362) | | | $ | (113,354) | | | $ | (274,666) | | | $ | (285,293) | |
The accumulated benefit obligation for all pension plans was $1.7 billion and $1.6 billion as of October 31, 2021, and October 25, 2020, respectively. The following table provides information for pension plans with projected and accumulated benefit obligations in excess of plan assets:
| | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | |
| (in thousands) | | 2021 | | 2020 |
| Projected Benefit Obligation | | $ | 302,458 | | | $ | 296,585 | |
| Accumulated Benefit Obligation | | 292,877 | | | 288,359 | |
| Fair Value of Plan Assets | | — | | | — | |
Weighted-average assumptions used to determine benefit obligations are as follows:
| | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | |
| | | 2021 | | 2020 |
| Discount Rate | | 3.00 | % | | 3.06 | % |
| Rate of Future Compensation Increase (For Plans that Base Benefits onFinal Compensation Level) | | 4.14 | % | | 4.09 | % |
Weighted-average assumptions used to determine net periodic benefit costs are as follows:
| | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | |
| | | 2021 | | 2020 | | 2019 |
| Discount Rate | | 3.06 | % | | 3.37 | % | | 4.55 | % |
| Rate of Future Compensation Increase (For Plans that Base Benefits on Final Compensation Level) | | 4.09 | % | | 4.06 | % | | 3.96 | % |
| Expected Long-term Return on Plan Assets | | 6.75 | % | | 7.00 | % | | 7.15 | % |
The expected long-term rate of return on plan assets is based on fair value and developed in consultation with outside advisors. A range is determined based on the composition of the asset portfolio, historical long-term rates of return, and estimates of future performance.
For measurement purposes, an 8 percent annual rate of increase in the per capita cost of covered health care benefits for pre-Medicare and post-Medicare retirees’ coverage is assumed for 2022. The pre-Medicare and post-Medicare rate is assumed to decrease to 5 percent for 2027 and remain steady thereafter. The Company’s funding policy is to make annual contributions of not less than the minimum required by applicable regulations. The Company expects to make contributions of $31.1 million during fiscal 2022 that represent benefit payments for unfunded plans. 50
| string | null | null |
Options granted (in shares) | 1,078 | SEC-NUM |
[Table of Contents](#i16ebb68f4bd84ff99a771b20ec27c3fc_7)Stock OptionsStock options are valued using the Black-Scholes option pricing model and compensation expense is recognized on a straight-line basis over the requisite service period. Options granted in 2021, 2020 and 2019 are immaterial.Certain of our directors elected to defer their compensation into stock options under the 2013 Director Deferred Compensation Plan. These options vest immediately and are expensed on the grant date. The following tables summarize information about options outstanding at January 29, 2022 and changes during the year then ended:
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Number of Shares | | Weighted Average Per Share Exercise Price | | Weighted Average Remaining Term (Years) | | Aggregate Intrinsic Value(in millions) |
| Outstanding, beginning of period | | 117,057 | | | $ | 79.75 | | | | | |
| Granted | | 1,078 | | | 140.52 | | | | | |
| Exercised | | (93,594) | | | 77.67 | | | | | |
| | | | | | | | | |
| Outstanding, end of period | | 24,541 | | | $ | 90.38 | | | 4.8 | | $ | 0.9 | |
| Options vested and exercisable at January 29, 2022 | | 24,541 | | | $ | 90.38 | | | 4.8 | | $ | 0.9 | |
The intrinsic value of options exercised during 2021, 2020 and 2019 was $5.6 million, $0.9 million and $1.6 million, respectively.Note 11 – Segments and Disaggregated RevenueWe operate a chain of more than 16,000 retail discount stores in 48 states and five Canadian provinces. Our operations are conducted in two reporting business segments: Dollar Tree and Family Dollar. We define our segments as those operations whose results our CODM regularly reviews to analyze performance and allocate resources. We measure the results of our segments using, among other measures, each segment’s net sales, gross profit and operating income. The CODM reviews these metrics for each of our reporting segments. We may revise the measurement of each segment’s operating income, as determined by the information regularly reviewed by the CODM. If the measurement of a segment changes, prior period amounts and balances are reclassified to be comparable to the current period’s presentation. Corporate, support and Other consists primarily of store support center costs that are considered shared services and therefore these selling, general and administrative costs are excluded from our two reporting business segments. These costs include operating expenses for our store support center and the results of operations for our Summit Pointe property in Chesapeake, Virginia. The Family Dollar segment Operating income includes advertising revenue, which is a component of Other revenue in the accompanying consolidated income statements.Information for our segments, as well as for Corporate, support and Other, including the reconciliation to Income before income taxes, is as follows:
| | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | |
| | | Year Ended |
| | | January 29, | | January 30, | | February 1, |
| (in millions) | | 2022 | | 2021 | | 2020 |
| Consolidated Income Statement Data: | | | | | | |
| Net sales: | | | | | | |
| Dollar Tree | | $ | 13,922.1 | | | $ | 13,265.0 | | | $ | 12,507.9 | |
| Family Dollar | | 12,387.7 | | | 12,243.4 | | | 11,102.9 | |
| Consolidated Net sales | | $ | 26,309.8 | | | $ | 25,508.4 | | | $ | 23,610.8 | |
| | | | | | | |
| Gross profit: | | | | | | |
| Dollar Tree | | $ | 4,603.6 | | | $ | 4,543.8 | | | $ | 4,342.9 | |
| Family Dollar | | 3,122.3 | | | 3,243.6 | | | 2,697.8 | |
| Consolidated Gross profit | | $ | 7,725.9 | | | $ | 7,787.4 | | | $ | 7,040.7 | |
| | | | | | | |
64
| string | null | null |
Percent of requested deduction allowed by IRS of uncertain decommissioning tax postion | 10 | SEC-NUM |
[Table of Contents](#i6266d2788e5849989ad57be380853c2d_7)Entergy Corporation and SubsidiariesNotes to Financial Statements
In addition, in September 2020, the IRS issued a Notice of Proposed Adjustment (NOPA) and Entergy executed it. The NOPA memorializes the IRS’s decision to adjust the 2015 consolidated federal income tax return of Entergy Corporation and certain of its subsidiaries, including System Energy, with regard to the uncertain decommissioning tax position. Pursuant to the audit resolution documented in the NOPA, the IRS allowed System Energy’s inclusion of $102 million of future nuclear decommissioning costs in System Energy’s cost of goods sold for the 2015 tax year, roughly 10% of the requested deduction, but disallowed the balance of the position. In September 2020, System Energy filed a motion to lodge the NOPA into the record in the FERC proceeding. In October 2020 the LPSC, the APSC, the MPSC, the City Council, and the FERC trial staff filed oppositions to System Energy’s motion. As a result of the NOPA issued by the IRS in September 2020, System Energy filed, in October 2020, a new Federal Power Act section 205 filing at FERC to establish an ongoing rate base credit for the accumulated deferred income taxes resulting from the decommissioning uncertain tax position. On a prospective basis beginning with the October 2020 bill, System Energy proposes to include the accumulated deferred income taxes arising from the successful portion of the decommissioning uncertain tax position as a credit to rate base under the Unit Power Sales Agreement. In November 2020 the LPSC, APSC, MPSC, and City Council filed a protest to the filing, and System Energy responded.
In November 2020 the IRS issued a Revenue Agent’s Report (RAR) for the 2014/2015 tax year and in December 2020 Entergy executed it. The RAR contained the same adjustment to the uncertain nuclear decommissioning tax position as that which the IRS had announced in the NOPA. In December 2020, System Energy filed a motion to lodge the RAR into the record in the FERC proceeding addressing the uncertain tax position rate base issue. In January 2021 the LPSC, APSC, MPSC, and City Council filed a protest to the motion.
As a result of the RAR, in December 2020, System Energy filed amendments to its new Federal Power Act section 205 filings to establish an ongoing rate base credit for the accumulated deferred income taxes resulting from the decommissioning uncertain tax position and to credit excess accumulated deferred income taxes arising from the successful portion of the decommissioning uncertain tax position. The amendments both propose the inclusion of the RAR as support for the filings. In December 2020 the LPSC, APSC, and City Council filed a protest in response to the amendments, reiterating their prior objections to the filings. In February 2021 the FERC issued an order accepting System Energy’s Federal Power Act section 205 filings subject to refund, setting them for hearing, and holding the hearing in abeyance.
In December 2020, System Energy filed a new Federal Power Act section 205 filing to provide a one-time, historical credit of $25.2 million for the accumulated deferred income taxes that would have been created by the decommissioning uncertain tax position if the IRS’s decision had been known in 2016. In January 2021 the LPSC, APSC, MPSC, and City Council filed a protest to the filing. In February 2021 the FERC issued an order accepting System Energy’s Federal Power Act section 205 filing subject to refund, setting it for hearing, and holding the hearing in abeyance. The one-time credit was made during the first quarter 2021.
LPSC Authorization of Additional Complaints
In May 2020 the LPSC authorized its staff to file additional complaints at the FERC related to the rates charged by System Energy for Grand Gulf energy and capacity supplied to Entergy Louisiana under the Unit Power Sales Agreement. The LPSC directive notes that the initial decision issued by the presiding ALJ in the Grand Gulf sale-leaseback complaint proceeding did not address, for procedural reasons, certain rate issues raised by the LPSC and declined to order further investigation of rates charged by System Energy. The LPSC directive authorizes its staff to file complaints at the FERC “necessary to address these rate issues, to request a full investigation into the rates charged by System Energy for Grand Gulf power, and to seek rate refund, rate reduction, and such other remedies as may be necessary and appropriate to protect Louisiana ratepayers.” The LPSC directive further stated that the LPSC has seen “information suggesting that the Grand Gulf plant has been significantly underperforming compared to other nuclear plants in the United States, has had several extended and unexplained outages, and has been plagued with serious safety concerns.” The LPSC expressed concern that the costs paid by Entergy 99
| string | null | null |
Repayment of intercompany note | 347.4 | SEC-NUM |
[Table of Contents](#i9e3d7fad53bb42b083be8286e4319cd4_10)
| | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | |
| EVERGY, INC. | | |
| Statements of Cash Flows of Parent Company | | |
| | | | | | | | |
| | 2021 | | 2020 | | 2019 | | |
| CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES: | (millions) | | |
| Net income | $ | 872.8 | | | $ | 612.5 | | | $ | 664.4 | | | |
| Adjustments to reconcile income to net cash from operating activities: | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| Non-cash compensation | 15.6 | | | 16.0 | | | 16.3 | | | |
| Net deferred income taxes and credits | — | | | 9.6 | | | 21.4 | | | |
| | | | | | | | |
| | | | | | | | |
| Equity in earnings from subsidiaries | (932.9) | | | (683.4) | | | (698.2) | | | |
| Other | 7.0 | | | 7.0 | | | 2.1 | | | |
| Changes in working capital items: | | | | | | | |
| Accounts receivable from subsidiaries | (18.2) | | | (30.0) | | | 8.9 | | | |
| | | | | | | | |
| Income taxes receivable | (7.5) | | | 0.6 | | | (7.8) | | | |
| Prepaid expenses and other current assets | — | | | 0.8 | | | (0.1) | | | |
| Accounts payable to subsidiaries | 3.9 | | | 5.0 | | | (15.0) | | | |
| | | | | | | | |
| Accrued interest | (1.4) | | | (0.7) | | | 12.5 | | | |
| Other current liabilities | (3.2) | | | 2.9 | | | 1.7 | | | |
| Cash dividends from subsidiaries | 290.0 | | | 355.0 | | | 460.0 | | | |
| Changes in other assets | 0.1 | | | 0.3 | | | 0.2 | | | |
| Changes in other liabilities | 4.8 | | | (3.7) | | | (3.5) | | | |
| Cash Flows from Operating Activities | 231.0 | | | 291.9 | | | 462.9 | | | |
| CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES: | | | | | | | |
| | | | | | | | |
| Repayment of intercompany note | 347.4 | | | — | | | — | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| Cash Flows from Investing Activities | 347.4 | | | — | | | — | | | |
| CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES: | | | | | | | |
| Short term debt, net | 157.1 | | | 180.0 | | | 20.0 | | | |
| | | | | | | | |
| Proceeds from long-term debt | — | | | — | | | 1,585.0 | | | |
| Retirements of long-term debt | (350.0) | | | — | | | — | | | |
| Payment for settlement of interest rate swap accounted for as a cash flow hedge | — | | | — | | | (69.8) | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| Cash dividends paid | (497.9) | | | (465.0) | | | (462.5) | | | |
| Issuance of common stock | 112.5 | | | — | | | — | | | |
| Repurchase of common stock | — | | | — | | | (1,628.7) | | | |
| Other financing activities | (3.6) | | | (7.5) | | | (2.4) | | | |
| Cash Flows used in Financing Activities | (581.9) | | | (292.5) | | | (558.4) | | | |
| NET CHANGE IN CASH AND CASH EQUIVALENTS | (3.5) | | | (0.6) | | | (95.5) | | | |
| CASH AND CASH EQUIVALENTS: | | | | | | | |
| Beginning of period | 11.0 | | | 11.6 | | | 107.1 | | | |
| End of period | $ | 7.5 | | | $ | 11.0 | | | $ | 11.6 | | | |
The accompanying Notes to Financial Statements of Parent Company are an integral part of these statements.180
| string | null | null |
Net earnings attributable to noncontrolling interest | 13 | SEC-NUM |
[Table of Contents](#ia72a687f7b8a4bb1b43219ab5b663314_7)related assets and liabilities) attributable to periods prior to, at and after Envista’s separation from Danaher and govern certain relationships between Danaher and Envista after the Envista Separation. In addition, Danaher is also party to various commercial agreements with Envista entities. The amounts paid and received by Danaher for transition services provided under the above agreements as well as sales and purchases to and from Envista were not material to the Company’s results of operations for the years ended December 31, 2021, 2020 and 2019.The key components of income from Envista from discontinued operations for the year ended December 31, 2019 were as follows ($ in millions):
| | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | |
| | | | | | |
| Sales | | | | | $ | 2,610 | |
| Cost of sales | | | | | (1,177) | |
| Selling, general and administrative expenses | | | | | (1,095) | |
| Research and development expenses | | | | | (152) | |
| Other income (expense), net | | | | | 2 | |
| Interest expense | | | | | (9) | |
| Income from discontinued operations before income taxes | | | | | 179 | |
| Gain on disposition of Envista before income taxes | | | | | 451 | |
| Earnings from discontinued operations before income taxes | | | | | 630 | |
| Income taxes | | | | | (41) | |
| Earnings from discontinued operations, net of income taxes | | | | | 589 | |
| Net earnings attributable to noncontrolling interest | | | | | (13) | |
| Net earnings from discontinued operations attributable to common stockholders | | | | | $ | 576 | |
NOTE 4. NET EARNINGS PER COMMON SHARE FROM CONTINUING OPERATIONS Basic net earnings per share from continuing operations (“EPS”) is calculated by taking net earnings from continuing operations less the MCPS dividends divided by the weighted average number of common shares outstanding for the applicable period. Diluted net EPS from continuing operations is computed by taking net earnings from continuing operations plus the interest accrued on the Company’s LYONs (prior to their redemption in January 22, 2021) less the MCPS dividends divided by the weighted average number of common shares outstanding increased by the number of additional shares that would have been outstanding had the potentially dilutive common shares been issued and reduced by the number of shares the Company could have repurchased with the proceeds from the issuance of the potentially dilutive shares. For the years ended December 31, 2021 and 2019, no options to purchase shares were excluded from the diluted earnings per share calculation. For the year ended December 31, 2020, 1 million options to purchase shares were excluded from the diluted earnings per share calculation, as the impact of their inclusion would have been anti-dilutive. Basic and diluted EPS are computed independently for each quarter and annual period, which involves the use of different weighted-average share count figures relating to quarterly and annual periods. As a result, and after factoring the effect of rounding to the nearest cent per share, the sum of prior quarter-to-date EPS figures may not equal annual EPS.The impact of the MCPS Series A calculated under the if-converted method was dilutive for the year ended December 31, 2021, and as such 11.0 million shares underlying the MCPS Series A were included in the calculation of diluted EPS for the year ended December 31, 2021 and the related MCPS Series A dividends of $78 million were excluded from the calculation of net earnings for diluted EPS for the period. The impact of the MCPS Series B calculated under the if-converted method was anti-dilutive for the year ended December 31, 2021, and as such 8.6 million shares underlying the MCPS Series B were excluded from the diluted EPS calculation for the year ended December 31, 2021 and the related MCPS Series B dividends of $86 million were included in the calculation of net earnings for diluted EPS for the period. The impact of the MCPS Series A and Series B calculated under the if-converted method was anti-dilutive for the years ended December 31, 2020 and 2019, and as such, 17.1 million and 10.0 million shares, respectively, underlying the MCPS Series A and Series B were excluded from the calculation of diluted EPS and the related MCPS Series A and Series B dividends of $136 million and $68 million, respectively, were included in the calculation of net earnings for diluted EPS for the period. 77
| string | null | null |
Discount rate (as a percent) | 5.7 | SEC-NUM |
| | | | | | |
| --- | --- | --- | --- | --- | --- |
| | | | | | |
| FINANCIAL STATEMENTS | EMPLOYEE BENEFIT PLANS |
15. EMPLOYEE BENEFIT PLANSDEFINED BENEFIT RETIREMENT PLANSDuke Energy and certain subsidiaries maintain, and the Subsidiary Registrants participate in, qualified and non-qualified, non-contributory defined benefit retirement plans. Duke Energy's policy is to fund amounts on an actuarial basis to provide assets sufficient to meet benefit payments to be paid to plan participants.The following table includes information related to the Duke Energy Registrants' contributions to its qualified defined benefit pension plans.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Nine Months Ended September 30, 2022 |
| | | | Duke | | | Duke | | Duke | | Duke | | Duke | | |
| | Duke | | Energy | | Progress | Energy | | Energy | | Energy | | Energy | | |
| (in millions) | Energy | | Carolinas | | Energy | Progress | | Florida | | Ohio | | Indiana | | Piedmont |
| Contributions made | $ | 58 | | | $ | 15 | | | $ | 13 | | $ | 8 | | | $ | 5 | | | $ | 3 | | | $ | 5 | | | $ | 2 | |
Duke Energy uses a December 31 measurement date for its qualified non-contributory defined benefit retirement plan assets and obligations. However, because Duke Energy believes it is probable in 2022 that total lump-sum benefit payments will exceed the settlement threshold, which is defined as the sum of the service cost and interest cost on projected benefit obligation components of net periodic pension costs, Duke Energy remeasured the plan assets and plan obligations associated with one of its qualified pension plans as of September 30, 2022. The discount rate used for the remeasurement was 5.7% as of September 30, 2022. The cash balance interest crediting rate was 4.5% as of September 30, 2022. The interest rate for lump sum and annuity conversions was updated to reflect current market conditions. All other assumptions used for the September 30, 2022, remeasurement were consistent with the measurement as of December 31, 2021.As a result of the remeasurement, Duke Energy recognized a remeasurement loss of $276 million, of which $266 million was recorded in Regulatory Assets within Other Noncurrent Assets and $10 million was recorded in Accumulated Other Comprehensive Loss within the Condensed Consolidated Balance Sheets as of September 30, 2022. The remeasurement loss, which represents a decrease in funded status, reflects a decrease of $1,198 million in the fair value of plan assets and a decrease of $922 million in the projected benefit obligation. As the result of settlement accounting, Duke Energy recognized settlement charges of $66 million, of which $55 million was recorded to Regulatory Assets within Other Noncurrent Assets on the Condensed Consolidated Balance Sheets and $11 million was recorded to Other Income and Expenses, net, within the Condensed Consolidated Statement of Operations as of September 30, 2022. Settlement charges recognized by the Subsidiary Registrants as of September 30, 2022, were $28 million for Duke Energy Carolinas, $16 million for Duke Energy Progress, $5 million for Duke Energy Florida, $4 million for Duke Energy Indiana, $2 million for Duke Energy Ohio and $11 million for Piedmont. QUALIFIED PENSION PLANSThe following tables include the components of net periodic pension costs for qualified pension plans.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, 2022 |
| | | | Duke | | | | Duke | | Duke | | Duke | | Duke | | |
| | Duke | | Energy | | Progress | | Energy | | Energy | | Energy | | Energy | | |
| (in millions) | Energy | | Carolinas | | Energy | | Progress | | Florida | | Ohio | | Indiana | | Piedmont |
| Service cost | $ | 39 | | | $ | 12 | | | $ | 11 | | | $ | 6 | | | $ | 4 | | | $ | 1 | | | $ | 3 | | | $ | 1 | |
| Interest cost on projected benefit obligation | 58 | | | 14 | | | 19 | | | 9 | | | 10 | | | 3 | | | 4 | | | 2 | |
| Expected return on plan assets | (140) | | | (38) | | | (46) | | | (22) | | | (24) | | | (6) | | | (9) | | | (6) | |
| Amortization of actuarial loss | 24 | | | 5 | | | 6 | | | 3 | | | 3 | | | 2 | | | 3 | | | 2 | |
| Amortization of prior service credit | (5) | | | (1) | | | — | | | — | | | — | | | — | | | — | | | (2) | |
| Amortization of settlement charges | 14 | | | 3 | | | 5 | | | 4 | | | 1 | | | 2 | | | 1 | | | 2 | |
| Net periodic pension costs | $ | (10) | | | $ | (5) | | | $ | (5) | | | $ | — | | | $ | (6) | | | $ | 2 | | | $ | 2 | | | $ | (1) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, 2021 |
| | | | Duke | | | | Duke | | Duke | | Duke | | Duke | | |
| | Duke | | Energy | | Progress | | Energy | | Energy | | Energy | | Energy | | |
| (in millions) | Energy | | Carolinas | | Energy | | Progress | | Florida | | Ohio | | Indiana | | Piedmont |
| Service cost | $ | 43 | | | $ | 14 | | | $ | 13 | | | $ | 7 | | | $ | 5 | | | $ | 2 | | | $ | 2 | | | $ | 1 | |
| Interest cost on projected benefit obligation | 55 | | | 13 | | | 17 | | | 8 | | | 10 | | | 2 | | | 5 | | | 2 | |
| Expected return on plan assets | (139) | | | (36) | | | (47) | | | (21) | | | (25) | | | (7) | | | (10) | | | (5) | |
| Amortization of actuarial loss | 33 | | | 7 | | | 10 | | | 5 | | | 5 | | | 2 | | | 3 | | | 2 | |
| Amortization of prior service credit | (7) | | | (2) | | | (1) | | | — | | | (1) | | | — | | | — | | | (1) | |
| Amortization of settlement charges | 2 | | | 1 | | | 1 | | | — | | | — | | | — | | | — | | | 1 | |
| Net periodic pension costs | $ | (13) | | | $ | (3) | | | $ | (7) | | | $ | (1) | | | $ | (6) | | | $ | (1) | | | $ | — | | | $ | — | |
88
| string | null | null |
Cash payment from working capital adjustment | 2.5 | SEC-NUM |
[Table of Contents](#i4552998170a04ab690e0e4bebd2d8dfd_7)
FMC CORPORATIONNotes to Condensed Consolidated Financial Statements (unaudited) — (Continued)
| | | | | | |
| --- | --- | --- | --- | --- | --- |
| | | | | | |
| Preliminary Purchase Price Allocation as of July 19, 2022 |
| (in Millions) | |
| Fair Value of Assets Acquired | |
| Cash | $ | 10.0 | |
| Intangible assets | |
| Developed Technology (1) | 66.3 | |
| In-process research & development | 10.5 | |
| Goodwill | 130.7 | |
| Other Assets | 3.4 | |
| Total Assets | $ | 220.9 | |
| Fair Value of Liabilities Assumed | |
| Deferred income tax liabilities | $ | 16.6 | |
| Other Liabilities | 1.1 | |
| Total Liabilities | 17.7 | |
| Net Assets | $ | 203.2 | |
| | |
| Total Purchase Consideration: | Amount |
| Cash purchase price, net of acquired cash | $ | 193.2 | |
| Cash payment from working capital adjustment (2) | 2.5 | |
| Cash purchase price paid during the third quarter 2022 | $ | 190.7 | |
| \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ | |
| (1) Expected life is 15 years and will be amortized based on the pattern of economic benefit | |
| (2) Payment made October 3, 2022 | |
Note 6: Receivables The following table displays a roll forward of the allowance for doubtful trade receivables.
| | | | | | |
| --- | --- | --- | --- | --- | --- |
| | | | | | |
| (in Millions) | |
| Balance, December 31, 2020 | $ | 27.9 | |
| Additions - charged to expense | 17.2 | |
| Transfer from (to) allowance for credit losses (see below) | (0.6) | |
| Net recoveries, write-offs and other | (7.1) | |
| Balance, December 31, 2021 | $ | 37.4 | |
| Additions - charged to expense | (0.9) | |
| Transfer from (to) allowance for credit losses (see below) | 0.5 | |
| Net recoveries, write-offs and other | (2.5) | |
| Balance, September 30, 2022 | $ | 34.5 | |
We have non-current receivables that represent long-term customer receivable balances related to past due accounts which are not expected to be collected within the current year. The net long-term customer receivables were $64.6 million as of September 30, 2022. These long-term customer receivable balances and the corresponding allowance are included in "Other assets including long-term receivables, net" on the condensed consolidated balance sheets.
25
| string | null | null |
Cost to modify start date of swap | 8,239 | SEC-NUM |
INVITATION HOMES INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(dollar amounts in thousands)
The table below summarizes our interest rate swap instruments as of December 31, 2021:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Agreement Date | | ForwardEffective Date | | MaturityDate | | StrikeRate | | Index | | NotionalAmount |
| April 19, 2018 | | January 31, 2019 | | January 31, 2025 | | 2.86% | | One month LIBOR | | $ | 400,000 | |
| February 15, 2019 | | March 15, 2019 | | March 15, 2022 | | 2.23% | | One month LIBOR | | 800,000 | |
| April 19, 2018 | | March 15, 2019 | | November 30, 2024 | | 2.85% | | One month LIBOR | | 400,000 | |
| April 19, 2018 | | March 15, 2019 | | February 28, 2025 | | 2.86% | | One month LIBOR | | 400,000 | |
| May 8, 2018 | | March 9, 2020 | | June 9, 2025 | | 2.99% | | One month LIBOR | | 325,000 | |
| May 8, 2018 | | June 9, 2020 | | June 9, 2025 | | 2.99% | | One month LIBOR | | 595,000 | |
| June 28, 2018 | | August 7, 2020 | | July 9, 2025 | | 2.90% | | One month LIBOR | | 1,100,000 | |
| December 9, 2019 | | July 15, 2021 | | November 30, 2024 | | 2.90% | | One month LIBOR | | 400,000 | |
| November 7, 2018 | | March 15, 2022 | | July 31, 2025 | | 3.14% | | One month LIBOR | | 400,000 | |
| November 7, 2018 | | March 15, 2022 | | July 31, 2025 | | 3.16% | | One month LIBOR | | 400,000 | |
During the years ended December 31, 2021 and 2020, we terminated interest rate swaps and paid the counterparties $20,798 and $15,249, respectively, in connection with these terminations. During the year ended December 31, 2019, we modified the start date of an interest rate swap and paid the counterparty $8,239 in connection with the modification.During the years ended December 31, 2021, 2020, and 2019, such derivatives were used to hedge the variable cash flows associated with existing variable-rate interest payments. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on our variable-rate debt. During the next 12 months, we estimate that $115,770 will be reclassified to earnings as an increase in interest expense.During the year ended December 31, 2020, we accelerated the reclassification of certain amounts in other comprehensive income to earnings as a result of a portion of the hedged forecasted transactions becoming probable not to occur. The accelerated amounts represented a loss of $3,111 and were recorded as interest expense in the accompanying consolidated statement of operations for the year ended December 31, 2020. We did not accelerate the reclassification of any amounts in other comprehensive income to earnings during the years ended December 31, 2021 and 2019.Non-Designated HedgesConcurrent with entering into certain of the mortgage loan agreements and in connection with previous mergers, we entered into or acquired and maintain interest rate cap agreements with terms and notional amounts equivalent to the terms and amounts of the mortgage loans made by the third party lenders. Currently, each of our cap agreements is indexed to one month LIBOR, which is set to expire on June 30, 2023. We will work with the counterparties to our cap agreements to adjust each floating rate to a comparable or successor rate. To the extent that the maturity date of one or more of the mortgage loans is extended through an exercise of one or more extension options, replacement or extension interest rate cap agreements must be executed with terms similar to those associated with the initial interest rate cap agreements and strike prices equal to the greater of the interest rate cap strike price and the interest rate at which the debt service coverage ratio (as defined) is not less than 1.2 to 1.0. The interest rate cap agreements, including all of our rights to payments owed by the counterparties and all other rights, have been pledged as additional collateral for the mortgage loans. Additionally, in certain instances, in order to minimize the cash impact of purchasing required interest rate caps, we simultaneously sell interest rate caps (which have identical terms and notional amounts) such that the purchase price and sales proceeds of the related interest rate caps are intended to offset each other. The purchased and sold interest rate caps have strike prices ranging from approximately 3.75% to 7.56%.F-32
| string | null | null |
Shares reserved for future issuance (in shares) | 0.7 | SEC-NUM |
market condition will affect the number of shares granted (as the market condition only affects shares granted in excess of certain financial performance targets), and our expectation of achieving the financial performance targets.In February 2021, we reserved a maximum of 0.7 million restricted shares for potential issuance as performance-based restricted shares to certain of our employees. The number of shares ultimately granted under this award is based on our actual financial performance as compared to financial performance targets set by our Board and the Compensation Committee for the year ending December 31, 2021, and is also subject to a market condition reduction based on how our 2021 total stockholder return, or TSR, compared to that of the S&P 500 Index. In 2021, a TSR share reduction was required to reflect that the S&P 500 Index TSR outperformed ours. Based on our actual 2021 financial performance as compared to the 2021 financial performance level thresholds, and as adjusted for the TSR haircut, 0.5 million restricted shares were awarded, which resulted in $58 million in compensation expenses that will be expensed over the three-year accelerated vesting period, including $32 million expensed during 2021.The following is a summary of nonvested restricted shares under all plans discussed above:
| | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | |
| | Number of Restricted Stock Shares(in thousands) | | Weighted Average Grant-Date Fair Value per Share |
| Nonvested at January 1, 2019 | 4,470 | | $60.56 |
| Granted | 1,758 | | 75.75 | |
| Vested | (2,269) | | 57.92 | |
| Forfeited | (231) | | 67.66 | |
| Nonvested at December 31, 2019 | 3,728 | | 68.87 | |
| Granted | 1,697 | | 91.83 | |
| Vested | (2,035) | | 65.21 | |
| Forfeited | (154) | | 79.24 | |
| Nonvested at December 31, 2020 | 3,236 | | 82.73 | |
| Granted | 1,679 | | 115.28 | |
| Vested | (1,619) | | 78.07 | |
| Forfeited | (169) | | 101.47 | |
| Nonvested at December 31, 2021 | 3,127 | | 101.62 | |
| | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | |
| | | Year Ended December 31, |
| | | 2021 | | 2020 | | 2019 |
| Time-based restricted stock units granted (in thousands) (1) | | 1,196 | | 910 | | 997 |
| Total fair value of restricted stock vested under all restricted stock plans (in millions) | | $ | 184 | | | $ | 194 | | | $ | 173 | |
(1) The remaining shares granted are performance-based.Performance-based restricted shares have been presented in the table above to reflect the actual shares issued based on the achievement of past performance targets, also considering the impact of any market conditions. Non-vested performance-based restricted shares granted are presented in the table above at the target number of restricted shares that would vest if the performance targets are met. As of December 31, 2021, there were $161 million in total unrecognized compensation costs related to time-based and performance-based restricted stock. These costs are expected to be recognized over a weighted-average period of 1.5 years as the restricted stock vests. Employee Stock Purchase PlanWe offer our employees participation in our ESPP, under which we have reserved and may sell up to 25 million shares of our common stock to employees. The ESPP grants participating employees the right to acquire our stock in increments of 1% of eligible pay, with a maximum contribution of 25% of eligible pay, subject to applicable annual Internal Revenue Service, or IRS, limitations. Under our ESPP, participating employees are limited to $25,000 of common stock annually, and a maximum of 1,250 shares of common stock each offering period. There are two offering periods each year, from January 1st (or the first trading day thereafter) through June 30th (or the last trading day prior to such date) and from July 1st (or the first trading day thereafter) through December 31st (or the last trading day prior to such date). The purchase price per share of common stock is 85% of the lesser of the fair market value of the stock on the first or the last trading 120
| string | null | null |
Annual maturities of long-term debt, 2026 | 3 | SEC-NUM |
CAESARS ENTERTAINMENT, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)proceeds received for the cost to replace damaged property were in excess of the respective carrying value of the assets. The property will remain closed until the second half of 2022 when construction of a new land-based casino is expected to be complete.Note 12. Long-Term Debt
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | December 31, 2021 | | December 31, 2020 |
| (Dollars in millions) | Final Maturity | | Rates | | Face Value | | Book Value | | Book Value |
| Secured Debt | | | | | | | | | |
| Baltimore Revolving Credit Facility | 2022 | | variable | | $ | — | | | $ | — | | | $ | — | |
| CRC Revolving Credit Facility | 2022 | | variable | | — | | | — | | | — | |
| Baltimore Term Loan | 2024 | | variable | | 282 | | | 275 | | | — | |
| CRC Term Loan | 2024 | | variable | | 4,512 | | | 4,190 | | | 4,133 | |
| CEI Revolving Credit Facility | 2025 | | variable | | — | | | — | | | — | |
| CRC Incremental Term Loan | 2025 | | variable | | 1,778 | | | 1,705 | | | 1,707 | |
| CRC Senior Secured Notes | 2025 | | 5.75% | | 1,000 | | | 985 | | | 981 | |
| CEI Senior Secured Notes | 2025 | | 6.25% | | 3,400 | | | 3,346 | | | 3,333 | |
| Convention Center Mortgage Loan | 2025 | | 7.85% | | 400 | | | 399 | | | 397 | |
| Unsecured Debt | | | | | | | | | |
| 5% Convertible Notes | 2024 | | 5.00% | | — | | | — | | | 288 | |
| CRC Notes | 2025 | | 5.25% | | — | | | — | | | 1,499 | |
| CEI Senior Notes | 2027 | | 8.125% | | 1,700 | | | 1,673 | | | 1,768 | |
| Senior Notes | 2029 | | 4.625% | | 1,200 | | | 1,183 | | | — | |
| Special Improvement District Bonds | 2037 | | 4.30% | | 49 | | | 49 | | | 51 | |
| Long-term notes and other payables | | | | | 2 | | | 2 | | | 2 | |
| Total debt | | 14,323 | | | 13,807 | | | 14,159 | |
| Current portion of long-term debt | | (70) | | | (70) | | | (67) | |
| Deferred finance charges associated with the CEI Revolving Credit Facility | | — | | | (15) | | | (19) | |
| Long-term debt | | $ | 14,253 | | | $ | 13,722 | | | $ | 14,073 | |
| | | | | | | |
| Unamortized premiums, discounts and deferred finance charges | | | | $ | 531 | | | $ | 883 | |
| Fair value | | $ | 14,713 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Annual Estimated Debt Service Requirements | | | | |
| | Years Ended December 31, | | | | |
| (In millions) | 2022 | | 2023 | | 2024 | | 2025 | | 2026 | | Thereafter | | Total |
| Annual maturities of long-term debt | $ | 70 | | | $ | 70 | | | $ | 4,714 | | | $ | 6,526 | | | $ | 3 | | | $ | 2,940 | | | $ | 14,323 | |
| Estimated interest payments | 770 | | | 790 | | | 790 | | | 540 | | | 200 | | | 320 | | | 3,410 | |
| Total debt service obligation (a) | $ | 840 | | | $ | 860 | | | $ | 5,504 | | | $ | 7,066 | | | $ | 203 | | | $ | 3,260 | | | $ | 17,733 | |
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_(a)Debt principal payments are estimated amounts based on contractual maturity and repayment dates. Interest payments are estimated based on the forward-looking LIBOR curve, where applicable, and include the estimated impact of the four interest rate swap agreements related to our CRC Credit Facility (see Note 8). Actual payments may differ from these estimates.Current Portion of Long-Term DebtThe current portion of long-term debt as of December 31, 2021 includes the principal payments on the term loans, other unsecured borrowings, and special improvement district bonds that are contractually due within 12 months. The Company may, from time to time, seek to repurchase its outstanding indebtedness. Any such purchases may be funded by existing cash balances or the incurrence of debt. The amount and timing of any repurchase will be based on business and market conditions, capital availability, compliance with debt covenants and other considerations.[Table of Contents](#i37dfc5eabc12461dbfc5ef573d80947e_7)96
| string | null | null |
Exercised (in number of options/units) | 11,527,957 | SEC-NUM |
[Table of Contents](#i43d04c9d26874e33802bdf64c458414a_7)Stock-Based Compensation Cost. Compensation cost charged against earnings for stock-based awards for the years ended December 31 follows:
| | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | |
| | 2021 | | 2020 | | 2019 | |
| Selling, general and administrative expenses | $ | 64 | | | $ | 70 | | | $ | 48 | | |
| Production and delivery | 34 | | | 29 | | | 15 | | |
| | | | | | | |
| Total stock-based compensation | 98 | | | 99 | | | 63 | | |
| | | | | | | |
| Tax benefit and noncontrolling interests’ sharea | (5) | | | (5) | | | (4) | | |
| Impact on net income (loss) | $ | 93 | | | $ | 94 | | | $ | 59 | | |
a. Charges in the U.S. are not expected to generate a future tax benefit.
Stock Options. Stock options granted under the plans generally expire 10 years after the date of grant. Stock options vest in one-third annual increments beginning one year from the date of grant. The award agreements provide that participants will receive the following year’s vesting upon retirement. Therefore, on the date of grant, FCX accelerates one year of amortization for retirement-eligible employees. The award agreements also provide for accelerated vesting upon certain qualifying terminations of employment within one year following a change of control.
A summary of stock options outstanding as of December 31, 2021, and activity during the year ended December 31, 2021, follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Number ofOptions | | Weighted-AverageExercise PricePer Share | | Weighted-AverageRemainingContractualTerm (years) | | AggregateIntrinsicValue | |
| Balance at January 1 | 37,100,098 | | | $ | 25.58 | | | | | | |
| Granted | 598,000 | | | 28.14 | | | | | | |
| Exercised | (11,527,957) | | | 19.48 | | | | | | |
| Expired/Forfeited | (4,347,579) | | | 51.15 | | | | | | |
| Balance at December 31 | 21,822,562 | | | 23.78 | | | 4.3 | | $ | 411 | | |
| | | | | | | | | |
| Vested and exercisable at December 31 | 17,119,081 | | | 26.62 | | | 3.4 | | $ | 278 | | |
The fair value of each stock option is estimated on the date of grant using the Black-Scholes-Merton option valuation model. Expected volatility is based on implied volatilities from traded options on FCX’s common stock and historical volatility of FCX’s common stock. FCX uses historical data to estimate future option exercises, forfeitures and expected life. When appropriate, separate groups of employees who have similar historical exercise behavior are considered separately for valuation purposes. The expected dividend rate is calculated using the expected annual dividend at the date of grant. The risk-free interest rate is based on Federal Reserve rates in effect for bonds with maturity dates equal to the expected term of the option.
Information related to stock options during the years ended December 31 follows:
| | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | |
| | 2021 | | 2020 | | 2019 | |
| Weighted-average assumptions used to value stock option awards: | | | | | | |
| Expected volatility | 58.1 | % | | 47.7 | % | | 47.8 | % | |
| Expected life of options (in years) | 5.90 | | 5.83 | | 6.10 | |
| Expected dividend rate | 2.5 | % | | 1.7 | % | | 1.8 | % | |
| Risk-free interest rate | 0.6 | % | | 1.5 | % | | 2.5 | % | |
| Weighted-average grant-date fair value (per option) | $ | 11.92 | | | $ | 4.72 | | | $ | 4.87 | | |
| Intrinsic value of options exercised | $ | 194 | | | $ | 82 | | | $ | 3 | | |
| Fair value of options vested | $ | 16 | | | $ | 28 | | | $ | 26 | | |
As of December 31, 2021, FCX had $5 million of total unrecognized compensation cost related to unvested stock options expected to be recognized over a weighted-average period of approximately 1.0 years.
Stock-Settled PSUs and RSUs. Beginning in 2014, FCX’s executive officers received annual grants of PSUs that vest after three years. The total grant date target shares related to the PSU grants were 0.7 million for 2019, 0.8 million for 2020 and 0.3 million for 2021, of which the executive officers will earn (i) between 0 percent and 200 140
| string | null | null |
Percentage of potential target shares | 200 | SEC-NUM |
AMERICAN TOWER CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(tabular amounts in millions, unless otherwise noted)when they would have been available under the CoreSite plan, or March 20, 2023, at which time they will no longer be available for grant. In addition, the Company maintains an employee stock purchase plan (the “ESPP”) pursuant to which eligible employees may purchase shares of the Company’s common stock on the last day of each bi-annual offering period at a 15% discount from the lower of the closing market value on the first or last day of such offering period. The offering periods run from June 1 through November 30 and from December 1 through May 31 of each year.During the three and nine months ended September 30, 2022 and 2021, the Company recorded the following stock-based compensation expense in selling, general, administrative and development expense:
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended September 30, | | Nine Months Ended September 30, |
| | | 2022 | | 2021 | | 2022 | | 2021 |
| Stock-based compensation expense | | $ | 39.2 | | | $ | 28.1 | | | $ | 138.1 | | | $ | 98.0 | |
| | | | | | | | | |
| | | | | | | | | |
Stock Options—As of September 30, 2022, there was no unrecognized compensation expense related to unvested stock options.The Company’s option activity for the nine months ended September 30, 2022 was as follows (shares disclosed in full amounts):
| | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | |
| | | Number of Options |
| Outstanding as of January 1, 2022 | | 1,067,999 | |
| | | |
| Exercised | | (157,168) | |
| Forfeited | | — | |
| Expired | | — | |
| Outstanding as of September 30, 2022 | | 910,831 | |
Restricted Stock Units—As of September 30, 2022, total unrecognized compensation expense related to unvested RSUs granted under the 2007 Plan, including the CoreSite Replacement Awards (as defined below), was $199.7 million and is expected to be recognized over a weighted average period of approximately two years. Vesting of RSUs is subject generally to the employee’s continued employment or death, disability or qualified retirement (each as defined in the applicable RSU award agreement). In December 2021, in connection with the CoreSite Acquisition, the Company assumed and converted certain equity awards previously granted by CoreSite under its equity plan into corresponding equity awards with respect to shares of the Company’s common stock (the “CoreSite Replacement Awards”). As of September 30, 2022, total unrecognized compensation expense related to the CoreSite Replacement Awards was $9.8 million and is expected to be recognized over a weighted average period of approximately one year. Performance-Based Restricted Stock Units—During the nine months ended September 30, 2022, the Company’s Compensation Committee (the “Compensation Committee”) granted an aggregate of 98,542 PSUs (the “2022 PSUs”) to its executive officers and established the performance metrics for these awards. During the years ended December 31, 2021 and 2020, the Compensation Committee granted an aggregate of 98,694 PSUs (the “2021 PSUs”) and 110,925 PSUs (the “2020 PSUs”), respectively, to its executive officers and established the performance metrics for these awards. During the year ended December 31, 2020, in connection with the retirement of the Company’s former Chief Executive Officer, an aggregate of 40,186 shares underlying the 2020 PSUs were forfeited, which included the target number of shares issuable at the end of the three-year performance period for such executive’s 2020 PSUs. Threshold, target and maximum parameters were established for the metrics for a three-year performance period with respect to each of the 2022 PSUs, the 2021 PSUs and the 2020 PSUs and will be used to calculate the number of shares that will be issuable when each award vests, which may range from zero to 200% of the target amounts. At the end of each three-year performance period, the number of shares that vest will depend on the degree of achievement against the pre-established performance goals. PSUs will be paid out in common stock at the end of each performance period, subject generally to the executive’s continued employment or death, disability or qualified retirement (each as defined in the applicable PSU award agreement). PSUs will accrue dividend equivalents prior to vesting, which will be paid out only in respect of shares that actually vest. 19
| string | null | null |
Pretax percentage increase allowance for credit losses | 29 | SEC-NUM |
ACCOUNTING CHANGES
Accounting for Deposit Insurance ExpensesDuring the fourth quarter of 2021, Citi changed its presentation of accounting for deposit insurance costs paid to the Federal Deposit Insurance Corporation (FDIC) and similar foreign regulators. These costs were previously presented within Interest expense and, as a result of this change, are now presented within Other operating expenses. Citi concluded that this presentation was preferable in Citi’s circumstances, as it better reflected the nature of these deposit insurance costs in that these costs do not directly represent interest payments to creditors, but are similar in nature to other payments to regulatory agencies that are accounted for as operating expenses.This change in income statement presentation represents a “change in accounting principle” under ASC Topic 250, Accounting Changes and Error Corrections, with retrospective application to the earliest period presented. This change in accounting principle resulted in a reclassification of $1,207 million, $1,203 million and $781 million of deposit insurance expenses from Interest expense to Other operating expenses, for the years ended December 31, 2021, 2020 and 2019, respectively. This change had no impact on Citi’s net income or the total deposit insurance expense incurred by Citi.
Accounting for Financial Instruments—Credit Losses
OverviewIn June 2016, the Financial Accounting Standards Board (FASB) issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326). The ASU introduced a new credit loss methodology, the CECL methodology, which requires earlier recognition of credit losses while also providing additional disclosure about credit risk. Citi adopted the ASU as of January 1, 2020, which, as discussed below, resulted in an increase in Citi’s Allowance for credit losses and a decrease to opening Retained earnings, net of deferred income taxes, at January 1, 2020.The CECL methodology utilizes a lifetime “expected credit loss” measurement objective for the recognition of credit losses for loans, HTM debt securities, receivables and other financial assets measured at amortized cost at the time the financial asset is originated or acquired. The ACL is adjusted each period for changes in lifetime expected credit losses. The CECL methodology represents a significant change from prior U.S. GAAP and replaced the prior multiple existing impairment methods, which generally required that a loss be incurred before it was recognized. Within the life cycle of a loan or other financial asset, the methodology generally results in the earlier recognition of the provision for credit losses and the related ACL than prior U.S. GAAP. For available-for-sale debt securities where fair value is less than cost that Citi intends to hold or more-likely-than-not will not be required to sell, credit-related impairment, if any, is recognized through an ACL and adjusted each period for changes in credit risk.
January 1, 2020 CECL Transition (Day 1) ImpactThe CECL methodology’s impact on expected credit losses, among other things, reflects Citi’s view of the current state of the economy, forecasted macroeconomic conditions and quality of Citi’s portfolios. At the January 1, 2020 date of adoption, based on forecasts of macroeconomic conditions and exposures at that time, the aggregate impact to Citi was an approximate $4.1 billion, or an approximate 29%, pretax increase in the Allowance for credit losses, along with a $3.1 billion after-tax decrease in Retained earnings and a deferred tax asset increase of $1.0 billion. This transition impact reflects (i) a $4.9 billion build to the Allowance for credit losses for Citi’s consumer exposures, primarily driven by the impact on credit card receivables of longer estimated tenors under the CECL lifetime expected credit loss methodology (loss coverage of approximately 23 months) compared to shorter estimated tenors under the probable loss methodology under prior U.S. GAAP (loss coverage of approximately 14 months), net of recoveries; and (ii) a release of $0.8 billion of reserves primarily related to Citi’s corporate net loan loss exposures, largely due to more precise contractual maturities that result in shorter remaining tenors, incorporation of recoveries and use of more specific historical loss data based on an increase in portfolio segmentation across industries and geographies.Under the CECL methodology, the Allowance for credit losses consists of quantitative and qualitative components. Citi’s quantitative component of the Allowance for credit losses is model based and utilizes a single forward-looking macroeconomic forecast and discounts inputs for the corporate classifiably managed portfolios, complemented by the qualitative component described below, in estimating expected credit losses and discounts inputs for the corporate classifiably managed portfolios. Reasonable and supportable forecast periods vary by product. For example, Citi’s consumer models use a 13-quarter reasonable and supportable period and revert to historical loss experience thereafter, while its corporate loan models use a nine-quarter reasonable and supportable period followed by a three-quarter graduated transition to historical loss experience.The qualitative management adjustment component includes, among other things, management adjustments to reflect economic uncertainty based on the likelihood and severity of downside scenarios and certain portfolio characteristics not captured in the quantitative component, such as concentrations, collateral coverage, model limitations, idiosyncratic events and other factors as required by banking supervisory guidance for the ACL. The qualitative management adjustment component also includes management adjustments to reflect the uncertainty around the estimated impact of the pandemic on credit loss estimates.
Accounting for Variable Post-Charge-Off Third-Party Collection CostsDuring the second quarter of 2020, Citi changed its accounting for variable post-charge-off third-party collection costs, whereby these costs were accounted for as an increase in expenses as incurred rather than a reduction in expected credit recoveries. Citi concluded that such a change in the method of accounting is preferable in Citi’s circumstances as it better 156
| string | null | null |
Number of former MGPs | 23 | SEC-NUM |
[Table of Contents](#iedef37dc53354d4baa10c50c5095e29f_25)Corporation, under a parent guaranty it provided in the contract. TAES has not provided a comprehensive plan or otherwise met its performance obligations.In order to enforce the contract, Consumers and DTE Electric filed a complaint against TAES and Toshiba Corporation in the U.S. District Court for the Eastern District of Michigan in April 2022. In June 2022, TAES and Toshiba Corporation filed a motion to dismiss the complaint, along with an answer and counterclaims seeking approximately $15 million in damages related to payments allegedly owed under the parties’ contract. As a co-owner of Ludington, Consumers would be liable for 51 percent of any such damages. Consumers believes the motion to dismiss and counterclaims are without merit, but cannot predict the financial impact or outcome of this matter. An unfavorable outcome could have a material adverse effect on CMS Energy’s and Consumers’ financial condition, results of operations, or liquidity.J.H. Campbell 3 Plant Retirement Contract Dispute: In May 2022, Consumers filed a complaint against Wolverine Power Supply Cooperative, Inc. in the Ottawa County Circuit Court and requested a ruling that Consumers has sole authority to decide to retire the J.H. Campbell 3 coal-fueled generating unit under the unit’s Joint Ownership and Operating Agreement. In July 2022, Wolverine Power Supply Cooperative, Inc. filed an answer, affirmative defenses, and a counterclaim seeking approximately $37 million in damages allegedly caused by Consumers’ decision to retire the unit before the end of its useful life. In July 2022, Consumers filed a motion for summary disposition, which is scheduled to be heard in August 2022. Consumers believes Wolverine Power Supply Cooperative, Inc.’s claims have no merit, but cannot predict the final impact or outcome on this matter. An unfavorable outcome could have a material adverse effect on CMS Energy’s and Consumers’ financial condition, results of operations, or liquidity. Consumers Gas Utility ContingenciesGas Environmental Matters: Consumers expects to incur remediation and other response activity costs at a number of sites under NREPA. These sites include 23 former MGP facilities. Consumers operated the facilities on these sites for some part of their operating lives. For some of these sites, Consumers has no present ownership interest or may own only a portion of the original site.At June 30, 2022, Consumers had a recorded liability of $57 million for its remaining obligations for these sites. This amount represents the present value of long-term projected costs, using a discount rate of 2.57 percent and an inflation rate of 2.5 percent. The undiscounted amount of the remaining obligation is $60 million. Consumers expects to pay the following amounts for remediation and other response activity costs during the remainder of 2022 and in each of the next five years:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| In Millions |
| | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 |
| Consumers | | | | | | | | | | | | |
| Remediation and other response activity costs | | $ | 3 | | | $ | 9 | | | $ | 24 | | | $ | 11 | | | $ | 1 | | | $ | 1 | |
Consumers periodically reviews these cost estimates. Any significant change in the underlying assumptions, such as an increase in the number of sites, changes in remediation techniques, or legal and regulatory requirements, could affect Consumers’ estimates of annual response activity costs and the MGP liability.Pursuant to orders issued by the MPSC, Consumers defers its MGP-related remediation costs and recovers them from its customers over a ten-year period. At June 30, 2022, Consumers had a regulatory asset of $107 million related to the MGP sites.67
| string | null | null |
Net proceeds | 992 | SEC-NUM |
[Table of Contents](#i300266b18f874ae1b9a15c90da441bb4_7)
0.550% Term Notes due 2023 (2023 Term Notes) and 2.550% Term Notes due 2031 (2031 Term Notes)On March 23, 2021, we issued $500 million aggregate principal amount of term notes due 2023 (2023 Term Notes) and $500 million aggregate principal amount of term notes due 2031 (2031 Term Notes, together the Term Notes). We received net proceeds from the issuance of $992 million, after deducting discounts and debt issuance costs.The 2023 and 2031 Term Notes accrue interest at a rate of 0.550% and 2.550% per annum, respectively, payable semi-annually. Interest is payable on March 23 and September 23 of each year, beginning on September 23, 2021. The 2023 Term Notes mature on March 23, 2023, and the 2031 Term Notes mature on March 23, 2031.We may redeem for cash all or any portion of the Term Notes, at our option, at any time prior to maturity. The 2023 Term Notes and, prior to December 23, 2030, the 2031 Term Notes are redeemable at make-whole premium redemption prices as defined in the applicable forms of note. After December 23, 2030, the 2031 Term Notes are redeemable at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus any accrued and unpaid interest up to, but excluding, the redemption date.Interest expense recognized on the Term Notes, which included amortization of debt discounts and issuance costs, was $4 million and $9 million in Q2 2022 and YTD 2022, respectively, and $4 million and $5 million in Q2 2021 and YTD 2021, respectively.0% Convertible Senior Notes due 2023 (2023 Convertible Notes)
| | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | |
| In millions | July 3,2022 | | January 2,2022 |
| | | | |
| | | | |
| Principal amount outstanding | $ | 750 | | | $ | 750 | |
| | | | |
| | | | |
| Unamortized debt discount and issuance costs | (4) | | | (48) | |
| | | | |
| Net carrying amount of liability component | $ | 746 | | | $ | 702 | |
| | | | |
| | | | |
| Less: current portion | (746) | | | — | |
| Convertible senior notes, non-current | $ | — | | | $ | 702 | |
| Carrying value of equity component, net of debt issuance costs | $ | — | | | $ | 126 | |
| Fair value of convertible senior notes outstanding (Level 2) | $ | 717 | | | $ | 854 | |
| | | | |
In August 2018, we issued $750 million aggregate principal amount of convertible senior notes due 2023 (2023 Convertible Notes). The 2023 Convertible Notes carry no coupon interest and mature on August 15, 2023.The 2023 Convertible Notes will be convertible into cash, shares of our common stock or a combination of cash and shares of our common stock, at our election, based on an initial conversion rate, subject to adjustment, of 2.1845 shares of common stock per $1,000 principal amount of notes (which represents an initial conversion price of approximately $457.77 per share of common stock), only in the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on September 30, 2018 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price in effect on each applicable trading day; (2) during the five business day period after any 10 consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of 2023 Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; (3) if we call any or all of the notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events described in the indenture. Regardless of the foregoing circumstances, the holders may convert their notes on or after May 15, 2023 until August 11, 2023. As such, the 2023 Convertible Notes were reclassified to short-term as of July 3, 2022. The 2023 Convertible Notes were not convertible as of July 3, 2022.
17
| string | null | null |
Concentration risk, percentage | 11 | SEC-NUM |
FOX CORPORATIONNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSof the adjustment that reflects a redemption in excess of fair value is presented within net income attributable to noncontrolling interests in the Statements of Operations.Concentrations of credit riskCash and cash equivalents are maintained with several financial institutions. The Company has deposits held with banks that exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and are maintained with financial institutions of reputable credit and, therefore, bear minimal credit risk.Generally, the Company does not require collateral to secure receivables. As of June 30, 2022, the Company had no customers that accounted for 10% or more of the Company's receivables. As of June 30, 2021, the Company had one individual customer that accounted for approximately 11% of the Company's receivables.NOTE 3. ACQUISITIONS, DISPOSALS AND OTHER TRANSACTIONSAcquisitions are accounted for under ASC 805, "Business Combinations" ("ASC 805"), which requires, among other things, that an acquirer record any noncontrolling interests in an acquiree at their acquisition date fair value.The Company's acquisitions support the Company's strategy to strengthen its core brands and to selectively enhance production capabilities for its digital and linear platforms. For these acquisitions, the initial accounting for the business combination, including the allocation of the consideration transferred, is based on provisional amounts. The amounts allocated to intangible assets and goodwill, the estimates of useful lives and the related amortization expense are subject to changes pending the completion of the final valuations of certain assets and liabilities. A change in the allocation of consideration transferred and any estimates of useful lives could result in a change in the value allocated to the intangible assets that could impact future amortization expense.Fiscal 2022 and 2021During fiscal 2022, the Company made acquisitions, primarily consisting of three entertainment production companies, for total cash consideration of approximately $240 million. During fiscal 2021, the Company made one acquisition consisting of a digital media company and disposed of its sports marketing businesses. The incremental revenues and Segment EBITDA (as defined in Note 17—Segment Information) related to the fiscal 2022 acquisitions and the fiscal 2021 acquisition and disposals, included in the Company's consolidated results of operations, were not material individually or in the aggregate. The Company finalized its purchase price accounting for the fiscal 2021 acquisition during the fourth quarter of fiscal 2022 without any material adjustments.Fiscal 2020Acquisitions and DisposalsCredible AcquisitionIn October 2019, the Company acquired 67% of the equity in Credible, a U.S. consumer finance marketplace, for approximately $260 million in cash (the "Credible Acquisition"), net of cash acquired. The remaining 33% of Credible not owned by the Company was recorded at fair value on the acquisition date based on the Company's valuation of Credible's business using a market approach (a Level 3 measurement as defined in Note 6—Fair Value). The consideration transferred of approximately $260 million has been allocated, based on a final valuation of 100% of Credible, as follows: approximately $75 million to intangible assets with useful lives ranging from five to 10 years; approximately $285 million representing goodwill; approximately $(110) million to redeemable noncontrolling interests and the remainder to other net assets. The goodwill, which is not tax deductible, reflects the increased market penetration and synergies expected from combining the operations of Credible and the Company. The Company finalized its purchase price accounting for the acquisition during the second quarter of fiscal 2021 without any material adjustments.75
| string | null | null |
Proceeds from Equity Units, net of underwriting costs and commissions, before offering expenses | 1 | SEC-NUM |
22 | Notes to Condensed Consolidated Financial Statements—(Continued) | September 30, 2022 and 2021In conjunction with the issuance of the Equity Units, the Company received approximately $1 billion in proceeds, net of underwriting costs and commissions, before offering expenses. The proceeds for the issuance of 1,043,050 shares are attributed to the Series A Preferred Stock for $838 million and $205 million for the present value of the quarterly payments due to holders of the 2024 Purchase Contracts ("Contract Adjustment Payments"). The proceeds will be used for the development of the AES renewable businesses, U.S. utility businesses, LNG infrastructure, and for other developments determined by management.The Series A Preferred Stock will initially not bear any dividends and the liquidation preference of the convertible preferred stock will not accrete. The Series A Preferred Stock has no maturity date and will remain outstanding unless converted by holders or redeemed by the Company. Holders of the shares of the convertible preferred stock will have limited voting rights.The Series A Preferred Stock is pledged as collateral to support holders’ purchase obligations under the 2024 Purchase Contracts and can be remarketed. In connection with any successful remarketing, the Company may increase the dividend rate, increase the conversion rate, and modify the earliest redemption date for the convertible preferred stock. After any successful remarketing in connection with which the dividend rate on the convertible preferred stock is increased, the Company will pay cumulative dividends on the convertible preferred stock, if declared by the board of directors, quarterly in arrears from the applicable remarketing settlement date.Holders of Corporate Units may create Treasury Units or Cash Settled Units from their Corporate Units as provided in the Purchase Contract Agreement by substituting Treasury securities or cash, respectively, for the Convertible Preferred Stock comprising a part of the Corporate Units.The Company may not redeem the Series A Preferred Stock prior to March 22, 2024. At the election of the Company, on or after March 22, 2024, the Company may redeem for cash, all or any portion of the outstanding shares of the Series A Preferred Stock at a redemption price equal to 100% of the liquidation preference, plus any accumulated and unpaid dividends.The 2024 Purchase Contracts obligate the holders to purchase, on February 15, 2024, for a price of $100 in cash, a maximum number of 57,275,962 shares of the Company’s common stock (subject to customary anti-dilution adjustments). The 2024 Purchase Contract holders may elect to settle their obligation early, in cash. The Series A Preferred Stock is pledged as collateral to guarantee the holders’ obligations to purchase common stock under the terms of the 2024 Purchase Contracts. The initial settlement rate determining the number of shares that each holder must purchase will not exceed the maximum settlement rate and is determined over a market value averaging period preceding February 15, 2024. The initial maximum settlement rate of 3.864 was calculated using an initial reference price of $25.88, equal to the last reported sale price of the Company’s common stock on March 4, 2021. As of September 30, 2022, due to the customary anti-dilution provisions, the maximum settlement rate was 3.8680, equivalent to a reference price of $25.85. If the applicable market value of the Company’s common stock is less than or equal to the reference price, the settlement rate will be the maximum settlement rate; and if the applicable market value of common stock is greater than the reference price, the settlement rate will be a number of shares of the Company’s common stock equal to $100 divided by the applicable market value. Upon successful remarketing of the Series A Preferred Stock (“Remarketed Series A Preferred Stock”), the Company expects to receive additional cash proceeds of $1 billion and issue shares of Remarketed Series A Preferred Stock.The Company pays Contract Adjustment Payments to the holders of the 2024 Purchase Contracts at a rate of 6.875% per annum, payable quarterly in arrears on February 15, May 15, August 15, and November 15, commencing on May 15, 2021. The $205 million present value of the Contract Adjustment Payments at inception reduced the Series A Preferred Stock. As each quarterly Contract Adjustment Payment is made, the related liability is reduced and the difference between the cash payment and the present value will accrete to interest expense, approximately $5 million over the three-year term. As of September 30, 2022, the present value of the Contract Adjustment Payments was $106 million.The holders can settle the purchase contracts early, for cash, subject to certain exceptions and conditions in the prospectus supplement. Upon early settlement of any purchase contracts, the Company will deliver the number of shares of its common stock equal to 85% of the number of shares of common stock that would have otherwise been deliverable.Equity Transactions with Noncontrolling Interests
| string | null | null |
Investment securities and cash collateral pledged by Huntington | 298 | SEC-NUM |
[Table of](#ib75bcbc468d84ef69c01608c63d6bb19_10) [Content](#ib75bcbc468d84ef69c01608c63d6bb19_10)Huntington enters into transactions with broker-dealers and banks for various risk management purposes. These types of transactions generally are high dollar volume. Huntington enters into collateral and master netting agreements with these counterparties, and routinely exchanges cash and high quality securities collateral. Huntington enters into transactions with customers to meet their financing, investing, payment and risk management needs. These types of transactions generally are low dollar volume. Huntington enters into master netting agreements with customer counterparties; however, collateral is generally not exchanged with customer counterparties.In addition to the customer derivative credit exposure, aggregate credit risk associated with broker-dealer and bank derivative transactions was net excess collateral of $280 million and net credit risk of $44 million at September 30, 2022 and December 31, 2021, respectively. The net credit risk associated with derivatives is calculated after considering master netting agreements and is reduced by collateral that has been pledged by the counterparty.At September 30, 2022, Huntington pledged $298 million of investment securities and cash collateral to counterparties, while other counterparties pledged $861 million of investment securities and cash collateral to Huntington to satisfy collateral netting agreements. In the event of credit downgrades, Huntington would not be required to provide additional collateral.The following tables present the gross amounts of these assets and liabilities with any offsets to arrive at the net amounts recognized in the Unaudited Condensed Consolidated Balance Sheets at September 30, 2022 and December 31, 2021.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Offsetting of Financial Assets and Derivative Assets |
| | | | | Gross amountsoffset in the unauditedcondensedconsolidatedbalance sheets | | Net amounts ofassetspresented inthe unaudited condensedconsolidatedbalance sheets | | Gross amounts not offset in theunaudited condensed consolidatedbalance sheets | | |
| (dollar amounts in millions) | | Gross amountsof recognizedassets | | | | Financialinstruments | | Cash collateralreceived | | Net amount |
| September 30, 2022 | | $ | 2,523 | | | $ | (2,104) | | | $ | 419 | | | $ | (6) | | | $ | (121) | | | $ | 292 | |
| December 31, 2021 | | 1,065 | | | (465) | | | 600 | | | (65) | | | (31) | | | 504 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Offsetting of Financial Liabilities and Derivative Liabilities |
| | | | | Gross amountsoffset in the unauditedcondensedconsolidatedbalance sheets | | Net amounts ofliabilitiespresented inthe unaudited condensedconsolidatedbalance sheets | | Gross amounts not offset in theunaudited condensed consolidatedbalance sheets | | |
| (dollar amounts in millions) | | Gross amountsof recognizedliabilities | | | | Financialinstruments | | Cash collateraldelivered | | Net amount |
| September 30, 2022 | | $ | 2,663 | | | $ | (1,460) | | | $ | 1,203 | | | $ | (79) | | | $ | (148) | | | $ | 976 | |
| December 31, 2021 | | 743 | | | (624) | | | 119 | | | (3) | | | (116) | | | — | |
15. VIEs Unconsolidated VIEsThe following tables provide a summary of the assets and liabilities included in Huntington’s Unaudited Condensed Consolidated Financial Statements, as well as the maximum exposure to losses, associated with its interests related to unconsolidated VIEs for which Huntington holds an interest in, but is not the primary beneficiary, of the VIE at September 30, 2022, and December 31, 2021:
| | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | |
| | September 30, 2022 |
| (dollar amounts in millions) | Total Assets | | Total Liabilities | | Maximum Exposure to Loss |
| Affordable Housing Tax Credit Partnerships | $ | 1,910 | | | $ | 1,169 | | | $ | 1,910 | |
| Trust Preferred Securities | 8 | | | 179 | | | — | |
| Other Investments | 522 | | | 148 | | | 522 | |
| Total | $ | 2,440 | | | $ | 1,496 | | | $ | 2,432 | |
82 Huntington Bancshares Incorporated
| string | null | null |
Auditor Firm ID | 42 | SEC-NUM |
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAINDEX TO CONSOLIDATED FINANCIAL STATEMENTS
| | | | | | |
| --- | --- | --- | --- | --- | --- |
| | | | | | |
| | |
| | Page |
| [Report of Independent Registered Public Accounting Firm (PCAOB ID:](#i7ae760e742fa4c07b35c833cddbb8fe9_52) 42[)](#i7ae760e742fa4c07b35c833cddbb8fe9_52) | [52](#i7ae760e742fa4c07b35c833cddbb8fe9_52) |
| [Consolidated Balance Sheets at December 31, 202](#i7ae760e742fa4c07b35c833cddbb8fe9_55)[1](#i7ae760e742fa4c07b35c833cddbb8fe9_55) [and](#i7ae760e742fa4c07b35c833cddbb8fe9_55) [20](#i7ae760e742fa4c07b35c833cddbb8fe9_55)[20](#i7ae760e742fa4c07b35c833cddbb8fe9_55) | [54](#i7ae760e742fa4c07b35c833cddbb8fe9_55) |
| [Consolidated Statements of Income for the Years Ended December 31, 202](#i7ae760e742fa4c07b35c833cddbb8fe9_58)[1](#i7ae760e742fa4c07b35c833cddbb8fe9_58)[,](#i7ae760e742fa4c07b35c833cddbb8fe9_58) [2020 and](#i7ae760e742fa4c07b35c833cddbb8fe9_58) [2019](#i7ae760e742fa4c07b35c833cddbb8fe9_58) | [55](#i7ae760e742fa4c07b35c833cddbb8fe9_58) |
| [Consolidated Statements of Comprehensive Income for the Years Ended December 31,](#i7ae760e742fa4c07b35c833cddbb8fe9_61) [2021,](#i7ae760e742fa4c07b35c833cddbb8fe9_61) [2020](#i7ae760e742fa4c07b35c833cddbb8fe9_61) [and](#i7ae760e742fa4c07b35c833cddbb8fe9_61) [2019](#i7ae760e742fa4c07b35c833cddbb8fe9_61) | [56](#i7ae760e742fa4c07b35c833cddbb8fe9_61) |
| [Consolidated Statements of Stockholders’ Equity for the Years Ended December 31,](#i7ae760e742fa4c07b35c833cddbb8fe9_64) [2021,](#i7ae760e742fa4c07b35c833cddbb8fe9_64) [2020](#i7ae760e742fa4c07b35c833cddbb8fe9_64) [and](#i7ae760e742fa4c07b35c833cddbb8fe9_64) [2019](#i7ae760e742fa4c07b35c833cddbb8fe9_64) | [57](#i7ae760e742fa4c07b35c833cddbb8fe9_64) |
| [Consolidated Statements of Cash Flows for the Years Ended December 31,](#i7ae760e742fa4c07b35c833cddbb8fe9_67) [2021](#i7ae760e742fa4c07b35c833cddbb8fe9_67)[,](#i7ae760e742fa4c07b35c833cddbb8fe9_67) [2020](#i7ae760e742fa4c07b35c833cddbb8fe9_67) [and](#i7ae760e742fa4c07b35c833cddbb8fe9_67) [2019](#i7ae760e742fa4c07b35c833cddbb8fe9_67) | [58](#i7ae760e742fa4c07b35c833cddbb8fe9_67) |
| [Notes to Consolidated Financial Statements](#i7ae760e742fa4c07b35c833cddbb8fe9_70) | [59](#i7ae760e742fa4c07b35c833cddbb8fe9_70) |
51
| string | null | null |
Number of properties may be contributed in the agreement | 29 | SEC-NUM |
[Table of Contents](#ifa3dff468a15495db7b57c65ada0de74_7)Debt MaturitiesThe following table summarizes the Company’s stated debt maturities and scheduled principal repayments at March 31, 2022 (dollars in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | Senior UnsecuredNotes(2) | | MortgageDebt(3) | | |
| Year | | Bank Line ofCredit | | Commercial Paper(1) | | | | Amount | | Interest Rate | | Amount | | Interest Rate | | Total |
| 2022 | | $ | — | | | $ | — | | | | | $ | — | | | — | % | | $ | 3,778 | | | 3.80 | % | | $ | 3,778 | |
| 2023 | | — | | | — | | | | | — | | | — | % | | 90,089 | | | 3.80 | % | | 90,089 | |
| 2024 | | — | | | — | | | | | — | | | — | % | | 7,024 | | | 3.81 | % | | 7,024 | |
| 2025 | | — | | | — | | | | | 800,000 | | | 3.93 | % | | 3,209 | | | 3.80 | % | | 803,209 | |
| 2026 | | — | | | 1,330,813 | | | | | 650,000 | | | 3.39 | % | | 244,523 | | | 3.11 | % | | 2,225,336 | |
| Thereafter | | — | | | — | | | | | 3,250,000 | | | 3.24 | % | | 366 | | | 5.91 | % | | 3,250,366 | |
| | | — | | | 1,330,813 | | | | | 4,700,000 | | | | | 348,989 | | | | | 6,379,802 | |
| (Discounts), premium and debt costs, net | | — | | | — | | | | | (45,944) | | | | | 1,724 | | | | | (44,220) | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | $ | — | | | $ | 1,330,813 | | | | | $ | 4,654,056 | | | | | $ | 350,713 | | | | | $ | 6,335,582 | |
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_(1)Commercial Paper Program borrowings are backstopped by the Revolving Facility. As such, the Company calculates the weighted average remaining term of its Commercial Paper Program borrowings using the maturity date of the Revolving Facility. (2)Effective interest rates on the senior unsecured notes range from 1.54% to 6.91% with a weighted average effective interest rate of 3.39% and a weighted average maturity of 7 years. (3)Effective interest rates on the mortgage debt range from 2.72% to 5.91% with a weighted average effective interest rate of 3.36% and a weighted average maturity of 4 years.NOTE 10. Commitments and Contingencies
| | | |
| --- | --- | --- |
| | | |
| |
Legal ProceedingsFrom time to time, the Company is a party to legal proceedings, lawsuits and other claims that arise in the ordinary course of the Company’s business. The Company is not aware of any legal proceedings or claims that it believes may have, individually or taken together, a material adverse effect on the Company’s financial condition, results of operations, or cash flows. The Company’s policy is to expense legal costs as they are incurred.DownREITs and Other PartnershipsIn connection with the formation of certain limited liability companies (“DownREITs”), members may contribute appreciated real estate to a DownREIT in exchange for DownREIT units. These contributions are generally tax-deferred, so that the pre-contribution gain related to the property is not taxed to the member. However, if a contributed property is later sold by the DownREIT, the unamortized pre-contribution gain that exists at the date of sale is specifically allocated and taxed to the contributing members. In many of the DownREITs, the Company has entered into indemnification agreements with those members who contributed appreciated property into the DownREIT. Under these indemnification agreements, if any of the appreciated real estate contributed by the members is sold by the DownREIT in a taxable transaction within a specified number of years, the Company will reimburse the affected members for the federal and state income taxes associated with the pre-contribution gain that is specially allocated to the affected member under the Internal Revenue Code (“make-whole payments”). These make-whole payments include a tax gross-up provision. These indemnification agreements have expirations terms that range through 2039 on a total of 29 properties. Additionally, the Company owns a 49% interest in the Life Science JV (see Note 7). If the property in the joint venture is sold in a taxable transaction, the Company is generally obligated to indemnify its joint venture partner for its federal and state income taxes associated with the gain that existed at the time of the contribution to the joint venture.20
| string | null | null |
Other Asset Impairment Charges | 30 | SEC-NUM |
Impairment charges
In 2020, the Company temporarily and permanently parked certain aircraft in response to the loss of demand driven by the COVID-19 pandemic. At that time, the Company performed impairment tests on certain long-lived and intangible assets, as well as receivable balances to evaluate recoverability. These impairment tests indicated impairment on the Q400 fleet, permanently parked Airbus aircraft, and related capital improvements, resulting in impairment charges of $363 million. The Company also identified certain intangible assets, purchase deposits, and receivable balances deemed unrecoverable, and recorded an additional $30 million in charges for those balances. The total of these special charges, lease return costs summarized above, the recognition of a legal settlement and other immaterial charges comprise the $627 million recorded as Special items - impairment charges and other on the consolidated statement of operations for the period ending December 31, 2020. In 2021, the Company did not identify any indicators of impairment of long-lived assets, goodwill, intangibles or receivables.
CARES Act Funding
In 2020, Alaska, Horizon, and McGee finalized agreements with the Treasury through the Payroll Support Program (PSP) under the Coronavirus Aid, Relief and Economic Security (CARES) Act, made available under the Consolidated Appropriations Act, 2020 (PSP 1). Under PSP 1 and associated agreements, Alaska, Horizon, and McGee received total funds of approximately $1.1 billion in 2020.
In 2021, Alaska, Horizon and McGee finalized agreements with the Treasury through an extension of the PSP, made available under the Consolidated Appropriations Act, 2021 (PSP 2) and received an additional $626 million.
Alaska, Horizon and McGee also finalized additional agreements with the Treasury under a third round of the PSP, made available under the American Rescue Plan of 2021 (PSP 3), and received total funds of $585 million.
Total funds contracted from the Treasury under the Payroll Support Programs are allocated as follows (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Grants | | Loans | | Warrants | | Total Proceeds |
| PSP 1 | $ | 757 | | | $ | 293 | | | $ | 9 | | | $ | 1,059 | |
| PSP 2 | 457 | | | 160 | | | 9 | | | 626 | |
| PSP 3 | 431 | | | 147 | | | 7 | | | 585 | |
| Total | $ | 1,645 | | | $ | 600 | | | $ | 25 | | | $ | 2,270 | |
Funds were exclusively used for payment of employee salaries, wages and benefits. In 2021 and 2020, $892 million and $753 million in PSP grant funds were recorded as an offset to wages, salaries and benefits as eligible expenses were incurred. Also included within the annual total offset are employee retention credits as provided for in the CARES Act of $21 million in 2021 and $29 million in 2020. The Company does not expect to record additional wage offsets in 2022.
Upon receipt of the funds issued under PSP 3, certain conditions and restrictions were extended. These conditions include, but are not limited to, refraining from conducting involuntary furloughs or reducing employee pay rates of pay through September 30, 2021, and placing limits on executive compensation through April 1, 2023. The conditions also included suspension of dividends and share repurchases through September 30, 2022.
NOTE 3. REVENUE
Ticket revenue is recorded as Passenger revenue, and represents the primary source of the Company's revenue. Also included in Passenger revenue are passenger ancillary revenues such as bag fees, on-board food and beverage, ticket change fees, and certain revenue from the frequent flyer program. In 2020, the Company eliminated ticket change fees indefinitely from main cabin and first class fares. Mileage Plan other revenue includes brand and marketing revenue from our co-branded credit card and other partners and certain interline frequent flyer revenue, net of commissions. Cargo and other revenue includes freight and mail revenue, and to a lesser extent, other ancillary revenue products such as lounge membership and certain commissions.
The Company disaggregates revenue by segment in Note 13. The level of detail within the Company’s consolidated statements of operations, segment disclosures, and in this footnote depict the nature, amount, timing and uncertainty of revenue and how cash flows are affected by economic and other factors.
62
| string | null | null |
Average Grant Date Fair Value Per Share, Earned/vested | 63.28 | SEC-NUM |
Dividend equivalents are only paid on earned awards after the performance period has concluded. Compensation expense for performance shares is recognized over the service period based on the number of shares ultimately expected to be earned. Performance shares awards are accounted for as liabilities in accordance with ASC 718, Compensation - Stock Compensation, with compensation expense adjusted at the end of each reporting period to reflect the change in fair value of the awards. Information related to performance share payouts for the years ended September 30, 2020 and 2021 follows (shares in thousands):
| | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | |
| | 2020 | | | 2021 |
| Performance period | 2017 - 2019 | | 2018 - 2020 |
| Percent payout | 107 | % | | 100 | % |
| Total shares earned | 2,008 | | 1,535 |
| Shares distributed in cash, primarily for tax withholding | 883 | | 672 |
As of September 30, 2021, approximately 1,327,000 shares awarded primarily in 2019 were outstanding, contingent on the Company achieving its performance objectives through 2021. The objectives for these shares were met at the 101 percent level and the shares will be distributed in early 2022.
Additionally, the rights to receive approximately 1,547,000 and 1,497,000 common shares awarded in 2021 and 2020, respectively, are outstanding and contingent upon the Company achieving its performance objectives through 2023 and 2022, respectively.
Incentive shares plans also include restricted stock awards and restricted stock units. Restricted stock awards involve distribution of common stock to key management employees subject to cliff vesting at the end of service periods ranging from three to ten years while restricted stock units granted to employees cliff vest at the end of a three-year period. The fair value of restricted stock awards and restricted stock units is determined based on the average of the high and low market prices of the Company's common stock on the date of grant, with compensation expense recognized ratably over the applicable vesting period. In 2021, approximately 87,000 shares of restricted stock vested as a result of participants fulfilling the applicable service requirements. Consequently, approximately 57,000 shares were issued while 30,000 shares were withheld for income taxes in accordance with minimum withholding requirements. As of September 30, 2021, there were approximately 1,269,000 shares of unvested restricted stock and restricted stock units outstanding.
In addition to the employee stock option and incentive shares plans, in 2021 the Company awarded approximately 19,000 shares of restricted stock and 2,000 restricted stock units under the restricted stock plan for non-management directors. As of September 30, 2021, approximately 99,000 shares were available for issuance under this plan.
As of September 30, 2021, 5.1 million shares remained available for award under incentive shares plans.
Changes in shares outstanding but not yet earned under incentive shares plans during the year ended September 30, 2021 follow (shares in thousands; assumes 100 percent payout of unvested awards):
| | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | |
| | Shares | | Average Grant DateFair Value Per Share |
| Beginning of year | 5,916 | | | | $ | 67.22 | | |
| Granted | 2,095 | | | | $ | 71.75 | | |
| | | | | | |
| Earned/vested | (1,867) | | | | $ | 63.28 | | |
| Canceled | (503) | | | | $ | 67.54 | | |
| End of year | 5,641 | | | | $ | 70.22 | | |
53
| string | null | null |
Maximum borrowing capacity for line of credit facility | 1.25 | SEC-NUM |
14. Debt The balances and the stated interest rates of outstanding debt of Ameriprise Financial were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Outstanding Balance | | Stated Interest Rate |
| December 31, | December 31, |
| 2021 | | 2020 | 2021 | | 2020 |
| (in millions) | |
| Long-term debt: | | | | | | | |
| Senior notes due 2022 | $ | 500 | | | $ | 500 | | | 3.0 | % | | 3.0 | % |
| Senior notes due 2023 | 750 | | | 750 | | | 4.0 | | | 4.0 | |
| Senior notes due 2024 | 550 | | | 550 | | | 3.7 | | | 3.7 | |
| Senior notes due 2025 | 500 | | | 500 | | | 3.0 | | | 3.0 | |
| Senior notes due 2026 | 500 | | | 500 | | | 2.9 | | | 2.9 | |
| Finance lease liabilities | 40 | | | 44 | | | N/A | | N/A |
| Other (1) | (8) | | | (13) | | | N/A | | N/A |
| Total long-term debt | 2,832 | | | 2,831 | | | | | |
| | | | | | | | |
| Short-term borrowings: | | | | | | | |
| Federal Home Loan Bank (“FHLB”) advances | 200 | | | 200 | | | 0.3 | % | | 0.4 | % |
| | | | | | | | |
| | | | | | | | |
| Total | $ | 3,032 | | | $ | 3,031 | | | | | |
(1) Includes adjustments for net unamortized discounts, debt issuance costs and other lease obligations.N/A Not ApplicableLong-Term DebtThe Company’s senior notes may be redeemed, in whole or in part, at any time prior to maturity at a price equal to the greater of the principal amount and the present value of remaining scheduled payments, discounted to the redemption date, plus accrued interest. Short-Term BorrowingsThe Company’s life insurance and bank subsidiaries are members of the FHLB of Des Moines which provides access to collateralized borrowings. The Company has pledged Available-for-Sale securities consisting of commercial mortgage backed securities and residential mortgage backed securities as collateral to access these borrowings. The fair value of the securities pledged is recorded in Investments and was $1.2 billion and $1.3 billion, of commercial mortgage backed securities, and $581 million and $604 million, of residential mortgage backed securities, as of December 31, 2021 and 2020, respectively. The remaining maturity of outstanding FHLB advances was less than three months as of both December 31, 2021 and 2020. The stated interest rate of the FHLB advances is a weighted average annualized interest rate on the outstanding borrowings as of the balance sheet date.On June 11, 2021, the Company entered into an amended and restated credit agreement that provides for an unsecured revolving credit facility of up to $1.0 billion that expires in June 2026. Under the terms of the credit agreement for the facility, the Company may increase the amount of this facility up to $1.25 billion upon satisfaction of certain approval requirements. As of both December 31, 2021 and 2020, the Company had no borrowings outstanding and $1 million of letters of credit issued against the facility. The Company’s credit facility contains various administrative, reporting, legal and financial covenants. The Company was in compliance with all such covenants as of both December 31, 2021 and 2020. 15. Fair Values of Assets and LiabilitiesGAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; that is, an exit price. The exit price assumes the asset or liability is not exchanged subject to a forced liquidation or distressed sale.Valuation HierarchyThe Company categorizes its fair value measurements according to a three-level hierarchy. The hierarchy prioritizes the inputs used by the Company’s valuation techniques. A level is assigned to each fair value measurement based on the lowest level input that is significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are defined as follows:Level 1 Unadjusted quoted prices for identical assets or liabilities in active markets that are accessible at the measurement date.Level 2 Prices or valuations based on observable inputs other than quoted prices in active markets for identical assets and liabilities.Level 3 Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.
114
| string | null | null |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 3.6 | SEC-NUM |
related to any such award. As of December 31, 2021, the remaining aggregate number of shares of the Company's common stock authorized for issuance under the 2012 Plan was 3.6 million.
The 2011 Plan permitted the awards of stock options and other stock awards. Stock awards, in the form of stock rights, were granted to members of the board of directors without payment to the Company.
Stock Awards
Stock awards include RPSRs, RSRs, and stock rights. The fair value of stock awards is determined based on the closing market price of the Company's common stock on the grant date. Compensation expense for stock awards is measured based on the grant date fair value and recognized over the vesting period, generally three years.
For purposes of measuring compensation expense, the amount of shares ultimately expected to vest is estimated at each reporting date based on management's expectations regarding the relevant service or performance criteria.
The Company issued the following stock awards in the years ended December 31, 2021, 2020, and 2019:
Restricted Performance Stock Rights - For the year ended December 31, 2021, the Company granted approximately 0.2 million RPSRs at a weighted average share price of $180.06. These rights are subject to cliff vesting on December 31, 2023. For the year ended December 31, 2020, the Company granted approximately 0.1 million RPSRs at a weighted average share price of $229.06. These rights are subject to cliff vesting on December 31, 2022. For the year ended December 31, 2019, the Company granted approximately 0.1 million RPSRs at a weighted average share price of $210.24. These rights were fully vested as of December 31, 2021. All of the RPSRs are subject to the achievement of performance-based targets at the end of the respective vesting periods and will ultimately vest between 0% and 200% of grant date value.
Restricted Stock Rights - Retention stock awards are granted to key employees primarily to ensure business continuity. In 2021, the Company granted approximately 31,400 RSRs at a weighted average share price of $187.59, with cliff vesting one to three years from the grant date. In 2020, the Company granted less than 1,000 RSRs at a weighted average share price of $192.26, with cliff vesting two to three years from the grant date. In 2019, no retention stock awards were granted. As of December 31, 2021, approximately 29,800 RSRs were outstanding.
For the year ended December 31, 2021, 0.1 million stock awards vested, of which less than 0.1 million were transferred to the Company from employees in satisfaction of minimum tax withholding obligations. For the year ended December 31, 2020, 0.1 million stock awards vested, of which less than 0.1 million were transferred to the Company from employees in satisfaction of minimum tax withholding obligations. For the year ended December 31, 2019, 0.3 million stock awards vested, of which approximately 0.1 million were transferred to the Company from employees in satisfaction of minimum tax withholding obligations.
Stock Rights and Stock Issuances - The Company granted stock rights to its non-employee directors on a quarterly basis in 2021, with each grant less than 10,000 shares. All stock rights granted to non-employee directors are fully vested on the grant date. If a non-employee director has met certain stock ownership guidelines, the non-employee director may elect under the terms of the Amended and Restated Directors’ Compensation Policy and Amended and Restated Board Deferred Compensation Policy to receive their annual equity award for the following calendar year in the form of either shares of the Company’s common stock or stock units that are payable in the fifth calendar year after the year in which the annual equity award is earned, or, if earlier, upon termination of the director’s board service.
Non-employee directors may also elect to receive their annual cash retainers in the form of stock units that become payable upon termination of the director’s board service. Non-employee directors who elect to receive their annual cash retainers in the form of stock units and have met their stock ownership guidelines may elect under the terms of the Amended and Restated Directors’ Compensation Policy and Amended and Restated Board Deferred Compensation Policy to receive stock units for the following calendar year that are payable in the fifth calendar year after the year in which the stock units are earned, or, if earlier, upon termination of the director’s board service.
102
| string | null | null |
Preferred stock, par value (in dollars per share) | 1.00 | SEC-NUM |
[Table of Contents](#ie64973d8440d48dda3b140796cb1bc77_7)
CHEVRON CORPORATION AND SUBSIDIARIESCONSOLIDATED BALANCE SHEET(Unaudited)
| | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | |
| | | At September 30,2022 | | At December 31,2021 |
| | | (Millions of dollars) |
| Assets | | | | |
| Cash and cash equivalents | | $ | 15,164 | | | $ | 5,640 | |
| | | | | |
| Marketable securities | | 267 | | | 35 | |
| Accounts and notes receivable (less allowance: 2022 - $390; 2021 - $303) | | 22,466 | | | 18,419 | |
| Inventories: | | | | |
| Crude oil and products | | 6,917 | | | 4,248 | |
| Chemicals | | 668 | | | 565 | |
| Materials, supplies and other | | 1,417 | | | 1,492 | |
| Total inventories | | 9,002 | | | 6,305 | |
| Prepaid expenses and other current assets | | 4,604 | | | 3,339 | |
| Total Current Assets | | 51,503 | | | 33,738 | |
| Long-term receivables (less allowance: 2022 - $494; 2021 - $442) | | 1,099 | | | 603 | |
| Investments and advances | | 45,154 | | | 40,696 | |
| Properties, plant and equipment, at cost | | 325,102 | | | 336,045 | |
| Less: Accumulated depreciation, depletion and amortization | | 180,958 | | | 189,084 | |
| Properties, plant and equipment, net | | 144,144 | | | 146,961 | |
| Deferred charges and other assets | | 12,748 | | | 12,384 | |
| Goodwill | | 4,663 | | | 4,385 | |
| Assets held for sale | | 424 | | | 768 | |
| Total Assets | | $ | 259,735 | | | $ | 239,535 | |
| Liabilities and Equity | | | | |
| Short-term debt | | $ | 2,221 | | | $ | 256 | |
| Accounts payable | | 21,699 | | | 16,454 | |
| Accrued liabilities | | 7,181 | | | 6,972 | |
| Federal and other taxes on income | | 4,020 | | | 1,700 | |
| Other taxes payable | | 1,762 | | | 1,409 | |
| Total Current Liabilities | | 36,883 | | | 26,791 | |
| Long-term debt | | 21,420 | | | 31,113 | |
| | | | | |
| Deferred credits and other noncurrent obligations | | 20,005 | | | 20,778 | |
| Noncurrent deferred income taxes | | 16,616 | | | 14,665 | |
| Noncurrent employee benefit plans | | 5,184 | | | 6,248 | |
| Total Liabilities\* | | $ | 100,108 | | | $ | 99,595 | |
| Preferred stock (authorized 100,000,000 shares; $1.00 par value; none issued) | | — | | | — | |
| Common stock (authorized 6,000,000,000 shares, $0.75 par value; 2,442,676,580 shares issued at September 30, 2022 and December 31, 2021) | | 1,832 | | | 1,832 | |
| Capital in excess of par value | | 18,587 | | | 17,282 | |
| Retained earnings | | 186,394 | | | 165,546 | |
| Accumulated other comprehensive losses | | (3,173) | | | (3,889) | |
| Deferred compensation and benefit plan trust | | (240) | | | (240) | |
| Treasury stock, at cost (509,038,034 and 512,870,523 shares at September 30, 2022 and December 31, 2021, respectively) | | (44,720) | | | (41,464) | |
| Total Chevron Corporation Stockholders’ Equity | | 158,680 | | | 139,067 | |
| Noncontrolling interests (includes redeemable noncontrolling interest of $142 and $135 at September 30, 2022 and December 31, 2021) | | 947 | | | 873 | |
| Total Equity | | 159,627 | | | 139,940 | |
| Total Liabilities and Equity | | $ | 259,735 | | | $ | 239,535 | |
| | | | | |
| \* Refer to [Note 12 Other Contingencies and Commitments](#ie64973d8440d48dda3b140796cb1bc77_76). |
| |
See accompanying notes to consolidated financial statements.5
| string | null | null |
Stock options outstanding, number of shares | 29,048,449 | SEC-NUM |
[Table of Contents](#ib0ff9808fe764fdea19589324372f96b_7)Abbott Laboratories and SubsidiariesNotes to the Condensed Consolidated Financial StatementsSeptember 30, 2022(Unaudited)
Note 7 — Incentive Stock Program
In the first nine months of 2022, Abbott granted 2,634,647 stock options, 514,205 restricted stock awards and 5,427,697 restricted stock units under its incentive stock program. At September 30, 2022, approximately 87 million shares were reserved for future grants. Information regarding the number of options outstanding and exercisable at September 30, 2022 is as follows:
| | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | |
| | | Outstanding | | Exercisable |
| Number of shares | | 29,048,449 | | | 23,310,464 | |
| Weighted average remaining life (years) | | 5.4 | | 4.6 |
| Weighted average exercise price | | $ | 70.22 | | | $ | 59.69 | |
| Aggregate intrinsic value (in millions) | | $ | 901 | | | $ | 890 | |
The total unrecognized share-based compensation cost at September 30, 2022 amounted to approximately $600 million which is expected to be recognized over the next three years.
Note 8 — Debt and Lines of Credit
On March 15, 2022, Abbott repaid the $750 million outstanding principal amount of its 2.55% Notes upon maturity.
Note 9 — Financial Instruments, Derivatives and Fair Value Measures
Certain Abbott foreign subsidiaries enter into foreign currency forward exchange contracts to manage exposures to changes in foreign exchange rates primarily for anticipated intercompany purchases by those subsidiaries whose functional currencies are not the U.S. dollar. These contracts, with gross notional amounts totaling $7.9 billion at September 30, 2022 and $8.6 billion at December 31, 2021, are designated as cash flow hedges of the variability of the cash flows due to changes in foreign exchange rates and are recorded at fair value. Accumulated gains and losses as of September 30, 2022 will be included in Cost of products sold at the time the products are sold, generally through the next twelve to eighteen months.
Abbott enters into foreign currency forward exchange contracts to manage currency exposures for foreign currency denominated third-party trade payables and receivables, and for intercompany loans and trade accounts payable where the receivable or payable is denominated in a currency other than the functional currency of the entity. For intercompany loans, the contracts require Abbott to sell or buy foreign currencies, primarily European currencies, in exchange for primarily U.S. dollars and other European currencies. For intercompany and trade payables and receivables, the currency exposures are primarily the U.S. dollar and European currencies. At September 30, 2022 and December 31, 2021, Abbott held the gross notional amounts of $10.3 billion and $12.2 billion, respectively, of such foreign currency forward exchange contracts.
Abbott has designated a yen-denominated, 5-year term loan of approximately $413 million and $521 million as of September 30, 2022 and December 31, 2021, respectively, as a hedge of the net investment in certain foreign subsidiaries. The change in the value of the debt, which is due to changes in foreign exchange rates, is recorded in Accumulated other comprehensive income (loss), net of tax.
Abbott is a party to interest rate hedge contracts with notional values totaling approximately $2.9 billion at September 30, 2022 and December 31, 2021 to manage its exposure to changes in the fair value of fixed-rate debt. These contracts are designated as fair value hedges of the variability of the fair value of fixed-rate debt due to changes in the long-term benchmark interest rates. The effect of the hedge is to change a fixed-rate interest obligation to a variable rate for that portion of the debt. Abbott records the contracts at fair value and adjusts the carrying amount of the fixed-rate debt by an offsetting amount.15
| string | null | null |
Sublease, lease term (in years) | 15 | SEC-NUM |
[Table of Contents](#i89c3c9328e454b30b2c14123b867f3f0_7)EQUINIX, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Concurrent with the closing of the EMEA 2 Joint Venture, the EMEA 2 Joint Venture entered into credit facility agreements with a group of lenders under which it could borrow up to approximately $1.4 billion in total at the exchange rate in effect on December 31, 2021, with such facilities maturing in 2025 and 2026. In connection with our 20% equity investment in the EMEA 2 Joint Venture, we provided the lenders with guarantees covering 20% of all payments of principal and interest due and payable by the EMEA 2 Joint Venture under these credit facilities, up to a limit of $310.8 million in total at the exchange rate in effect on December 31, 2021. As of December 31, 2021, the maximum potential amount of our future payments under these guarantees was approximately $38.1 million, at the exchange rates in effect on that date. Our estimated fair value of these guarantees is minimal as the likelihood of making a payout under the guarantees is low. 16. Related Party TransactionsJoint Venture Related Party TransactionsWe have lease arrangements and provide various services to the EMEA 1 Joint Venture, Asia-Pacific 1 Joint Venture and EMEA 2 Joint Venture (the "Joint Ventures") through multiple agreements, including sales and marketing, development management, facilities management, and asset management services. These transactions are generally considered to have been negotiated at arm's length. The following table presents the revenues and expenses from these arrangements with the Joint Ventures in our consolidated statements of operations (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Years Ended December 31, |
| Related Party | | Nature of Transaction | | 2021 | | 2020 | | 2019 |
| EMEA 1 Joint Venture | | Revenues | | $ | 42,387 | | | $ | 21,306 | | | $ | 3,707 | |
| EMEA 1 Joint Venture | | Expenses (1) | | 8,303 | | | 14,935 | | | 2,076 | |
| Asia-Pacific 1 Joint Venture | | Revenues | | 21,223 | | | 588 | | | — | |
| EMEA 2 Joint Venture | | Revenues | | 7,097 | | | — | | | — | |
| | | |
| --- | --- | --- |
| | | |
| |
(1)We have a sub-lease agreement with the EMEA 1 Joint Venture to sub-lease a portion of London ("LD") 10-2 data center or former LD10 data center, for a total of 15 years. Balances primarily consist of rent expenses for the LD10-2 data center.The following table presents the assets and liabilities from related party transactions with the Joint Ventures in our consolidated balance sheets (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | As of December 31, |
| Related Party | | Balance Sheet Line Item | | 2021 | | 2020 |
| EMEA 1 Joint Venture | | Receivables | | $ | 32,077 | | | $ | 6,459 | |
| | Contract Assets (1) | | 54,503 | | | 5,614 | |
| | Finance Lease Right of Use Assets | | 118,817 | | | 127,197 | |
| | Other Liabilities and Payables (2) | | 2,483 | | | 17,646 | |
| | Other Liabilities and Payables - construction obligation (3) | | 39,382 | | | 55,607 | |
| | Deferred Revenue | | 16,886 | | | — | |
| | Finance Lease Right of Use Liabilities | | 124,918 | | | 130,756 | |
| | | | | | | | | | | |
| Asia- Pacific 1 Joint Venture | | Receivables | | 2,124 | | | 16,936 | |
| | Payables | | 121 | | | — | |
| | | | | | | | | | | |
| EMEA 2 Joint Venture | | Receivables | | 26,953 | | | — | |
| | Contract Assets | | 1,492 | | | — | |
| | Payables | | 1,755 | | | — | |
F-59
| string | null | null |
Proceeds from Altus credit facility, net | 33 | SEC-NUM |
APA CORPORATION AND SUBSIDIARIESSTATEMENT OF CONSOLIDATED CASH FLOWS(Unaudited)
| | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | |
| | | For the Six Months EndedJune 30, |
| | | 2022 | | 2021 |
| | | | | |
| | | (In millions) |
| CASH FLOWS FROM OPERATING ACTIVITIES: | | | | |
| Net income including noncontrolling interests | | $ | 3,013 | | | $ | 858 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | |
| Unrealized derivative instrument losses, net | | 83 | | | 55 | |
| Gain on divestitures, net | | (1,149) | | | (67) | |
| Exploratory dry hole expense and unproved leasehold impairments | | 47 | | | 46 | |
| Depreciation, depletion, and amortization | | 569 | | | 693 | |
| Asset retirement obligation accretion | | 58 | | | 56 | |
| | | | | |
| Benefit from deferred income taxes | | (60) | | | (23) | |
| (Gain) loss on extinguishment of debt | | 67 | | | (1) | |
| | | | | |
| Other, net | | (88) | | | (14) | |
| Changes in operating assets and liabilities: | | | | |
| Receivables | | (519) | | | (165) | |
| Inventories | | (18) | | | 20 | |
| Drilling advances and other current assets | | 28 | | | 43 | |
| Deferred charges and other long-term assets | | (11) | | | (18) | |
| Accounts payable | | 206 | | | 157 | |
| Accrued expenses | | 202 | | | 17 | |
| Deferred credits and noncurrent liabilities | | (2) | | | (17) | |
| NET CASH PROVIDED BY OPERATING ACTIVITIES | | 2,426 | | | 1,640 | |
| CASH FLOWS FROM INVESTING ACTIVITIES: | | | | |
| Additions to upstream oil and gas property | | (741) | | | (558) | |
| | | | | |
| Leasehold and property acquisitions | | (26) | | | (3) | |
| | | | | |
| | | | | |
| Proceeds from sale of oil and gas properties | | 751 | | | 181 | |
| Proceeds from sale of Kinetik shares | | 224 | | | — | |
| Deconsolidation of Altus cash and cash equivalents | | (143) | | | — | |
| Other, net | | (49) | | | (13) | |
| NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | | 16 | | | (393) | |
| CASH FLOWS FROM FINANCING ACTIVITIES: | | | | |
| Payments on revolving credit facilities, net | | (267) | | | (150) | |
| Proceeds from Altus credit facility, net | | — | | | 33 | |
| | | | | |
| | | | | |
| Payments on Apache fixed-rate debt | | (1,370) | | | (20) | |
| Distributions to noncontrolling interest - Egypt | | (159) | | | (60) | |
| Distributions to Altus Preferred Unit limited partners | | (11) | | | (23) | |
| Treasury stock activity, net | | (552) | | | — | |
| Dividends paid to APA common stockholders | | (86) | | | (19) | |
| Other, net | | (17) | | | (21) | |
| NET CASH USED IN FINANCING ACTIVITIES | | (2,462) | | | (260) | |
| | | | | |
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | | (20) | | | 987 | |
| CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | | 302 | | | 262 | |
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | | $ | 282 | | | $ | 1,249 | |
| | | | | |
| SUPPLEMENTARY CASH FLOW DATA: | | | | |
| Interest paid, net of capitalized interest | | $ | 172 | | | $ | 233 | |
| Income taxes paid, net of refunds | | 637 | | | 231 | |
The accompanying notes to consolidated financial statements are an integral part of this statement.3
| string | null | null |
2023 | 174 | SEC-NUM |
[Table of Contents](#i769337f517694ce29a72abc52f207787_10)
Notes to Consolidated Financial Statements — (Continued)Becton, Dickinson and Company
Expected Rate of Return on Plan AssetsThe expected rate of return on plan assets is based upon expectations of long-term average rates of return to be achieved by the underlying investment portfolios. In establishing this assumption, the Company considers many factors, including historical assumptions compared with actual results; benchmark data; expected returns on various plan asset classes, as well as current and expected asset allocations.Expected FundingThe Company’s funding policy for its defined benefit pension plans is to contribute amounts sufficient to meet legal funding requirements, plus any additional amounts that may be appropriate considering the funded status of the plans, tax consequences, the cash flow generated by the Company and other factors. The Company made discretionary contributions to its BD U.S. pension plan of $16 million during fiscal year 2021 and $134 million in October 2021. The Company did not make any required contributions in 2021 and does not anticipate any significant required contributions to its pension plans in 2022.Expected benefit payments are as follows:
| | | | | | |
| --- | --- | --- | --- | --- | --- |
| | | | | | |
| (Millions of dollars) | PensionPlans |
| 2022 | $ | 242 | |
| 2023 | 174 | |
| 2024 | 178 | |
| 2025 | 189 | |
| 2026 | 206 | |
| 2027-2031 | 1,113 | |
Expected benefit payments associated with postretirement healthcare plans are immaterial to the Company's consolidated financial results.InvestmentsThe Company’s primary objective is to achieve returns sufficient to meet future benefit obligations. It seeks to generate above market returns by investing in more volatile asset classes such as equities while at the same time controlling risk through diversification in non-correlated asset classes and through allocations to more stable asset classes like fixed income.U.S. PlansThe Company’s U.S. pension plans comprise 68% of total benefit plan investments, based on September 30, 2021 market values, and have a target asset mix of 45% fixed income, 23% diversifying investments and 32% equities. This mix was established based on an analysis of projected benefit payments and estimates of long-term returns, volatilities and correlations for various asset classes. The asset allocations to diversifying investments include high-yield bonds, hedge funds, real estate, infrastructure, leveraged loans and emerging markets bonds. The actual portfolio investment mix may, from time to time, deviate from the established target mix due to various factors such as normal market fluctuations, the reliance on estimates in connection with the determination of allocations and normal portfolio activity such as additions and withdrawals. Rebalancing of the asset portfolio on a quarterly basis is required to address any allocations that deviate from the established target allocations in excess of defined allowable ranges. The target allocations are subject to periodic review, including a review of the asset portfolio’s performance, by the named fiduciary of the plans. Any tactical deviations from the established asset mix require the approval of the named fiduciary.The U.S. plans may enter into both exchange traded and non-exchange traded derivative transactions in order to manage interest rate exposure, volatility, term structure of interest rates, and sector and currency 84
| string | null | null |
2025 | 188.2 | SEC-NUM |
THE COOPER COMPANIES, INC. AND SUBSIDIARIESNotes to Consolidated Condensed Financial Statements(Unaudited)The Company evaluates goodwill for impairment annually during the third quarter of the fiscal year and when an event occurs or circumstances change such that it is reasonably possible that impairment may exist. The Company accounts for goodwill, evaluates and tests goodwill balances for impairment in accordance with related accounting standards.
The Company performed an annual impairment assessment in the third quarter of fiscal 2021, and its analysis indicated that there was no impairment of goodwill in its reporting units. Other Intangible Assets
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | April 30, 2022 | | October 31, 2021 | | |
| (In millions) | Gross CarryingAmount | | AccumulatedAmortization | | Gross CarryingAmount | | AccumulatedAmortization | | Weighted Average Amortization Period(in years) |
| | | | | | | | | | |
| Intangible assets with definite lives: | | | | | | | | | |
| Composite intangible asset | $ | 1,061.9 | | | $ | 318.6 | | | $ | 1,061.8 | | | $ | 283.2 | | | 15 |
| Customer relationships | 1,048.6 | | | 265.6 | | | 378.4 | | | 240.1 | | | 13 |
| Technology | 504.0 | | | 299.3 | | | 513.0 | | | 287.9 | | | 10 |
| Trademarks | 210.6 | | | 55.5 | | | 156.7 | | | 49.1 | | | 14 |
| License and distribution rights and other | 32.6 | | | 22.1 | | | 33.4 | | | 21.6 | | | 11 |
| | 2,857.7 | | | $ | 961.1 | | | 2,143.3 | | | $ | 881.9 | | | 14 |
| Less: accumulated amortization and translation | 961.1 | | | | | 881.9 | | | | | |
| Intangible assets with definite lives, net | 1,896.6 | | | | | 1,261.4 | | | | | |
| Intangible assets with indefinite lives, net (1) | 10.8 | | | | | 10.1 | | | | | |
| Total other intangibles, net | $ | 1,907.4 | | | | | $ | 1,271.5 | | | | | |
(1) Intangible assets with indefinite lives include technology and trademarks.Balances include foreign currency translation adjustments. Intangible assets with definite lives are amortized over the estimated useful life of the assets. As of April 30, 2022, the estimate of future amortization expenses for intangible assets with definite lives is as follows:
| | | | | | |
| --- | --- | --- | --- | --- | --- |
| | | | | | |
| Fiscal Years: | (In millions) |
| Remainder of 2022 | $ | 101.9 | |
| 2023 | 202.0 | |
| 2024 | 198.1 | |
| 2025 | 188.2 | |
| 2026 | 180.9 | |
| Thereafter | 1,025.5 | |
| Total remaining amortization for intangible assets with definite lives | $ | 1,896.6 | |
The Company assesses definite-lived intangible assets whenever events or changes in circumstances indicate that the carrying amount of a definite-lived intangible asset (asset group) may not be recoverable. When events or changes in circumstances indicate that the carrying amount of a definite-lived intangible asset may not be recoverable, in accordance with related accounting standards, the Company evaluates whether the definite-lived intangible asset is impaired by comparing its carrying value to its undiscounted future cash flows.The Company assesses indefinite-lived intangible assets annually in the third quarter of the fiscal year, or whenever events or circumstances indicate that the carrying amount of an indefinite-lived intangible asset (asset group) may not be recoverable. The Company evaluates whether the indefinite-lived intangible asset is impaired by comparing its carrying value to its fair value.The Company performed an annual impairment assessment in the third quarter of fiscal 2021 and did not recognize any intangible asset impairment charges.14
| string | null | null |
Amount of gross unrecognized tax benefits that would impact the effective tax rate, if recognized | 173.1 | SEC-NUM |
[Table of Contents](#ic5e280ddd1ef46fe9ace2a18e7a582b7_7)
As of January 31, 2022, Autodesk had $41.0 million of cumulative U.S. federal tax loss carryforwards and $585.4 million of cumulative U.S. state tax loss carryforwards, which may be available to reduce future income tax liabilities in federal and state jurisdictions. The pre-fiscal 2019 U.S. federal tax loss carryforward will expire beginning fiscal 2035 through fiscal 2039. U.S. federal losses generated beginning in fiscal 2019 do not expire and are carried forward indefinitely. The U.S. state tax loss carryforward will expire beginning fiscal 2025 through fiscal 2042.
In addition to U.S. federal and state tax loss carryforwards, the Netherlands, Norway, Singapore, and other foreign jurisdictions incurred tax losses totaling $164.0 million, which may be available to reduce future income tax liabilities. Our Norway and Singapore losses, of $28.7 million and $85.2 million, respectively, have an indefinite expiration period. The Netherlands losses of $41.3 million will expire beginning in fiscal 2026 through fiscal 2028, and have a full valuation allowance against them on our balance sheet as the Company has determined it is more likely than not that these losses will not be utilized.
As of January 31, 2022, Autodesk had $190.8 million of cumulative U.S. federal research tax credit carryforwards, $106.5 million of cumulative California state research tax credit carryforwards, and $49.2 million and $1.4 million of cumulative Canadian federal research and Ontario minimum tax credit carryforwards, respectively, which may be available to reduce future income tax liabilities in the respective jurisdictions. The federal research tax credit carryforwards will expire beginning fiscal 2026 through fiscal 2042, the state research tax credit carryforwards may reduce future California income tax liabilities indefinitely, and the Canadian research tax credit carryforwards will expire beginning fiscal 2030 through fiscal 2042. Autodesk also has $119.3 million of cumulative U.S. federal foreign tax credit carryforwards, which may be available to reduce future U.S. tax liabilities. These foreign tax credits will expire beginning fiscal 2025 through fiscal 2032. As discussed above, the California and Canada cumulative assets have full valuation allowance against them on our balance sheet as the Company has determined it is more likely than not that these losses and credits will not be utilized.
Utilization of net operating losses and tax credits may be subject to an annual limitation due to ownership change limitations provided in the Internal Revenue Code and similar state provisions. This annual limitation may result in the expiration of net operating losses and credits before utilization. No ownership change has occurred through the balance sheet date that would result in permanent losses of the U.S. federal and state tax attributes.
As of January 31, 2022, the Company had $206.7 million of gross unrecognized tax benefits, of which $33.6 million would reduce our valuation allowance, if recognized. The remaining $173.1 million would impact the effective tax rate. It is possible that the amount of unrecognized tax benefits will decrease in the next 12 months for an audit settlement of approximately $7.8 million.
A reconciliation of the beginning and ending amount of the gross unrecognized tax benefits is as follows:
| | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | |
| | Fiscal Year Ended January 31, |
| | 2022 | | 2021 | | 2020 |
| Gross unrecognized tax benefits at the beginning of the fiscal year | $ | 198.0 | | | $ | 220.6 | | | $ | 209.0 | |
| Increases for tax positions of prior years | 9.0 | | | 12.7 | | | 2.8 | |
| Decreases for tax positions of prior years | (6.6) | | | (41.1) | | | (0.4) | |
| Increases for tax positions related to the current year | 6.7 | | | 6.4 | | | 11.1 | |
| Decreases relating to settlements with taxing authorities | — | | | — | | | — | |
| Reductions as a result of lapse of the statute of limitations | (0.4) | | | (0.6) | | | (1.9) | |
| Gross unrecognized tax benefits at the end of the fiscal year | $ | 206.7 | | | $ | 198.0 | | | $ | 220.6 | |
It is the Company’s continuing practice to recognize interest and/or penalties related to income tax matters in income tax expense. Autodesk had $6.5 million, $4.5 million, and $2.3 million, net of tax benefit, accrued for interest and penalties related to unrecognized tax benefits as of January 31, 2022, 2021, and 2020, respectively. There was $2.1 million, $2.2 million, and $(0.8) million of net expense for interest and penalties related to tax matters recorded through the consolidated statements of operations for the years ended January 31, 2022, 2021, and 2020, respectively.
Autodesk’s U.S. and state income tax returns for fiscal 2002 through fiscal 2022 remain open to examination due to either net operating loss or credit carryforward. The Internal Revenue Service notified the Company of examination of the Company’s consolidated federal income tax returns for fiscal 2020 and 2021. This audit commenced in February, 2022.
96
| string | null | null |
Aggregate intrinsic value, vested and expected to vest | 222.9 | SEC-NUM |
[Table of Conten](#i207805ce14724a60909000a6c8cb9e11_7)[t](#i207805ce14724a60909000a6c8cb9e11_7)[s](#i207805ce14724a60909000a6c8cb9e11_7)Stock OptionsThe following summarizes the assumptions used in the Black-Scholes model to value stock options granted under the Stock Plan during the years ended December 31:
| | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | |
| | 2021 | | 2020 | | 2019 |
| Risk-free interest rate | 0.8% - 1.3% | | 0.3% - 1.5% | | 1.4% - 2.6% |
| Volatility (a) | 27.2 | % | | 21.1 | % | | 19.9 | % |
| Dividend yield (b) | 0.4 | % | | 0.4 | % | | 0.4 | % |
| Expected years until exercise | 5.5 - 8.0 | | 5.5 - 8.0 | | 5.5 - 8.0 |
| | | | | | |
| (a) Expected volatility is based on a weighted average blend of the company’s historical stock price volatility from July 2, 2016 (the date of separation from Danaher) through the stock option grant date and the average historical stock price volatility of a group of peer companies for the expected term of the options. |
| (b) The dividend yield is calculated by dividing our annual dividend, based on the most recent quarterly dividend rate, by Fortive’s closing stock price on the grant date. |
The following summarizes option activity under the Stock Plan (in millions, except price per share and numbers of years):
| | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Options (a) | | WeightedAverageExercisePrice | | Weighted AverageRemainingContractual Term(years) | | AggregateIntrinsicValue |
| Outstanding as of January 1, 2019 (a) | 11.9 | | | $ | 36.22 | | | | | |
| Granted | 2.7 | | | 57.28 | | | | | |
| Exercised | (1.4) | | | 28.14 | | | | | |
| Canceled/forfeited | (0.9) | | | 55.01 | | | | | |
| Outstanding as of December 31, 2019 (a) | 12.3 | | | 40.50 | | | | | |
| Granted | 2.3 | | | 63.09 | | | | | |
| Exercised | (1.9) | | | 26.32 | | | | | |
| Canceled/forfeited | (0.7) | | | 61.39 | | | | | |
| Adjustment due to Vontier Separation (b) | (1.4) | | | 44.94 | | | | | |
| Outstanding as of December 31, 2020 | 10.6 | | | 50.07 | | | | | |
| Granted | 2.0 | | | 69.07 | | | | | |
| Exercised | (1.5) | | | 36.40 | | | | | |
| Canceled/forfeited | (0.7) | | | 64.28 | | | | | |
| Outstanding as of December 31, 2021 | 10.4 | | | 54.81 | | | 6 | | $ | 224.3 | |
| Vested and expected to vest as of December 31, 2021 (c) | 10.3 | | | 54.62 | | | 6 | | $ | 222.9 | |
| Vested as of December 31, 2021 | 4.8 | | | 42.78 | | | 4 | | $ | 160.9 | |
| | | | | | | | |
| (a) The outstanding options as of December 31, 2019 have been adjusted by a factor of 1.20, as noted above, due to the Separation. (b) The “Adjustment due to Vontier Separation” reflects the cancellation of outstanding options held by Vontier employees as of October 8, 2020, which were replaced with Vontier options issued by Vontier as part of the Separation.(c) The “expected to vest” options are the net unvested options that remain after applying the forfeiture rate assumption to total unvested options. |
The aggregate intrinsic values in the table above represent the total pretax intrinsic value (the difference between the closing stock price of Fortive common stock on the last trading day of 2021 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on December 31, 2021. The amount of aggregate intrinsic value will change based on the price of Fortive’s common stock. 97
| string | null | null |
Deferred Tax Assets, Accrued Transaction Fees | 13,334 | SEC-NUM |
COSTAR GROUP, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS12. INCOME TAXES
The components of the provision for income taxes attributable to operations consist of the following (in thousands):
| | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| | 2021 | | 2020 | | 2019 |
| Current: | | | | | |
| Federal | $ | 61,290 | | | $ | 43,461 | | | $ | 53,039 | |
| State | 24,618 | | | 11,726 | | | 13,422 | |
| Foreign | 1,331 | | | 195 | | | 1,305 | |
| Total current | 87,239 | | | 55,382 | | | 67,766 | |
| Deferred: | | | | | |
| Federal | 22,859 | | | (9,599) | | | 6,881 | |
| State | 8,467 | | | (926) | | | 2,424 | |
| Foreign | (7,161) | | | (1,005) | | | (1,085) | |
| Total deferred | 24,165 | | | (11,530) | | | 8,220 | |
| Total provision for income taxes | $ | 111,404 | | | $ | 43,852 | | | $ | 75,986 | |
The components of deferred tax assets and liabilities consist of the following (in thousands):
| | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | |
| | December 31, |
| | 2021 | | 2020 |
| Deferred tax assets: | | | |
| Allowance for credit losses | $ | 3,601 | | | $ | 3,698 | |
| Accrued compensation | 3,913 | | | 4,934 | |
| Stock compensation | 18,956 | | | 15,289 | |
| Net operating losses | 45,835 | | | 38,498 | |
| Accrued reserve and other | 4,134 | | | 5,900 | |
| Lease liabilities | 28,306 | | | 34,758 | |
| | | | |
| | | | |
| | | | |
| Research and development credits | 5,812 | | | 6,059 | |
| Accrued transaction fees | — | | | 13,334 | |
| Total deferred tax assets, prior to valuation allowance | 110,557 | | | 122,470 | |
| | | | |
| Valuation allowance | (5,694) | | | (11,170) | |
| Total deferred tax assets, net of valuation allowance | 104,863 | | | 111,300 | |
| | | | |
| Deferred tax liabilities: | | | |
| Deferred commission costs, net | (25,700) | | | (23,691) | |
| Lease right-of-use assets | (22,574) | | | (27,168) | |
| Prepaid expenses | (2,569) | | | (2,384) | |
| Property and equipment, net | (21,827) | | | (13,078) | |
| Intangible assets, net | (125,815) | | | (112,987) | |
| Total deferred tax liabilities | (198,485) | | | (179,308) | |
| | | | |
| Net deferred tax assets (liabilities) | $ | (93,622) | | | $ | (68,008) | |
For the years ended December 31, 2021 and 2020, the Company has not recognized deferred tax liabilities for temporary differences related to investments in foreign subsidiaries that were deemed permanently reinvested. Determination of the amount of unrecognized deferred income tax liabilities on these earnings is not practicable because such liability, if any, depends on certain circumstances existing if and when remittance occurs. A deferred tax liability will be recognized if and when the Company no longer plans to permanently reinvest these undistributed earnings.F-32
| string | null | null |
Foreign rate differential | 4 | SEC-NUM |
[Table of Contents](#i36695dc5143241f795c32e47bf5f4b3d_7)CBRE GROUP, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)15.Income TaxesThe components of income before provision for income taxes consisted of the following (dollars in thousands):
| | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| | 2021 | | 2020 | | 2019 |
| Domestic | $ | 1,683,710 | | | $ | 470,181 | | | $ | 839,899 | |
| Foreign | 725,711 | | | 499,788 | | | 521,446 | |
| Total | $ | 2,409,421 | | | $ | 969,969 | | | $ | 1,361,345 | |
Our tax provision (benefit) consisted of the following (dollars in thousands):
| | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| | 2021 | | 2020 | | 2019 |
| Current provision: | | | | | |
| Federal | $ | 274,987 | | | $ | 18,951 | | | $ | (51,980) | |
| State | 115,196 | | | 33,291 | | | 52,403 | |
| Foreign | 238,273 | | | 88,994 | | | 163,833 | |
| Total current provision | 628,456 | | | 141,236 | | | 164,256 | |
| Deferred provision: | | | | | |
| Federal | 34,607 | | | 61,034 | | | (74,432) | |
| State | (4,395) | | | 3,872 | | | (5,760) | |
| Foreign | (91,162) | | | 7,959 | | | (14,169) | |
| Total deferred provision | (60,950) | | | 72,865 | | | (94,361) | |
| Total provision for income taxes | $ | 567,506 | | | $ | 214,101 | | | $ | 69,895 | |
The following is a reconciliation stated as a percentage of pre-tax income of the U.S. statutory federal income tax rate to our effective tax rate:
| | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| | 2021 | | 2020 | | 2019 |
| Federal statutory tax rate | 21 | % | | 21 | % | | 21 | % |
| Foreign rate differential | — | | | — | | | 4 | |
| State taxes, net of federal benefit | 4 | | | 3 | | | 3 | |
| Non-deductible expenses | — | | | 1 | | | 1 | |
| Reserves for uncertain tax positions | 1 | | | — | | | 1 | |
| Credits and exemptions | (1) | | | (2) | | | (4) | |
| Outside basis differences recognized as a result of a legal entity restructuring | — | | | — | | | (20) | |
| | | | | | |
| Other | (1) | | | (1) | | | (1) | |
| Effective tax rate | 24 | % | | 22 | % | | 5 | % |
In the fourth quarter of 2019, we recognized a net tax benefit of approximately $277.2 million attributable to outside basis differences recognized as a result of a legal entity restructuring. The recognition of the outside tax basis differences generated a capital loss that offset capital gains generated during 2019. A portion of the capital loss was carried back to tax years 2016, 2017 and 2018 to offset capital gains in those years. The remaining capital loss was carried forward to tax years 2020 and forward to be utilized to offset capital gains in these years. Based on our strong history of capital gains in the prior years and the nature of our business we expect to generate sufficient capital gains in the remaining three year carry forward period and therefore concluded that it is more likely than not that we will realize the full tax benefit from the capital loss carried forward. Accordingly, we have not provided any valuation allowance against the deferred tax asset for the capital loss carried forward.105
| string | null | null |
Lessee, Operating Lease, Liability, to be Paid, Total | 3,468 | SEC-NUM |
[Table of Contents](#i7f92822ddf844c24912627bf68509b56_7)
Supplemental cash flow information related to leases was as follows:
| | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | |
| | | | | | |
| | 2022 | | 2021 | | 2020 |
| Cash paid for amounts included in the measurement of lease liabilities: | | | | | |
| Operating cash flows — operating leases | $ | 277 | | | $ | 282 | | | $ | 258 | |
| Operating cash flows — finance leases | 45 | | | 37 | | | 33 | |
| Financing cash flows — finance leases | 176 | | | 67 | | | 49 | |
| Operating lease assets obtained in exchange for new or modified leases | 231 | | | 350 | | | 354 | |
| Financing lease assets obtained in exchange for new or modified leases | 794 | | | 399 | | | 317 | |
As of August 28, 2022, future minimum payments during the next five fiscal years and thereafter are as follows:
| | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | |
| | Operating Leases(1) | | Finance Leases | | |
| 2023 | $ | 277 | | | $ | 288 | | | |
| 2024 | 256 | | | 253 | | | |
| 2025 | 210 | | | 280 | | | |
| 2026 | 207 | | | 119 | | | |
| 2027 | 186 | | | 88 | | | |
| Thereafter | 2,332 | | | 1,191 | | | |
| Total(2) | 3,468 | | | 2,219 | | | |
| Less amount representing interest | 747 | | | 591 | | | |
| Present value of lease liabilities | $ | 2,721 | | | $ | 1,628 | | | |
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_(1)Operating lease payments have not been reduced by future sublease income of $83.(2)Excludes $660 of lease payments for leases that have been signed but not commenced.
54
| string | null | null |
Capital loss carryforwards with expiration | 42 | SEC-NUM |
The following table provides information on the Company's various tax carryforwards:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | As of March 31, 2022 | | As of March 31, 2021 |
| (in millions) | | Total | | With No Expiration | | With Expiration | | Expiration Dates Through | | Total | | With No Expiration | | With Expiration | | Expiration Dates Through |
| Net operating loss carryforwards | | | | | | | | | | | | | | | | |
| Federal | | $ | 88 | | | $ | 88 | | | $ | — | | | N/A | | $ | 132 | | | $ | 128 | | | $ | 4 | | | 2033 |
| State | | $ | 589 | | | $ | 243 | | | $ | 346 | | | 2042 | | $ | 369 | | | $ | 6 | | | $ | 363 | | | 2041 |
| Foreign | | $ | 9,368 | | | $ | 5,635 | | | $ | 3,733 | | | 2039 | | $ | 16,700 | | | $ | 6,191 | | | $ | 10,509 | | | 2041 |
| Tax credit carryforwards | | | | | | | | | | | | | | | | |
| Federal | | $ | 5 | | | $ | — | | | $ | 5 | | | 2042 | | $ | 5 | | | $ | — | | | $ | 5 | | | 2040 |
| State | | $ | 5 | | | $ | 2 | | | $ | 3 | | | 2037 | | $ | — | | | $ | — | | | $ | — | | | N/A |
| Foreign | | $ | — | | | $ | — | | | $ | — | | | N/A | | $ | — | | | $ | — | | | $ | — | | | N/A |
| Capital loss carryforwards | | | | | | | | | | | | | | | | |
| Federal | | $ | 42 | | | $ | — | | | $ | 42 | | | 2026 | | $ | — | | | $ | — | | | $ | — | | | N/A |
| State | | $ | — | | | $ | — | | | $ | — | | | N/A | | $ | — | | | $ | — | | | $ | — | | | N/A |
| Foreign | | $ | 199 | | | $ | 199 | | | $ | — | | | N/A | | $ | 45 | | | $ | 45 | | | $ | — | | | N/A |
The Company also has federal and state 163(j) interest deduction carryforward attributes of approximately $239 million and $667 million, respectively, that have no expiration.
The majority of our global unremitted foreign earnings have been taxed or would be exempt from U.S. tax upon repatriation. Such earnings and all current foreign earnings are not indefinitely reinvested. The following earnings are considered indefinitely reinvested: approximately $495 million that could be subject to U.S. federal tax when repatriated to the U.S. under section 1.245A-5(b) of the final Treasury regulations; and our accumulated earnings in India as of March 31, 2021. A portion of these indefinitely reinvested earnings may be subject to foreign and U.S. state tax consequences when remitted. The Company will continue to evaluate its position in the future based on its future strategy and cash needs.
The Company accounts for income tax uncertainties in accordance with ASC 740 Income Taxes, which prescribes a recognition threshold and measurement criteria for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Benefits from tax positions should be recognized in the financial statements only when it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority that would have full knowledge of all relevant information. A tax position that meets the more likely than not recognition threshold is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more likely than not recognition threshold should be recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more likely than not recognition threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met. ASC 740 also provides guidance on the accounting for and disclosure of liabilities for uncertain tax positions, interest and penalties.
102
| string | null | null |
Operating Leases, Future Minimum Payments Due | 257 | SEC-NUM |
Future minimum lease payments are as follows:
| | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | |
| | | July 31, 2022 |
| | | |
| | | |
| (Millions) | | Operating | | Finance |
| 2023 | | $ | 66 | | | $ | 14 | |
| 2024 | | 53 | | | 10 | |
| 2025 | | 40 | | | 3 | |
| 2026 | | 27 | | | 3 | |
| 2027 | | 22 | | | — | |
| Thereafter | | 49 | | | — | |
| Total future undiscounted lease payments | | 257 | | | 30 | |
| Less imputed interest | | 18 | | | — | |
| Total reported lease liability | | $ | 239 | | | $ | 30 | |
The following table summarizes cash flow and other information related to leases:
| | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | |
| | | | | |
| (Millions) | | 2022 | | 2021 |
| Cash paid for amounts included in the measurement of lease liabilities: | | | | |
| Operating cash flows from operating leases | | $ | 78 | | | $ | 79 | |
| | | | | |
| Financing cash flows from finance leases | | $ | 17 | | | $ | 5 | |
| | | | | |
| ROU assets obtained in exchange for lease obligations: | | | | |
| Operating leases | | $ | 79 | | | $ | 59 | |
| Finance leases | | $ | 16 | | | $ | 25 | |
| | | | | |
| | | | | |
| | | | | |
11. Taxes on EarningsThe provision for income taxes on earnings from continuing operations consists of the following:
| | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | |
| (Millions) | 2022 | | 2021 | | 2020 |
| Income taxes: | | | | | |
| Currently payable: | | | | | |
| Federal | $ | 160 | | | $ | 151 | | | $ | 152 | |
| State | 22 | | | 34 | | | 26 | |
| Non-U.S. | 15 | | | 6 | | | 3 | |
| | 197 | | | 191 | | | 181 | |
| Deferred: | | | | | |
| Federal | 29 | | | 102 | | | (12) | |
| State | (6) | | | 33 | | | 4 | |
| Non-U.S. | (2) | | | 2 | | | 1 | |
| | 21 | | | 137 | | | (7) | |
| | $ | 218 | | | $ | 328 | | | $ | 174 | |
| | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | |
| (Millions) | | 2022 | | 2021 | | 2020 |
| Earnings from continuing operations before income taxes: | | | | | | |
| United States | | $ | 948 | | | $ | 1,308 | | | $ | 737 | |
| Non-U.S. | | 27 | | | 28 | | | 29 | |
| | | $ | 975 | | | $ | 1,336 | | | $ | 766 | |
58
| string | null | null |
Total debt service obligation, 2022 | 840 | SEC-NUM |
CAESARS ENTERTAINMENT, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)proceeds received for the cost to replace damaged property were in excess of the respective carrying value of the assets. The property will remain closed until the second half of 2022 when construction of a new land-based casino is expected to be complete.Note 12. Long-Term Debt
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | December 31, 2021 | | December 31, 2020 |
| (Dollars in millions) | Final Maturity | | Rates | | Face Value | | Book Value | | Book Value |
| Secured Debt | | | | | | | | | |
| Baltimore Revolving Credit Facility | 2022 | | variable | | $ | — | | | $ | — | | | $ | — | |
| CRC Revolving Credit Facility | 2022 | | variable | | — | | | — | | | — | |
| Baltimore Term Loan | 2024 | | variable | | 282 | | | 275 | | | — | |
| CRC Term Loan | 2024 | | variable | | 4,512 | | | 4,190 | | | 4,133 | |
| CEI Revolving Credit Facility | 2025 | | variable | | — | | | — | | | — | |
| CRC Incremental Term Loan | 2025 | | variable | | 1,778 | | | 1,705 | | | 1,707 | |
| CRC Senior Secured Notes | 2025 | | 5.75% | | 1,000 | | | 985 | | | 981 | |
| CEI Senior Secured Notes | 2025 | | 6.25% | | 3,400 | | | 3,346 | | | 3,333 | |
| Convention Center Mortgage Loan | 2025 | | 7.85% | | 400 | | | 399 | | | 397 | |
| Unsecured Debt | | | | | | | | | |
| 5% Convertible Notes | 2024 | | 5.00% | | — | | | — | | | 288 | |
| CRC Notes | 2025 | | 5.25% | | — | | | — | | | 1,499 | |
| CEI Senior Notes | 2027 | | 8.125% | | 1,700 | | | 1,673 | | | 1,768 | |
| Senior Notes | 2029 | | 4.625% | | 1,200 | | | 1,183 | | | — | |
| Special Improvement District Bonds | 2037 | | 4.30% | | 49 | | | 49 | | | 51 | |
| Long-term notes and other payables | | | | | 2 | | | 2 | | | 2 | |
| Total debt | | 14,323 | | | 13,807 | | | 14,159 | |
| Current portion of long-term debt | | (70) | | | (70) | | | (67) | |
| Deferred finance charges associated with the CEI Revolving Credit Facility | | — | | | (15) | | | (19) | |
| Long-term debt | | $ | 14,253 | | | $ | 13,722 | | | $ | 14,073 | |
| | | | | | | |
| Unamortized premiums, discounts and deferred finance charges | | | | $ | 531 | | | $ | 883 | |
| Fair value | | $ | 14,713 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Annual Estimated Debt Service Requirements | | | | |
| | Years Ended December 31, | | | | |
| (In millions) | 2022 | | 2023 | | 2024 | | 2025 | | 2026 | | Thereafter | | Total |
| Annual maturities of long-term debt | $ | 70 | | | $ | 70 | | | $ | 4,714 | | | $ | 6,526 | | | $ | 3 | | | $ | 2,940 | | | $ | 14,323 | |
| Estimated interest payments | 770 | | | 790 | | | 790 | | | 540 | | | 200 | | | 320 | | | 3,410 | |
| Total debt service obligation (a) | $ | 840 | | | $ | 860 | | | $ | 5,504 | | | $ | 7,066 | | | $ | 203 | | | $ | 3,260 | | | $ | 17,733 | |
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_(a)Debt principal payments are estimated amounts based on contractual maturity and repayment dates. Interest payments are estimated based on the forward-looking LIBOR curve, where applicable, and include the estimated impact of the four interest rate swap agreements related to our CRC Credit Facility (see Note 8). Actual payments may differ from these estimates.Current Portion of Long-Term DebtThe current portion of long-term debt as of December 31, 2021 includes the principal payments on the term loans, other unsecured borrowings, and special improvement district bonds that are contractually due within 12 months. The Company may, from time to time, seek to repurchase its outstanding indebtedness. Any such purchases may be funded by existing cash balances or the incurrence of debt. The amount and timing of any repurchase will be based on business and market conditions, capital availability, compliance with debt covenants and other considerations.[Table of Contents](#i37dfc5eabc12461dbfc5ef573d80947e_7)96
| string | null | null |
Long-term debt | 66.1 | SEC-NUM |
[Table of Contents](#ic085909a172f44ef92ae922b1099b569_7)preliminary amount of goodwill were primarily based on anticipated strategic and synergistic benefits that are expected to be realized from the Bolder acquisition. These benefits include expanding the Company's surgical portfolio and utilizing GYN Surgical's sales and regulatory expertise to drive adoption and revenue growth. None of the goodwill is expected to be deductible for income tax purposes.
Fiscal 2021 Acquisitions
Mobidiag
On June 17, 2021, the Company completed the acquisition of Mobidiag Oy ("Mobidiag"), for a purchase price of $729.6 million. Mobidiag, located in Finland, manufactures molecular diagnostic solutions for gastrointestinal infections, antimicrobial resistance management and other infections. Mobidiag's results of operations are reported in the Company's Diagnostics reportable segment from the date of acquisition.
The total purchase price was allocated to Mobidiag's preliminary tangible and identifiable intangible assets and liabilities based on the estimated fair values as of June 17, 2021, as set forth below.
| | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | |
| Cash | | $ | 7.0 | |
| Accounts receivable | 4.2 | |
| Inventory | 12.1 | |
| | |
| Other assets | 29.6 | |
| Accounts payable and accrued expenses | (16.5) | |
| Other liabilities | (12.2) | |
| | |
| Identifiable intangible assets: | |
| | Developed technology | 285.0 | |
| | In-process research and development | 74.0 | |
| | Customer relationships | 20.9 | |
| | Trade names | 20.0 | |
| | |
| Long-term debt | (66.1) | |
| Deferred income taxes, net | (60.1) | |
| Goodwill | 431.7 | |
| Purchase Price | $ | 729.6 | |
In performing the preliminary purchase price allocation, the Company considered, among other factors, the intended future use of acquired assets, analysis of historical financial performance and estimates of future performance of Mobidiag's business. The allocation of the purchase price is preliminary as the Company continues to gather information supporting the acquired assets and liabilities, primarily related to deferred income taxes.
As part of the preliminary purchase price allocation, the Company determined the identifiable intangible assets are development technology, in-process research and development ("IPR&D"), customer relationships and trade names. The preliminary fair value of the intangible assets was estimated using the income approach, and the cash flow projections were discounted using rates ranging from 15.0% to 19.0%. The cash flows were based on estimates used to price the transaction, and the discount rates applied were benchmarked with reference to the implied rate of return from the transaction model and the weighted average cost of capital.
The developed technology assets are comprised of know-how, patents and technologies embedded in Mobidiag's products and relate to currently marketed products. The developed technology assets comprise the primary product families under the Novodiag and Amplidiag technology platforms.
The IPR&D project relates to an in-process project that had not reached technological feasibility as of the acquisition date and has no alternative future use. The primary basis for determining technological feasibility of the project is obtaining regulatory approval to market the underlying product. The asset recorded relates to one project, and the Company expects to complete the project in approximately three years. Given the uncertainties inherent with product development and introduction, 15
| string | null | null |
Remainder of 2022 | 134 | SEC-NUM |
| | | | | | |
| --- | --- | --- | --- | --- | --- |
| | | | | | |
| [Table of Contents](#i091a03213a4e4cb7a2bb5f39154aefe4_7) | Alphabet Inc. |
Note 8. Goodwill and Other Intangible AssetsGoodwillChanges in the carrying amount of goodwill for the nine months ended September 30, 2022 were as follows (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Google Services | | Google Cloud | | Other Bets | | Total |
| Balance as of December 31, 2021 | $ | 19,826 | | | $ | 2,337 | | | $ | 793 | | | $ | 22,956 | |
| Acquisitions | 1,146 | | | 4,875 | | | 113 | | | 6,134 | |
| Foreign currency translation and other adjustments | (227) | | | (23) | | | (6) | | | (256) | |
| Balance as of September 30, 2022 | $ | 20,745 | | | $ | 7,189 | | | $ | 900 | | | $ | 28,834 | |
Other Intangible AssetsInformation regarding purchased intangible assets was as follows (in millions):
| | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | |
| | As of December 31, 2021 |
| | GrossCarryingAmount | | AccumulatedAmortization | | NetCarryingAmount |
| Patents and developed technology | $ | 4,786 | | | $ | 4,112 | | | $ | 674 | |
| Customer relationships | 506 | | | 140 | | | 366 | |
| Trade names and other | 534 | | | 295 | | | 239 | |
| Total definite-lived intangible assets | 5,826 | | | 4,547 | | | 1,279 | |
| Indefinite-lived intangible assets | 138 | | | 0 | | | 138 | |
| Total intangible assets | $ | 5,964 | | | $ | 4,547 | | | $ | 1,417 | |
| | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | |
| | As of September 30, 2022 |
| | GrossCarryingAmount | | AccumulatedAmortization | | NetCarryingAmount |
| Patents and developed technology | $ | 1,364 | | | $ | 491 | | | $ | 873 | |
| Customer relationships | 891 | | | 224 | | | 667 | |
| Trade names and other | 528 | | | 110 | | | 418 | |
| Total definite-lived intangible assets | 2,783 | | | 825 | | | 1,958 | |
| Indefinite-lived intangible assets | 234 | | | 0 | | | 234 | |
| Total intangible assets | $ | 3,017 | | | $ | 825 | | | $ | 2,192 | |
For the nine months ended September 30, 2022, $4.2 billion of intangible assets that were fully amortized have been removed from gross intangible assets and accumulated amortization.Amortization expense relating to purchased intangible assets was $219 million and $113 million for the three months ended September 30, 2021 and 2022, respectively, and $651 million and $505 million for the nine months ended September 30, 2021 and 2022, respectively.Expected amortization expense related to purchased intangible assets held as of September 30, 2022 was as follows (in millions):
| | | | | | |
| --- | --- | --- | --- | --- | --- |
| | | | | | |
| Remainder of 2022 | $ | 134 | |
| 2023 | 458 | |
| 2024 | 439 | |
| 2025 | 309 | |
| 2026 | 232 | |
| Thereafter | 386 | |
| Total | $ | 1,958 | |
26
| string | null | null |
Unrecognized Tax Benefits, Period Increase (Decrease) | 28 | SEC-NUM |
[Table of Contents](#id353055757fb42afb305a023bc295188_7)11. Income Taxes
| | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months EndedJune 30, | | Six Months EndedJune 30, |
| | 2022 | | 2021 | | 2022 | | 2021 |
| | (In percentages) |
| Effective income tax rate | 20 | | | 18 | | | 19 | | | 19 | |
The effective income tax rate for the three months ended June 30, 2022, was higher compared to the same period in 2021, primarily due to increased earnings in high tax jurisdictions. The effective income tax rate for the six months ended June 30, 2022, was comparable to the same period in 2021 due to $28 million of non-recurring impacts of uncertain tax positions mainly arising from lending terms related to internal treasury operations in the three months ended March 31, 2021, offset by increased earnings in high tax jurisdictions in the three months ended June 30, 2021.In December 2017, the Tax Cuts and Jobs Act (the "TCJA") was enacted and was effective January 1, 2018. The U.S. Treasury has issued various final and proposed regulatory packages supplementing the TCJA provisions since 2018, which the Company does not expect to have a material impact on current or future income tax expense.In December 2021, the U.S. Treasury and the IRS released final regulations addressing various aspects of the foreign tax credit regime. The regulation was published in the federal register on January 4, 2022, and became effective in the six months ended June 30, 2022. The final regulations included guidance with respect to the definition of foreign income taxes, the eligibility of foreign taxes for the foreign tax credit, and the allocation and apportionment of interest expense. The impact of the retroactive effect of the interest expense apportionment rules for the 2020 and 2021 tax years was not material to the Company's results of operations.The Company will continue to monitor the expected impacts of any new guidance on the Company's filing positions and will record the impacts as discrete income tax expense adjustments in the period the guidance is finalized or becomes effective.Due to the TCJA and uncertainty as to future foreign source income, the Company previously recorded a valuation allowance on a substantial portion of its foreign tax credits. The Company is currently evaluating tax planning strategies that would allow utilization of the Company's foreign tax credit carryforwards. Implementation of these strategies in future periods could reduce the level of valuation allowance that is needed, thereby decreasing the Company's effective tax rate.The Company's tax returns are under audit for the years 2013 through 2015 by the United States, Netherlands and Germany (the "Authorities").In September 2021, the Company received a draft joint audit report proposing adjustments to transfer pricing and the reallocation of income between the related jurisdictions. The Authorities also propose to apply these adjustments to open tax years through 2019. The Company is engaged in discussions with the Authorities to evaluate the proposals and is currently evaluating all potential remedies.As of June 30, 2022, the Company believes that an adequate provision for income taxes has been made for all open tax years related to the examination. However, the outcome of tax audits cannot be predicted with certainty. If any issues raised by the Authorities are resolved in a manner inconsistent with the Company's expectations or the Company is unsuccessful in defending its position, the Company could be required to adjust its provision for income taxes in the period such resolution occurs. If required, any such adjustments could be material to the statements of operations and cash flows in the period(s) recorded.In addition, the Company's Mexico tax returns are under audit for the years 2018 and 2019. On January 14, 2022, the Mexico tax authorities issued preliminary findings for disallowance of operating expenses on several of the applicable tax returns. The Company has analyzed the preliminary findings and does not expect any material impact to income tax expense.20
| string | null | null |
Renewal term option two (in months) | 24 | SEC-NUM |
NOTE 18. CONTRACTUAL COMMITMENTS, CONTINGENCIES, AND OFF-BALANCE SHEET ARRANGEMENTS Data Center AgreementsIn March 2010, the Company and IBM entered into an Information Technology Services Agreement (the “IT Services Agreement”), under which IBM provided certain aspects of the Company’s information technology infrastructure. Under the IT Services Agreement, IBM provided a broad range of technology services to the Company including supporting its mainframe, midrange, network and data center operations, as well as providing disaster recovery services. The migration of data center processing to IBM was completed in August 2012. The IT Services Agreement would have expired on June 30, 2022, but a two-year extension was signed in March 2015, amending the expiration date to June 30, 2024. In December 2019, the Company and IBM amended and restated the IT Services Agreement (the “Amended IT Services Agreement”), which now expires on June 30, 2027. The Company has the option of incorporating additional services into the Amended IT Services Agreement over time. The Company may renew the term of the Amended IT Services Agreement for up to one additional 12-month period. On July 28, 2021, the Company entered into a novation agreement with IBM (the “U.S. Novation Agreement”) pursuant to which IBM novated the Amended IT Services Agreement to Kyndryl, Inc., an entity formed in connection with IBM’s spin-off of its managed infrastructure services business (“Kyndryl”), effective September 1, 2021. Fixed minimum commitments remaining under the Amended IT Services Agreement at June 30, 2022 are $145.8 million through fiscal year 2027, the final year of the Amended IT Services Agreement. In December 2019, the Company and IBM entered into an information technology agreement for private cloud services (the “Private Cloud Agreement”) under which IBM will operate, manage and support the Company’s private cloud global distributed platforms and products, and operate and manage certain Company networks. The Private Cloud Agreement has an initial term of approximately 10 years and three months, expiring on March 31, 2030. As a result of the Private Cloud Agreement, the Company transferred certain of its employees in April 2020 to IBM and its affiliates, and such transferred employees are expected to continue providing services to the Company on behalf of IBM under the Private Cloud Agreement. Pursuant to the Private Cloud Agreement, the Company agreed to transfer the ownership of certain Company-owned hardware (the “Hardware”) located at Company facilities worldwide to IBM. The transfer of the Hardware and Maintenance Contracts to IBM closed on September 30, 2020 for a selling price of $18.0 million. On July 28, 2021, IBM novated the Private Cloud Agreement to Kyndryl, effective September 1, 2021, pursuant to the U.S. Novation Agreement. Fixed minimum commitments remaining under the Private Cloud Agreement at June 30, 2022 are $175.2 million through March 31, 2030, the final year of the contract.In March 2014, the Company and IBM United Kingdom Limited (“IBM UK”) entered into an Information Technology Services Agreement (the “EU IT Services Agreement”), under which IBM UK provides data center services supporting the Company’s technology outsourcing services for certain clients in Europe and Asia. The EU IT Services Agreement would have expired in October 2023. In December 2019, the Company amended the existing EU IT Services Agreement whereby the Company will migrate from the existing dedicated on-premises solution to a managed Broadridge private cloud environment provided by IBM, as well as extended the term of the EU IT Services Agreement to June 2029 (the “Amended EU IT Services Agreement”). The Company has the right to renew the term of the Amended EU IT Services Agreement for up to one additional 12-month period or one additional 24-month period. On August 19, 2021, the Company entered into a novation agreement with IBM UK pursuant to which IBM UK novated the EU IT Services Agreement to Kyndryl UK Limited, effective September 1, 2021. Fixed minimum commitments remaining under the Amended EU IT Services Agreement at June 30, 2022 are $26.0 million through fiscal year 2029, the final year of the contract. The total annual expenses related to these Kyndryl agreements and certain other data center arrangements was $198.3 million, $176.7 million, and $118.7 million, for the fiscal years ended June 30, 2022, 2021, and 2020, respectively.
90
| string | null | null |
OCI cash flow hedge gain (loss) before reclassification | 26.7 | SEC-NUM |
The Company’s commercial paper program requires the Company to maintain liquidity facilities either in an available amount equal to any outstanding notes from the program or in an amount sufficient to maintain the ratings assigned to the notes issued from the program. The Company’s commercial paper is rated AMB-1 by A.M. Best, P-3 by Moody’s and A-2 by S&P. The Company’s subsidiaries do not maintain commercial paper or other borrowing facilities. This program is currently backed up by the Credit Facility, of which $495.5 million was available at December 31, 2021, and $4.5 million letters of credit were outstanding.The Company did not use the commercial paper program during the years ended December 31, 2021 or 2020 and there were no amounts relating to the commercial paper program outstanding as of December 31, 2021 or 2020. Covenants The Credit Facility contains restrictive covenants including:(i)Maintenance of a maximum consolidated total debt to capitalization ratio on the last day of any fiscal quarter of not greater than 0.35 to 1.0, subject to certain exceptions; and(ii)Maintenance of a consolidated adjusted net worth in an amount not less than a “Minimum Amount” equal to the sum of (a) $4.20 billion, (b) 25% of consolidated net income (if positive) for each fiscal quarter ending after December 31, 2021 and (c) 25% of the net cash proceeds received from any capital contribution to, or issuance of any capital stock, disqualified capital stock and hybrid securities.In the event of a breach of certain covenants, all obligations under the Credit Facility, including unpaid principal and accrued interest and outstanding letters of credit, may become immediately due and payable. Interest Rate DerivativesIn March 2018, the Company exercised a series of derivative transactions it had entered into in 2017 to hedge the interest rate risk related to expected borrowing to finance the TWG acquisition. The Company determined that the derivatives qualified for hedge accounting as effective cash flow hedges and recognized a deferred gain of $26.7 million upon settlement that was reported through other comprehensive income. The deferred gain is being recognized as a reduction in interest expense related to the 2023 Senior Notes, the 2028 Senior Notes and the 2048 Subordinated Notes on an effective yield basis. The amortization of the deferred gain was $3.0 million for the years ended December 31, 2021, 2020 and 2019. The remaining deferred gain as of December 31, 2021 and 2020 was $15.6 million and $18.6 million, respectively.
20. Equity Transactions Common StockChanges in the number of shares of common stock outstanding are as follows for the periods presented:
| | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | |
| | December 31, |
| | 2021 | | 2020 | | 2019 |
| Shares of common stock outstanding, beginning | 57,967,808 | | | 59,945,893 | | | 61,908,979 | |
| Vested restricted stock and restricted stock units, net (1) | 214,116 | | | 213,569 | | | 248,333 | |
| Issuance related to performance share units (1) | 91,845 | | | 157,155 | | | 117,581 | |
| Issuance related to ESPP | 113,555 | | | 90,166 | | | 88,498 | |
| Issuance related to MCPS | 2,703,911 | | | — | | | — | |
| Shares of common stock repurchased | (5,337,122) | | | (2,438,975) | | | (2,417,498) | |
| Shares of common stock outstanding, ending | 55,754,113 | | | 57,967,808 | | | 59,945,893 | |
(1)Vested restricted stock, restricted stock units and performance share units are shown net of shares of common stock retired to cover participant income tax liabilities.
The Company is authorized to issue 800,000,000 shares of common stock. In addition, 150,001 shares of Class B common stock and 400,001 shares of Class C common stock are authorized but have not been issued. Stock RepurchaseIn January and May 2021, the Company’s Board of Directors (the “Board”) authorized the Company to repurchase up to $600.0 million and $900.0 million, respectively, aggregate cost at purchase of its outstanding common stock. F-62
| string | null | null |
Amortized cost basis of the closed portfolios used in hedging relationships | 17.2 | SEC-NUM |
[Table of](#ib75bcbc468d84ef69c01608c63d6bb19_10) [Content](#ib75bcbc468d84ef69c01608c63d6bb19_10)The following table presents the change in fair value for derivatives designated as fair value hedges as well as the offsetting change in fair value on the hedged item for the three-month and nine-month periods ended September 30, 2022 and 2021.
| | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months EndedSeptember 30, | | Nine Months EndedSeptember 30, |
| (dollar amounts in millions) | | 2022 | | 2021 | | 2022 | | 2021 |
| Interest rate contracts | | | | | | | | |
| Change in fair value of interest rate swaps hedging investment securities (1) | | $ | 340 | | | $ | 2 | | | $ | 926 | | | $ | 39 | |
| Change in fair value of hedged investment securities (1) | | (324) | | | — | | | (914) | | | (40) | |
| | | | | | | | | |
| | | | | | | | | |
| Change in fair value of interest rate swaps hedging long-term debt (2) | | (178) | | | (22) | | | (314) | | | (95) | |
| Change in fair value of hedged long term debt (2) | | 178 | | | 22 | | | 315 | | | 96 | |
(1)Recognized in Interest income—available-for-sale securities—taxable in the [Unaudited Condensed Consolidated Statements of Income](#ib75bcbc468d84ef69c01608c63d6bb19_175).(2)Recognized in Interest expense—long-term debt in the [Unaudited Condensed Consolidated Statements of Income](#ib75bcbc468d84ef69c01608c63d6bb19_175).As of September 30, 2022, and December 31, 2021, the following amounts were recorded on the balance sheet related to cumulative basis adjustments for fair value hedges.
| | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Amortized Cost | | Cumulative Amount of Fair Value Hedging Adjustment To Hedged Items |
| (dollar amounts in millions) | September 30, 2022 | | December 31, 2021 | | September 30, 2022 | | December 31, 2021 |
| Assets | | | | | | | |
| Investment securities (1) | $ | 18,026 | | | $ | 17,150 | | | $ | (1,032) | | | $ | (117) | |
| | | | | | | | |
| Liabilities | | | | | | | |
| Long-term debt (2) | 4,095 | | | 1,981 | | | (271) | | | 45 | |
| | | | | | | | |
(1)Amounts include the amortized cost basis of closed portfolios used to designate hedging relationships under the portfolio layer method. The hedged item is a layer of the closed portfolio which is expected to be remaining at the end of the hedging relationship. As of September 30, 2022, the amortized cost basis of the closed portfolios used in these hedging relationships was $17.2 billion, the cumulative basis adjustments associated with these hedging relationships was $892 million, and the amounts of the designated hedging instruments were $9.4 billion.(2)Excluded from the above table are the cumulative amount of fair value hedge adjustments remaining for long-term debt for which hedge accounting has been discontinued in the amounts of $(69) million at September 30, 2022 and $17 million at December 31, 2021.Cash Flow HedgesAt September 30, 2022, Huntington has $22.3 billion of interest rate swaps and collars. These are designated as cash flow hedges for variable rate commercial loans. The change in the fair value of a derivative instrument designated as a cash flow hedge is initially recognized in OCI and is reclassified into income when the hedged item impacts earnings. The initial premium paid for the interest rate collar contracts represents the time value of the contracts and is not included in the measurement of hedge effectiveness. Any change in fair value related to time value is recognized in OCI. The initial premium paid is amortized on a straight line basis as a reduction to interest income over the contractual life of these contracts.Gains and (losses) on interest rate floors, floor spreads, and swaps recognized in other comprehensive income (loss) after-tax were $(456) million and $(29) million for the three-month periods ended September 30, 2022 and 2021, respectively. For the nine-month periods ended September 30, 2022 and 2021, gains and (losses) on interest rate floors and swaps recognized in other comprehensive income were $(782) million and $(131) million, respectively. Derivatives used in mortgage banking activitiesMortgage loan origination hedging activityHuntington’s mortgage origination hedging activity is related to economically hedging Huntington’s mortgage pricing commitments to customers and the secondary sale to third parties. The value of a newly originated mortgage is not firm until the interest rate is committed or locked. Forward commitments to sell economically hedge the possible loss on interest rate lock commitments due to interest rate change. The net asset position of these derivatives at September 30, 2022 and December 31, 2021 were $41 million and $15 million, respectively. At September 30, 2022 and December 31, 2021, Huntington had commitments to sell residential real estate loans of $1.2 billion and $2.1 billion, respectively. These contracts mature in less than one year.80 Huntington Bancshares Incorporated
| string | null | null |
Deferred purchase price in connection with acquisitions of real estate | 185,179 | SEC-NUM |
| | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | |
| Alexandria Real Estate Equities, Inc.Consolidated Statements of Cash Flows(In thousands)(Unaudited) |
| | Nine Months Ended September 30, |
| | 2022 | | 2021 |
| Financing Activities: | | | |
| Borrowings from secured notes payable | $ | 31,436 | | | $ | — | |
| Repayments of borrowings from secured notes payable | (934) | | | (17,108) | |
| Payment for the defeasance of secured note payable | (198,304) | | | — | |
| Proceeds from issuance of unsecured senior notes payable | 1,793,318 | | | 1,743,716 | |
| Repayments of unsecured senior notes payable | — | | | (650,000) | |
| Premium paid for early extinguishment of debt | — | | | (66,829) | |
| Borrowings from unsecured senior line of credit | 1,180,000 | | | 2,101,000 | |
| Repayments of borrowings from unsecured senior line of credit | (1,180,000) | | | (2,101,000) | |
| Proceeds from issuances under commercial paper program | 11,661,500 | | | 21,850,000 | |
| Repayments of borrowings under commercial paper program | (11,544,685) | | | (21,200,000) | |
| Payments of loan fees | (35,598) | | | (16,870) | |
| Taxes paid related to net settlement of equity awards | (33,105) | | | (23,495) | |
| Proceeds from issuance of common stock | 845,746 | | | 2,758,545 | |
| Dividends on common stock | (564,118) | | | (482,408) | |
| Contributions from and sales of noncontrolling interests | 1,463,454 | | | 629,138 | |
| Distributions to and purchases of noncontrolling interests | (139,685) | | | (81,926) | |
| Net cash provided by financing activities | 3,279,025 | | | 4,442,763 | |
| | | | |
| Effect of foreign exchange rate changes on cash and cash equivalents | (624) | | | 342 | |
| | | | |
| Net increase (decrease) in cash, cash equivalents, and restricted cash | 450,941 | | | (229,651) | |
| Cash, cash equivalents, and restricted cash as of the beginning of period | 415,227 | | | 597,705 | |
| Cash, cash equivalents, and restricted cash as of the end of period | $ | 866,168 | | | $ | 368,054 | |
| | | | |
| Supplemental Disclosure and Non-Cash Investing and Financing Activities: | | | |
| Cash paid during the period for interest, net of interest capitalized | $ | 67,852 | | | $ | 110,391 | |
| Accrued construction for current-period additions to real estate | $ | 553,928 | | | $ | 377,193 | |
| Right-of-use asset | $ | 21,776 | | | $ | 27,802 | |
| Lease liability | $ | (21,776) | | | $ | (27,802) | |
| Contribution of assets from real estate joint venture partner | $ | 19,146 | | | $ | 118,750 | |
| Issuance of noncontrolling interest to joint venture partner | $ | (19,146) | | | $ | (118,750) | |
| Consolidation of real estate assets in connection with our acquisition of partner’s interest in unconsolidated real estate joint venture | $ | — | | | $ | 19,613 | |
| Assumption of secured note payable in connection with acquisition of partner’s interest in unconsolidated real estate joint venture | $ | — | | | $ | (14,558) | |
| Deferred purchase price in connection with acquisitions of real estate | $ | — | | | $ | (185,179) | |
| Assignment of secured notes payable in connection with the sale of real estate | $ | — | | | $ | 28,200 | |
The accompanying notes are an integral part of these consolidated financial statements.
9
| string | null | null |
Business combination, step acquisition, equity interest in acquiree, remeasurement gain | 732 | SEC-NUM |
[Table of Contents](#i329aa562213e420593df15cade55885b_7)
The preliminary allocation of the purchase price is as follows:
| | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | |
| (In millions) | | August 1, 2022 |
| Cash and cash equivalents | | $ | 462 | |
| Accounts receivable | | 393 | |
| Inventories | | 373 | |
| Other assets, current | | 74 | |
| Fixed assets | | 294 | |
| Intangible assets | | 965 | |
| Goodwill | | 866 | |
| Other assets | | 287 | |
| Accounts payable | | (412) | |
| Accrued liabilities | | (445) | |
| Contract liabilities, current | | (21) | |
| Other long-term liabilities | | (496) | |
| Net assets acquired | | $ | 2,340 | |
| Less: Fair value of non-controlling interests | | (22) | |
| Less: Fair value of previously held TCC equity investments | | (1,427) | |
| Total cash consideration | | $ | 891 | |
The excess purchase price over the estimated fair value of the net assets acquired was recognized as goodwill and totaled $866 million, which is not deductible for tax purposes. Accounts receivable and current liabilities were stated at their historical carrying value, which approximates fair value given the short-term nature of these assets and liabilities. The estimate of fair value for inventory and fixed assets was based on an assessment of the acquired assets' condition as well as an evaluation of the current market value of such assets.
The Company recorded intangible assets based on its preliminary estimate of fair value which consisted of the following:
| | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | |
| (In millions) | Estimated Useful Life (in years) | | Intangible Assets Acquired |
| Customer relationships | 23 | | $ | 497 | |
| Technology | 7 | | 220 | |
| Trademark | 26 | | 180 | |
| Backlog | 1 | | 60 | |
| Land use rights | 45 | | 8 | |
| Total intangible assets acquired | | | $ | 965 | |
The valuation of intangible assets was determined using an income approach methodology including the multi-period excess earnings method and the relief from royalty method. Key assumptions used in estimating future cash flows included projected revenue growth rates, profit margins, discount rates, customer attrition rates and royalty rates among others. The projected future cash flows are discounted to present value using an appropriate discount rate. As of September 30, 2022, the Company has not finalized the process of allocating TCC's purchase price and valuing the acquired assets and liabilities.
The Company previously accounted for its minority ownership in TCC under the equity method of accounting. In connection with the transaction, the carrying value of the Company's previously held TCC equity investments were recognized at fair value at the date of acquisition using an income approach methodology. As a result, the Company recognized a $732 million non-cash gain within Other income (expense), net on the accompanying Unaudited Condensed Consolidated Statement of Operations. In addition, the assets, liabilities and results of operations of TCC are consolidated in the accompanying Unaudited Condensed Consolidated Financial Statements as of the date of acquisition and reported within the Company's HVAC segment. During the 22
| string | null | null |
Participants affected due to plan freeze | 60 | SEC-NUM |
pension plans and post-retirement medical plans. The Company employs the measurement date provisions of ASC 715, Compensation-Retirement Benefits, which require the measurement date of plan assets and liabilities to coincide with the sponsor’s year end.
Effective September 30, 2019, the IDEX Corporation Retirement Plan (“Plan”), a U.S. defined benefit plan, was amended to freeze the accrual of retirement benefits for all participants. This action impacted fewer than 60 participants, as the Plan had been closed to new entrants as of December 31, 2004 and frozen as of December 31, 2005 for all but certain older, longer service participants. Subsequent to the freeze, termination of the Plan was approved in November 2019. In addition, the Company recorded a settlement charge of $0.7 million in Other expense - net in the Consolidated Statements of Income for the year ended December 31, 2019.
Participants were notified in February 2020 and the Plan was terminated in May 2020. As a result of the termination, the settlement threshold was reached in early 2020 and the Company recorded a settlement charge of $0.9 million in Other expense - net in the Consolidated Statements of Income for the year ended December 31, 2020. The settlement also triggered the remeasurement of net periodic benefit cost resulting in a reduction of $1.0 million to Other expense - net in the Consolidated Statements of Income for the year ended December 31, 2020 as a result of significant decreases in discount rates and strong asset performance in 2020.
During the year ended December 31, 2021, the Company settled its remaining obligations under the U.S. pension plan through a combination of lump-sum payments to eligible participants who elected them, and through the purchase of annuities from Legal and General, an A rated third-party insurer. The Company recognized a net loss of $9.7 million, which was recorded within Other expense - net. The net loss consisted of $10.7 million related to previously deferred pension related costs, partially offset by $1.0 million related to an increase in plan assets remaining after the settlement. As of December 31, 2021, the Plan had surplus plan assets of approximately $10.2 million, representing cash equivalents held in a trust. These plan assets are included in Other current assets on the Company’s Consolidated Balance Sheets and will be used to fund the Company’s other retirement benefit plans over the next twelve months.
77
| string | null | null |
Approved return on equity, percentage | 9.3 | SEC-NUM |
[Table of Contents](#i9e3d7fad53bb42b083be8286e4319cd4_10) Evergy Metro 2021 TDCIn April 2021, the KCC issued an order adjusting Evergy Metro's retail prices to include updated transmission costs as reflected in the FERC TFR. The new prices were effective in May 2021 and are expected to decrease Evergy Metro's annual retail revenues by $2.4 million when compared to 2020.Evergy Kansas Central and Evergy Metro Earnings Review and Sharing Plan (ERSP)As part of their merger settlement agreement with the KCC, Evergy Kansas Central and Evergy Metro agreed to participate in an ERSP for the years 2019 through 2022. Under the ERSP, Evergy Kansas Central's and Evergy Metro's Kansas jurisdiction are required to refund to customers 50% of annual earnings in excess of their authorized return on equity of 9.3% to the extent the excess earnings exceed the amount of annual bill credits that Evergy Kansas Central and Evergy Metro agreed to provide in connection with the merger that resulted in the formation of Evergy. Evergy Kansas Central's and Evergy Metro's 2020 calculations of annual earnings did not result in a significant refund obligation. As of December 31, 2021, Evergy Kansas Central estimates its 2021 annual earnings will not result in a refund obligation. As of December 31, 2021, Evergy Metro estimates its 2021 annual earnings will result in a $2.0 million refund obligation. The final refund obligations for 2021 will be decided by the KCC and could vary from the current estimates.Evergy Kansas Central and Evergy Metro February 2021 Winter Weather Event AAO In February 2021, the KCC issued an emergency AAO directing all Kansas-jurisdictional natural gas and electric utilities, including Evergy Kansas Central and Evergy Metro, to defer to a regulatory asset or regulatory liability any extraordinary costs or revenues, including carrying costs, to provide electric service during the February 2021 winter weather event for consideration in future rate proceedings. As of December 31, 2021, Evergy Kansas Central had recognized a regulatory asset pursuant to the AAO of $121.5 million related to its costs incurred during the February 2021 winter weather event, primarily consisting of increased fuel and purchased power costs. As of December 31, 2021, Evergy Metro's Kansas jurisdiction had recognized a regulatory liability of $39.5 million related to its increased wholesale revenues during the February 2021 winter weather event.In July 2021, Evergy Kansas Central and Evergy Metro made a joint filing with the KCC regarding the timing and method of recovery or refund for costs and revenues deferred pursuant to the February 2021 winter weather event AAO. In the filing, Evergy Kansas Central and Evergy Metro requested to recover or refund, as appropriate, their deferred February 2021 winter weather event amounts to customers through their fuel recovery mechanisms over two years and one year, respectively, beginning in April 2022. As part of the filing, Evergy Metro also requested an approximately $6 million decrease to its February 2021 winter weather event refund to Kansas customers, which is not currently reflected in its regulatory liability for the February 2021 winter weather event, for jurisdictional allocation differences in its Kansas and Missouri fuel recovery mechanisms. In January 2022, KCC staff filed their report and recommendation regarding the February 2021 winter weather event and the related costs and revenues deferred by Evergy Kansas Central and Evergy Metro as a result of the AAO granted by the KCC in February 2021. The report concluded that the costs incurred and revenues earned by Evergy Kansas Central and Evergy Metro during the February 2021 winter weather event were prudent. The KCC staff also recommended the following: (1) that Evergy Metro extend the time period of its refund to customers from one year to two years; (2) that the KCC reject the approximately $6 million reduction in refund to customers requested by Evergy Metro due to jurisdictional allocation differences in its Kansas and Missouri fuel recovery mechanisms and (3) that Evergy Metro and the other active parties in the case work to determine the appropriate level of carrying charges that should apply to the amounts deferred related to the February 2021 winter weather event.A decision by the KCC regarding Evergy Kansas Central’s and Evergy Metro’s joint filing is expected in the first half of 2022.101
| string | null | null |
Lessee, Operating Lease, Liability, Payments, Due after Year Five | 571,431 | SEC-NUM |
Supplemental cash flow information related to leases was as follows:
| | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | |
| | Years Ended February 28 or 29 |
| (In thousands) | 2022 | | 2021 | | 2020 |
| Cash paid for amounts included in the measurement of lease liabilities: | | | | | |
| Operating cash flows from operating leases | $ | 72,371 | | | $ | 56,762 | | | $ | 57,145 | |
| Operating cash flows from finance leases | $ | 11,194 | | | $ | 8,517 | | | $ | 4,027 | |
| Financing cash flows from finance leases | $ | 11,923 | | | $ | 7,424 | | | $ | 4,151 | |
| | | | | | |
| Lease assets obtained in exchange for lease obligations: | | | | | |
| Operating leases | $ | 50,911 | | | $ | 14,010 | | | $ | 27,136 | |
| Finance leases | $ | 32,052 | | | $ | 45,857 | | | $ | 53,111 | |
Maturities of lease liabilities were as follows:
| | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | |
| | As of February 28, 2022 |
| (In thousands) | Operating Leases (1) | | Finance Leases (1) |
| Fiscal 2023 | $ | 70,500 | | | $ | 26,474 | |
| Fiscal 2024 | 69,983 | | | 32,059 | |
| Fiscal 2025 | 69,475 | | | 28,830 | |
| Fiscal 2026 | 63,946 | | | 29,778 | |
| Fiscal 2027 | 57,050 | | | 25,427 | |
| Thereafter | 571,431 | | | 191,876 | |
| Total lease payments | 902,385 | | | 334,444 | |
| Less: interest | (334,919) | | | (178,975) | |
| Present value of lease liabilities | $ | 567,466 | | | $ | 155,469 | |
(1) Lease payments exclude $43.9 million of legally binding minimum lease payments for leases signed but not yet commenced.
18.SUPPLEMENTAL CASH FLOW INFORMATIONSupplemental disclosures of cash flow information:
| | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | |
| | Years Ended February 28 or 29 |
| (In thousands) | 2022 | | 2021 | | 2020 |
| Cash paid for interest | $ | 91,686 | | | $ | 86,437 | | | $ | 85,607 | |
| Cash paid for income taxes | $ | 373,234 | | | $ | 247,748 | | | $ | 286,008 | |
| Non-cash investing and financing activities: | | | | | |
| Increase (decrease) in accrued capital expenditures | $ | 14,837 | | | $ | (25,595) | | | $ | 3,840 | |
| Increase in financing obligations | $ | — | | | $ | 4,726 | | | $ | 48,942 | |
See Note 17 for supplemental cash flow information related to leases.
19.COMMITMENTS AND CONTINGENCIES (A)LitigationOn October 31, 2017, Joshua Sabanovich v. CarMax Superstores California, LLC et al., a putative class action, was filed in the Superior Court of California, County of Stanislaus asserting wage and hour claims with respect to CarMax sales consultants and non-exempt employees in California. The asserted claims included failure to pay minimum wage; provide meal periods and rest breaks; pay statutory/contractual wages; reimburse for work-related expenses and provide accurate itemized wage statements; unfair competition; and Private Attorneys General Act (“PAGA”) claims. The Sabanovich lawsuit sought unspecified damages, restitution, statutory penalties, interest, cost and attorneys’ fees. The parties have reached a settlement resolving Sabanovich’s individual arbitration claims and PAGA claim, which did not have a material adverse effect on our financial condition, results of operations or cash flows. 85
| string | null | null |
Number of common and preferred stock authorized to issue | 185 | SEC-NUM |
[Table of Contents](#ie7fd49285ee64ca9b19be8c003cdb9a8_7)We have a share repurchase plan approved by our Board of Trust Managers which allows for the repurchase of up to $500.0 million of our common equity securities through open-market purchases, block purchases, and privately negotiated transactions. There were no repurchases during the three and nine months ended September 30, 2022. In October 2022, our Board of Trust Managers approved to increase the authorization for our common equity securities of approximately $269.5 million remaining under our share repurchase plan to $500.0 million. There were no repurchases subsequent to September 30, 2022 through the date of this filing, and the remaining dollar value of our common equity securities authorized to be repurchased under this program is $500.0 million. We currently have an automatic shelf registration statement which allows us to offer common shares, preferred shares, debt securities, or warrants, and our Amended and Restated Declaration of Trust provides we may issue up to 185 million shares of beneficial interest, consisting of 175 million common shares and 10 million preferred shares. In April 2022, we issued 2.9 million common shares in a public equity offering and received approximately $490.3 million in net proceeds, which we used to reduce borrowings under our unsecured line of credit. At September 30, 2022, we had approximately 106.5 million common shares outstanding, net of treasury shares and shares held in our deferred compensation arrangements, and no preferred shares outstanding. 5. Acquisitions and DispositionsAcquisition of Land. During the nine months ended September 30, 2022, we acquired for future development purposes two parcels of land totaling approximately 42.6 acres in Charlotte, North Carolina for an aggregate consideration of approximately $32.7 million, approximately 3.8 acres of land in Nashville, Tennessee for approximately $30.5 million, and approximately 15.9 acres of land in Richmond, Texas for approximately $7.8 million. During the nine months ended September 30, 2021, we acquired for future development purposes approximately 14.6 acres of land in The Woodlands, Texas for approximately $9.3 million and approximately 0.2 acres of land in St. Petersburg, Florida for approximately $2.1 million. We did not acquire any land during the three months ending September 30, 2022 or 2021.Asset Acquisition of Operating Properties. On April 1, 2022, we purchased the remaining 68.7% ownership interests in two unconsolidated discretionary investment funds (collectively, the "Funds") for cash consideration of approximately $1.1 billion, after adjusting for our assumption of approximately $515 million of existing secured mortgage debt of the Funds which remained outstanding. As a result of this acquisition, we now own 100% ownership interests in 22 multifamily communities comprised of 7,247 units located in Houston, Austin, Dallas, Tampa, Raleigh, Orlando, Washington D.C., Charlotte, and Atlanta. After obtaining 100% of the ownership interests, we consolidated the Funds as of April 1, 2022. Prior to the acquisition, we accounted for our 31.3% ownership interests in each of these Funds in accordance with the equity method of accounting.We accounted for this transaction as an asset acquisition and remeasured our previously held 31.3% ownership interests in the Funds to fair value at the acquisition date. As a result of this remeasurement, we recognized a gain of approximately $474.1 million. Upon consolidation, the total consideration was allocated to assets and liabilities based on relative fair value, resulting in an increase in assets comprised of $2.1 billion of real estate assets, $44.0 million of in-place leases and $24.7 million of other assets and an increase in liabilities made up of $514.6 million of secured debt, $39.2 million of other liabilities, and approximately $7.6 million of net below market leases. In August 2021, we acquired one operating property comprised of 368 apartment homes located in St. Petersburg, Florida for approximately $176.3 million. During the nine months ended September 30, 2021, we also acquired one operating property comprised of 328 apartment homes located in Franklin, Tennessee for approximately $105.3 million and one operating property comprised of 430 apartment homes located in Nashville, Tennessee for approximately $186.3 million.Sale of Operating Property. During the nine months ended September 30, 2022, we sold one operating property comprised of 245 apartment homes located in Largo, Maryland for approximately $71.9 million and recognized a gain of approximately $36.4 million. We did not sell any operating properties during the three months ended September 30, 2022 or the three or nine months ended September 30, 2021. 6. Investments in Joint VenturesOn April 1, 2022, the Company obtained 100% of the ownership interests in the Funds and, as discussed in Note 5, "Acquisitions and Dispositions," above, consolidated the Funds as of the acquisition date. Prior to the acquisition, we held a 31.3% ownership interest in the Funds, and accounted for these investments under the equity method. The following table summarizes the combined balance sheets and statements of income data for the Funds as of and for the periods presented:13
| string | null | null |
Exercisable as of period end (in shares) | 8.2 | SEC-NUM |
[Table of Contents](#i8e6404ebd98d416daa7f88f48159b601_7)EDWARDS LIFESCIENCES CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)14. COMMON STOCK (Continued)Stock option activity during the year ended December 31, 2021 under the Program and the Nonemployee Directors Program was as follows (in millions, except years and per-share amounts):
| | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Shares | | Weighted-AverageExercisePrice | | Weighted-AverageRemainingContractualTerm | | AggregateIntrinsic Value |
| Outstanding as of December 31, 2020 | 14.3 | | | $ | 41.27 | | | | | |
| Options granted | 1.6 | | | 94.04 | | | | | |
| Options exercised | (3.4) | | | 23.84 | | | | | |
| Options forfeited | (0.2) | | | 67.89 | | | | | |
| Outstanding as of December 31, 2021 | 12.3 | | | 52.84 | | | 3.5 years | | $ | 943.1 | |
| Exercisable as of December 31, 2021 | 8.2 | | | 41.84 | | | 2.6 years | | $ | 719.7 | |
| Vested and expected to vest as of December 31, 2021 | 11.7 | | | 51.74 | | | 3.4 years | | $ | 911.4 | |
The following table summarizes nonvested restricted stock unit activity during the year ended December 31, 2021 under the Program and the Nonemployee Directors Program (in millions, except per-share amounts):
| | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | |
| | Shares | | Weighted-AverageGrant-DateFair Value |
| Nonvested as of December 31, 2020 | 2.6 | | | $ | 57.59 | |
| Granted (a) | 0.8 | | | 92.95 | |
| Vested | (1.0) | | | 48.82 | |
| Forfeited | (0.1) | | | 66.54 | |
| Nonvested as of December 31, 2021 | 2.3 | | | 73.94 | |
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_(a) The shares granted include 0.1 million shares of market-based restricted stock units granted during 2021, which represents the target number of shares to be issued, and 0.1 million shares related to a previous year's grant of market-based restricted stock units since the payout percentage achieved at the end of the performance period was in excess of target. As described above, the actual number of shares ultimately issued is determined based on the Company's total stockholder return relative to a selected industry peer group.
The intrinsic value of stock options exercised and restricted stock units vested during the years ended December 31, 2021, 2020, and 2019 were $359.8 million, $323.5 million, and $382.1 million, respectively. The intrinsic value of stock options is calculated as the amount by which the market price of the Company's common stock exceeds the exercise price of the option. During the years ended December 31, 2021, 2020, and 2019, the Company received cash from exercises of stock options of $82.2 million, $79.2 million, and $110.4 million, respectively, and tax benefits from exercises of stock options and vesting of restricted stock units of $76.5 million, $72.1 million, and $85.1 million, respectively. The total grant-date fair value of stock options vested during the years ended December 31, 2021, 2020, and 2019 were $36.2 million, $34.0 million, and $31.2 million, respectively.
As of December 31, 2021, the total remaining unrecognized compensation expense related to nonvested stock options, restricted stock units, and employee stock purchase subscriptions amounted to $162.3 million, which will be amortized over the weighted-average remaining requisite service period of 30 months.
78
| string | null | null |
Restricted stock rights, granted upon settlement (in shares) | 2,777 | SEC-NUM |
[Table of Contents](#i8fbc3dcd16fb4e35b37f64f296545b43_13)
As of December 31, 2021, we had recorded a share-based compensation liability related to compensation payments under our annual performance plans for 2021 which the Company determined to settle amounts not yet paid in stock as opposed to cash. During the three months ended March 31, 2022, we settled the share-based compensation liability by granting 2,777 thousand RSUs that vested during the first quarter shortly after grant. The number of shares issued was based on the Company’s closing stock price on the date of grant. The impact of this settlement was recorded in “Additional Paid-In-Capital” in our condensed consolidated statement of changes in shareholders’ equity for the three months ended March 31, 2022.
At March 31, 2022, $511 million of total unrecognized compensation cost related to RSUs is expected to be recognized over a weighted-average period of 1.70 years. Of the total unrecognized compensation cost, $40 million was related to performance-based RSUs, which is expected to be recognized over a weighted-average period of 1.37 years.
11. Restructuring
During 2019, we began implementing a plan aimed at refocusing our resources on our largest opportunities and removing unnecessary levels of complexity from certain parts of our business. We substantially completed all actions under our plan and accrued for these costs accordingly as of December 31, 2021. The remaining activity under the plan is primarily related to cash outlays to be made over time to impacted personnel.
The following table summarizes accrued restructuring and related costs included in “Accrued expenses and other liabilities” and “Other liabilities” in our condensed consolidated balance sheet and the cumulative charges incurred (amounts in millions):
| | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | |
| | Severance and employee related costs | | | | Other costs | | Total |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| Balance at December 31, 2021 | $ | 64 | | | | | $ | 21 | | | $ | 85 | |
| | | | | | | | |
| Cash payments | (12) | | | | | (8) | | | (20) | |
| Non-cash charge and other adjustment | (3) | | | | | — | | | (3) | |
| Balance at March 31, 2022 | $ | 49 | | | | | $ | 13 | | | $ | 62 | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
12. Interest and Other Expense (Income), Net
Interest and other expense (income), net is comprised of the following (amounts in millions):
| | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | For the Three Months Ended March 31, | |
| | | | | | | 2022 | | 2021 | | | | | |
| Interest income | | | | | | $ | (1) | | | $ | (1) | | | | | | |
| Interest expense from debt and amortization of debt discount and deferred financing costs | | | | | | 27 | | | 28 | | | | | | |
| Realized and unrealized loss (gain) on equity investment ([Note 5](#i8fbc3dcd16fb4e35b37f64f296545b43_235)) | | | | | | (11) | | | — | | | | | | |
| Other expense (income), net | | | | | | (1) | | | 3 | | | | | | |
| Interest and other expense (income), net | | | | | | $ | 14 | | | $ | 30 | | | | | | |
23
| string | null | null |
Exercised (in dollars per share) | 19.45 | SEC-NUM |
The following table presents a summary of the Company’s outstanding and exercisable stock option activity:
| | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Number of Options | | Weighted-Average Exercise Price | | Weighted-Average Remaining Contractual Term (Years) | | Aggregate Intrinsic Value (in millions) |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| Outstanding at January 1. 2021 | — | | | $— | | | — | | | $— | |
| Assumed | 249,861 | | | 19.45 | | | — | | | — | |
| Granted | — | | | — | | | — | | | — | |
| Exercised | (4,000) | | | 19.45 | | | — | | | — | |
| Forfeited or expired | — | | | — | | | — | | | — | |
| Outstanding at December 31, 2021 | 245,861 | | | 19.45 | | | 3.1 | | 7 | |
| Exercisable at December 31, 2021 | 34,856 | | | $19.45 | | | 3.1 | | $1 | |
As of December 31, 2021, the aggregate intrinsic value of both outstanding and exercisable stock options was $7 million and $1 million, respectively.Summary of Share-Based Plans ActivityThe following table presents the activity related to the Company’s share-based plans (excluding the ESPP):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| | 2021 | | 2020 | | 2019 |
| | Units | | Weighted-Average Grant Price | | Units | | Weighted-Average Grant Price | | Units | | Weighted-Average Grant Price |
| Outstanding, January 1 | 3,496,231 | | | $34.37 | | | 3,000,224 | | | $36.71 | | | 2,893,281 | | | $34.04 | |
| Assumed | 82,013 | | | 49.95 | | | — | | | — | | | — | | | — | |
| Granted | 1,417,370 | | | 44.97 | | | 1,947,902 | | | 32.64 | | | 1,677,167 | | | 36.21 | |
| Vested & Distributed | (1,400,722) | | | 38.88 | | | (1,384,091) | | | 38.59 | | | (1,518,836) | | | 32.21 | |
| Forfeited | (91,936) | | | 35.00 | | | (67,804) | | | 35.89 | | | (51,388) | | | 38.29 | |
| Outstanding, December 31 | 3,502,956 | | | $38.23 | | | 3,496,231 | | | $34.37 | | | 3,000,224 | | | $36.71 | |
There are 44,911,455 shares of Company common stock available for awards to be granted under the Omnibus Plan and Directors Plan. In addition, there are 4,547,955 shares available for awards under the ESPP. Upon settlement of share-based awards, the Company generally issues new shares, but may also issue shares from treasury stock.Citizens measures compensation expense related to stock awards based upon the fair value of the awards on the grant date. Compensation expense is adjusted for forfeitures as they occur. The related expense is charged to earnings on a straight-line basis over the requisite service period (e.g., vesting period) of the award. With respect to performance-based stock awards, compensation expense is adjusted upward or downward based upon the probability of achievement of performance. Awards that continue to vest after retirement are expensed over the shorter of the period of time from grant date to the final vesting date or from the grant date to the date when an employee is retirement eligible. Awards granted to employees who are retirement eligible at the grant date are generally expensed immediately upon grant.Share-based compensation expense (including ESPP) was $59 million, $48 million, and $55 million for the years ended December 31, 2021, 2020 and 2019, respectively. At December 31, 2021, the total unrecognized compensation expense for nonvested equity awards granted was $53 million. This expense is expected to be recognized over a weighted-average period of approximately two years. No share-based compensation costs were capitalized during the years ended December 31, 2021, 2020 and 2019.Citizens recognized income tax benefits related to share-based compensation arrangements of $12 million, $8 million and $1 million for the years ended December 31, 2021, 2020 and 2019, respectively.
| | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | |
| | | Citizens Financial Group, Inc. | 131 |
| string | null | null |
Initial Offering Period | November 22, 2011 | SEC-NUM |
[Table of Contents](#i5ec3aabfaa534f9c8fa2d2a5b7677d19_7)
APTIV PLCNOTES TO CONSOLIDATED FINANCIAL STATEMENTS1. GENERALGeneral and basis of presentation—“Aptiv,” the “Company,” “we,” “us” and “our” refer to Aptiv PLC (formerly known as Delphi Automotive PLC), a public limited company formed under the laws of Jersey on May 19, 2011, which completed an initial public offering on November 22, 2011, and its consolidated subsidiaries. On December 4, 2017, following the spin-off of Delphi Technologies, the Company changed its name to Aptiv PLC and its NYSE symbol to “APTV.”The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).Nature of operations—Aptiv is a leading global technology and mobility architecture company primarily serving the automotive sector. We deliver end-to-end mobility solutions enabling our customers' transition to more electrified, software-defined vehicles. We design and manufacture vehicle components and provide electrical, electronic and active safety technology solutions to the global automotive and commercial vehicle markets. Aptiv is one of the largest vehicle technology suppliers and our customers include the 25 largest automotive original equipment manufacturers (“OEMs”) in the world. Aptiv operates 127 major manufacturing facilities and 12 major technical centers utilizing a regional service model that enables the Company to efficiently and effectively serve its global customers from best cost countries. Aptiv has a presence in 46 countries and has approximately 18,900 scientists, engineers and technicians focused on developing market relevant product solutions for its customers.
2. SIGNIFICANT ACCOUNTING POLICIESConsolidation—The consolidated financial statements include the accounts of Aptiv and the subsidiaries in which Aptiv holds a controlling financial or management interest and variable interest entities of which Aptiv has determined that it is the primary beneficiary. Aptiv’s share of the earnings or losses of non-controlled affiliates, over which Aptiv exercises significant influence (generally a 20% to 50% ownership interest), is included in the consolidated operating results using the equity method of accounting. When Aptiv does not have the ability to exercise significant influence (generally when ownership interest is less than 20%), investments in non-consolidated affiliates without readily determinable fair value are measured at cost, less impairments, adjusted for observable price changes in orderly transactions for identical or similar investments of the same issuer, while investments in publicly traded equity securities are measured at fair value based on quoted prices for identical assets on active market exchanges as of each reporting date. The Company monitors its investments in affiliates for indicators of other-than-temporary declines in value on an ongoing basis. If the Company determines that such a decline has occurred, an impairment loss is recorded, which is measured as the difference between carrying value and estimated fair value. Estimated fair value is generally determined using an income approach based on discounted cash flows or negotiated transaction values.Intercompany transactions and balances between consolidated Aptiv businesses have been eliminated.During the years ended December 31, 2021, 2020 and 2019, Aptiv received dividends of $6 million, $9 million and $9 million, respectively, from its equity method investments. The dividends were recognized as a reduction to the investment and represented a return on investment included in cash flows from operating activities.Aptiv's equity investments without readily determinable fair value totaled $30 million and $113 million as of December 31, 2021 and 2020, respectively, and are classified within other long-term assets in the consolidated balance sheets. Aptiv's investments in publicly traded equity securities totaled $66 million as of December 31, 2021 and are classified within other long-term assets in the consolidated balance sheet. There were no publicly traded equity securities held as of December 31, 2020. Refer to Note 5. Investments in Affiliates for further information regarding Aptiv's equity investments.Use of estimates—Preparation of consolidated financial statements in conformity with U.S. GAAP requires the use of estimates and assumptions that affect amounts reported therein. Generally, matters subject to estimation and judgment include amounts related to accounts receivable realization, inventory obsolescence, asset impairments, useful lives of intangible and fixed assets, deferred tax asset valuation allowances, income taxes, pension benefit plan assumptions, accruals related to litigation, warranty costs, environmental remediation costs, contingent consideration arrangements, worker’s compensation accruals and healthcare accruals. Due to the inherent uncertainty involved in making estimates, including the duration and severity of the impacts of the COVID-19 pandemic and the ongoing global supply chain disruptions, actual results reported in future periods may be based upon amounts that differ from those estimates.Revenue recognition—Revenue is measured based on consideration specified in a contract with a customer. Customer contracts generally are represented by a combination of a current purchase order and a current production schedule issued by the customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. From time to time, Aptiv enters into pricing agreements with its customers that provide for 70
| string | null | null |
Repurchase of senior notes, percent | 100 | SEC-NUM |
[Table of Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)Borrowings under the Second Amended and Restated Credit Agreement bear interest based on, at our option, either (1) the applicable fixed rate plus 1.00% to 1.75% or (2) the daily rate plus 0% to 0.75%, in each case, depending on Copart’s consolidated total net leverage ratio. Additionally, the unused revolving commitments under the Second Amended and Restated Credit Agreement are subject to the payment of a customary commitment fee at a range of 0.175% to 0.275%, depending on Copart’s consolidated total net leverage ratio. The applicable fixed rates described above with respect to borrowings denominated in (1) U.S. Dollars is SOFR plus certain “spread adjustments” described in the Second Amended and Restated Credit Agreement, (2) Pounds Sterling is SONIA plus certain “spread adjustments” described in the Second Amended and Restated Credit Agreement, (3) Euro is EURIBOR, and (4) Canadian Dollars is CDOR. The Company had no outstanding borrowings under the Revolving Loan Facility as of as of July 31, 2022 or 2021.
The Company’s obligations under the Second Amended and Restated Credit Agreement are guaranteed by certain of the Company’s domestic subsidiaries meeting materiality thresholds set forth in the Second Amended and Restated Credit Agreement. Such obligations, including the guaranties, are secured by substantially all of the assets of the Company and the assets of the subsidiary guarantors pursuant to a Security Documents Confirmation Agreement as part of the Second Amended and Restated Credit Agreement.
The Second Amended and Restated Credit Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict the Company and its subsidiaries’ ability to, among other things, incur indebtedness, grant liens, merge or consolidate, dispose of assets, make investments, make acquisitions, enter into transactions with affiliates, pay dividends, or make distributions on and repurchase stock, in each case subject to certain exceptions. The Company is also required to maintain compliance, measured at the end of each fiscal quarter, with a consolidated total net leverage ratio and a consolidated interest coverage ratio. The Second Amended and Restated Credit Agreement contains no restrictions on the payment of dividends and other restricted payments, as defined, as long as (1) the consolidated total net leverage ratio, as defined, both before and after giving effect to any such dividend or restricted payment on a pro forma basis, is less than 3.25:1, in an unlimited amount, (2) if clause (1) is not available, so long as the consolidated total net leverage ratio both before and after giving effect to any such dividend on a pro forma basis is less than 3.50:1, in an aggregate amount not to exceed the available amount, as defined, and (3) if clauses (1) and (2) are not available, in an aggregate amount not to exceed $50.0 million; provided, that, minimum liquidity, as defined, shall be not less than $75.0 million both before and after giving effect to any such dividend or restricted payment. As of July 31, 2022, the consolidated total net leverage ratio was (0.80):1. Minimum liquidity requirement as of July 31, 2022 was $2.6 billion. Accordingly, the Company does not believe that the provisions of the Second Amended and Restated Credit Agreement represent a significant restriction to its ability to pay dividends or to the successful future operations of the business. The Company has not paid a cash dividend since becoming a public company in 1994. The Company was in compliance with all covenants related to the Second Amended and Restated Credit Agreement as of July 31, 2022.
Related to the execution of the second Amended and Restated Credit Agreement, the Company incurred $2.7 million in costs, which was capitalized as debt issuance fees. The debt discount is amortized to interest expense over the term of the respective debt instruments and are classified as reductions of the outstanding liability.
Note Purchase Agreement
On December 3, 2014, the Company entered into a Note Purchase Agreement and sold to certain purchasers (collectively, the “Purchasers”) $400.0 million in aggregate principal amount of senior secured notes (the “Senior Notes”) consisting of (i) $100.0 million aggregate principal amount of 4.07% Senior Notes, Series A, due December 3, 2024; (ii) $100.0 million aggregate principal amount of 4.19% Senior Notes, Series B, due December 3, 2026; (iii) $100.0 million aggregate principal amount of 4.25% Senior Notes, Series C, due December 3, 2027; and (iv) $100.0 million aggregate principal amount of 4.35% Senior Notes, Series D, due December 3, 2029. Interest on each of the Senior Notes was due and payable quarterly, in arrears. The Company used proceeds from the Note Purchase Agreement for general corporate purposes.
Subsequently on May 24, 2022, the Company retired 100% of the Senior Notes. The Company paid $420.6 million to retire the Senior Notes which included an additional $16.8 million make-whole payment, to the holders of the Senior Notes, and $3.8 million in accrued interest.
74
| string | null | null |
Fair Value, Due after ten years | 2,110,874 | SEC-NUM |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 2021 | | 2020 |
| (In thousands) | Foreign Government | | Corporate | | Total | | Foreign Government | | Corporate | | Total |
| Allowance for expected credit losses, beginning of period | $ | 1,264 | | | $ | 518 | | | $ | 1,782 | | | $ | — | | | $ | — | | | $ | — | |
| Cumulative effect adjustment resulting from changes in accounting principles | — | | | — | | | — | | | 35,645 | | | — | | | 35,645 | |
| Expected credit losses on securities for which credit losses were not previously recorded | 19,072 | | | 16 | | | 19,088 | | | 12,590 | | | 7,058 | | | 19,648 | |
| Expected credit losses (gains) on securities for which credit losses were previously recorded | 2,438 | | | (513) | | | 1,925 | | | 373 | | | (3,841) | | | (3,468) | |
| Reduction due to disposals | (552) | | | (5) | | | (557) | | | (47,344) | | | (2,699) | | | (50,043) | |
| Allowance for expected credit losses, end of period | $ | 22,222 | | | $ | 16 | | | $ | 22,238 | | | $ | 1,264 | | | $ | 518 | | | $ | 1,782 | |
During the year ended December 31, 2021, the Company increased the allowance for expected credit losses utilizing its credit loss assessment process and inputs used in its credit loss model, primarily due to foreign government securities that had no reserve in prior periods. During the year ended December 31, 2020, the Company decreased the allowance for expected credit losses primarily due to the disposition of securities which previously had an allowance recorded. The amortized cost and fair value of fixed maturity securities at December 31, 2021, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because certain issuers may have the right to call or prepay obligations.
| | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | |
| (In thousands) | AmortizedCost (1) | | Fair Value |
| Due in one year or less | $ | 1,589,823 | | | $ | 1,586,470 | |
| Due after one year through five years | 7,574,884 | | | 7,659,231 | |
| Due after five years through ten years | 4,148,118 | | | 4,184,007 | |
| Due after ten years | 2,086,810 | | | 2,110,874 | |
| Mortgage-backed securities | 1,071,282 | | | 1,073,536 | |
| Total | $ | 16,470,917 | | | $ | 16,614,118 | |
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_(1) Amortized cost is reduced by the allowance for expected credit losses of $387 thousand related to held to maturity securities. At December 31, 2021 and 2020, there were no investments, other than investments in United States government and government agency securities, which exceeded 10% of common stockholders’ equity. At December 31, 2021, investments with a carrying value of $1,853 million were on deposit in custodial or trust accounts, of which $1,213 million was on deposit with insurance regulators, $602 million was on deposit in support of the Company’s underwriting activities at Lloyd’s, $33 million was on deposit as security for reinsurance clients and $5 million was on deposit as security for letters of credit issued in support of the Company’s reinsurance operations.
76
| string | null | null |
Company's assumed ultimate health care cost trend rate | 4.5 | SEC-NUM |
Assumptions
The weighted average assumptions used to determine net periodic benefit cost were as follows for the years ended December 31:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Pension Benefits | | |
| | United States Plans | | Non-United States Plans | | |
| | 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 | | | | | | |
| Discount rate | 2.84 | % | | 3.52 | % | | 4.42 | % | | 1.00 | % | | 1.45 | % | | 1.99 | % | | | | | | |
| Rate of compensation increases | 3.00 | % | | 3.00 | % | | 3.00 | % | | 2.55 | % | | 2.78 | % | | 4.54 | % | | | | | | |
| Expected return on plan assets | 7.23 | % | | 7.42 | % | | 7.67 | % | | 3.92 | % | | 3.91 | % | | 4.02 | % | | | | | | |
The weighted average assumptions used to determine benefit obligations were as follows as of December 31:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Pension Benefits | | |
| | United States Plans | Non-United States Plans | | |
| | 2021 | | 2020 | | 2021 | | 2020 | | | | |
| Discount rate | 3.08 | % | | 2.84 | % | | 1.42 | % | | 1.02 | % | | | | |
| Rate of compensation increases | 3.00 | % | | 3.00 | % | | 2.57 | % | | 2.55 | % | | | | |
The discount rate represents the interest rate used to determine the present value of the future cash flows currently expected to be required to settle the Company’s defined benefit plan obligations. The discount rates are derived using weighted average yield curves on AA-rated corporate bonds. The cash flows from the Company’s expected benefit obligation payments are then matched to the yield curve to derive the discount rates.
The Company’s assumption for the expected return on plan assets was determined by the weighted average of the long-term expected rate of return on each of the asset classes invested as of the balance sheet date. For plan assets invested in government bonds, the expected return was based on the yields on the relevant indices as of the balance sheet date. There is considerable uncertainty for the expected return on plan assets invested in equity and diversified growth funds.
Under the Company’s United States qualified retirement plan, participants have a notional retirement account that increases with pay and investment credits. The rate used to determine the investment credit (cash balance crediting rate) varies monthly and is equal to 1/12th of the yield on 30-year U.S. Government Treasury Bonds, with a minimum of 0.25%. At retirement, the account is converted to a monthly retirement benefit.
As of December 31, 2021, the Company’s health care cost trend rate for the next seven years was assumed to be 7.0% and the assumed ultimate cost trend rate was 4.5%. The Company assumed that ultimate cost trend rate is reached in 2027.
Assumed health care cost trend rates could have a significant effect on the amounts reported for the health care plans. A one-percentage- point change in assumed health care cost trend rates as of December 31, 2021 would have a de minimis effect on the total of service and interest cost and on the accumulated postretirement benefit obligation.
101
| string | null | null |
Committed contribution | 190.3 | SEC-NUM |
CHARLES RIVER LABORATORIES INTERNATIONAL, INC.NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)The composition of other current assets is as follows:
| | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | |
| | September 24, 2022 | | December 25, 2021 |
| | (in thousands) |
| Prepaid income tax | $ | 87,038 | | | $ | 84,725 | |
| Short-term investments | 950 | | | 1,063 | |
| Restricted cash | 1,376 | | | 4,023 | |
| Other receivables | 7,723 | | | 7,500 | |
| Other current assets | $ | 97,087 | | | $ | 97,311 | |
The composition of other assets is as follows:
| | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | |
| | September 24, 2022 | | December 25, 2021 |
| | (in thousands) |
| Venture capital investments | $ | 131,515 | | | $ | 149,640 | |
| Strategic equity investments | 158,582 | | | 51,712 | |
| Life insurance policies | 39,938 | | | 51,048 | |
| Long-term pension assets | 33,491 | | | 39,582 | |
| Other long-term income tax assets | 15,088 | | | 18,690 | |
| Restricted cash | 1,100 | | | 1,077 | |
| Other | 49,979 | | | 41,140 | |
| Other assets | $ | 429,693 | | | $ | 352,889 | |
The composition of other current liabilities is as follows:
| | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | |
| | September 24, 2022 | | December 25, 2021 |
| | (in thousands) |
| Current portion of operating lease right-of-use liabilities | $ | 44,613 | | | $ | 33,267 | |
| Customer contract deposits | 76,904 | | | 59,512 | |
| Accrued income taxes | 47,036 | | | 26,161 | |
| Other | 13,341 | | | 18,701 | |
| Other current liabilities | $ | 181,894 | | | $ | 137,641 | |
The composition of other long-term liabilities is as follows:
| | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | |
| | September 24, 2022 | | December 25, 2021 |
| | (in thousands) |
| Long-term pension liability, accrued executive supplemental life insurance retirement plan and deferred compensation plans | $ | 100,552 | | | $ | 104,944 | |
| U.S. Transition Tax | 32,324 | | | 43,057 | |
| Long-term deferred revenue | 24,161 | | | 20,578 | |
| Other | 37,673 | | | 74,280 | |
| Other long-term liabilities | $ | 194,710 | | | $ | 242,859 | |
6. VENTURE CAPITAL AND STRATEGIC EQUITY INVESTMENTSVenture capital investments were $131.5 million and $149.6 million as of September 24, 2022 and December 25, 2021, respectively. The Company’s total commitment to the venture capital funds as of September 24, 2022 was $190.3 million, of which the Company funded $125.1 million through that date. The Company received distributions totaling $3.7 million and $10.2 million for the three months ended September 24, 2022 and September 25, 2021, respectively. The Company received distributions totaling $7.7 million and $37.7 million for the nine months ended September 24, 2022 and September 25, 2021, respectively. The Company recognized net gains on venture capital investments of $3.0 million and net losses of $10.3 million for the three months ended September 24, 2022 and September 25, 2021, respectively, both of which were driven primarily by publicly-held investments. The Company recognized net losses on venture capital investments of $20.1 million for the nine months ended 19
| string | null | null |
Operating Lease, Weighted Average Remaining Lease Term | 7.3 | SEC-NUM |
| | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | |
| [Table of Contents](#i4a1c883199354127b0e9b0ddb9e84eb8_7) | | Notes to Consolidated Financial Statements — (continued)(In thousands of U.S. dollars, except share and per share amounts or as otherwise disclosed) | |
| ACCENTURE 2022 FORM 10-K | | F-22 |
| | | | |
8. LeasesAs a lessee, substantially all of our lease obligation is for office real estate. Our significant judgments used in determining our lease obligation include whether a contract is or contains a lease and the determination of the discount rate used to calculate the lease liability. We elected the practical expedient not to separate lease and associated non-lease components, accounting for them as a single combined lease component, for our office real estate and automobile leases. Our leases may include the option to extend or terminate before the end of the contractual term and are often non-cancelable or cancelable only by the payment of penalties. Our lease assets and liabilities include these options in the lease term when it is reasonably certain that they will be exercised. In certain cases, we sublease excess office real estate to third-party tenants.Lease assets and liabilities recognized at the lease commencement date are determined predominantly as the present value of the payments due over the lease term. Since we cannot determine the implicit rate in our leases, we use our incremental borrowing rate on that date to calculate the present value. Our incremental borrowing rate approximates the rate at which we could borrow, on a secured basis for a similar term, an amount equal to our lease payments in a similar economic environment.When we are the lessee, all leases are recognized as lease liabilities and associated lease assets on the Consolidated Balance Sheet. Lease liabilities represent our obligation to make payments arising from the lease. Lease assets represent our right to use an underlying asset for the lease term and may also include advance payments, initial direct costs, or lease incentives. Payments that depend upon an index or rate, such as the Consumer Price Index (CPI), are included in the recognition of lease assets and liabilities at the commencement-date rate. Other variable payments, such as common area maintenance, property and other taxes, utilities and insurance that are based on the lessor’s cost, are recognized in the Consolidated Income Statement in the period incurred.As of August 31, 2022 and 2021, we had no material finance leases. Operating lease expense is recorded on a straight-line basis over the lease term. Lease costs are as follows:
| | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | |
| | Fiscal |
| | 2022 | 2021 |
| Operating lease cost | $ | 769,806 | | $ | 765,232 | |
| Variable lease cost | 187,087 | | 176,426 | |
| Sublease income | (16,804) | | (23,717) | |
| Total | $ | 940,089 | | $ | 917,941 | |
Supplemental information related to operating lease transactions is as follows:
| | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | |
| | Fiscal |
| | 2022 | 2021 |
| Lease liability payments | $ | 730,815 | | $ | 753,167 | |
| Lease assets obtained in exchange for liabilities | 690,767 | | 599,866 | |
As of August 31, 2022 and 2021, our operating leases had a weighted average remaining lease term of 7.3 years and a weighted average discount rate of 3.7% and 3.9%, respectively.
| string | null | null |
Number of apartment homes included in operating apartment communities owned | 89,037 | SEC-NUM |
[Table of](#ia143979d54ef4089bc700f871e6b0e92_7) [Contents](#ia143979d54ef4089bc700f871e6b0e92_7)AVALONBAY COMMUNITIES, INC.NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited)
1. Organization, Basis of Presentation and Significant Accounting Policies
Organization and Basis of Presentation
AvalonBay Communities, Inc. (the "Company," which term, unless the context otherwise requires, refers to AvalonBay Communities, Inc. together with its subsidiaries) is a Maryland corporation that has elected to be treated as a real estate investment trust ("REIT") for federal income tax purposes under the Internal Revenue Code of 1986, as amended (the "Code"). The Company focuses on the development, redevelopment, acquisition, ownership and operation of multifamily communities in New England, the New York/New Jersey metro area, the Mid-Atlantic, the Pacific Northwest, and Northern and Southern California, as well as in the Company's expansion markets of Raleigh-Durham and Charlotte, North Carolina, Southeast Florida, Dallas and Austin, Texas, and Denver, Colorado.
At June 30, 2022, the Company owned or held a direct or indirect ownership interest in 299 operating apartment communities containing 89,037 apartment homes in 12 states and the District of Columbia, of which 17 communities were under development and two were under redevelopment. The Company also has an ownership interest in The Park Loggia. The Park Loggia contains 172 for-sale residential condominiums and 66,000 square feet of commercial space, of which 151 condominiums have been sold and the leasing of the commercial space has been completed as of June 30, 2022. The Company also owned or held a direct or indirect ownership interest in land or rights to land on which the Company expects to develop an additional 32 communities that, if developed as expected, will contain an estimated 10,913 apartment homes.
The interim unaudited financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements required by GAAP have been condensed or omitted pursuant to such rules and regulations. These unaudited financial statements should be read in conjunction with the financial statements and notes included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the operating results for the full year. Management believes the disclosures are adequate to ensure the information presented is not misleading. In the opinion of management, all adjustments and eliminations, consisting only of normal, recurring adjustments necessary for a fair presentation of the financial statements for the interim periods, have been included.
Capitalized terms used without definition have meanings provided elsewhere in this Form 10-Q.
Earnings per Common Share
Basic earnings per share is computed by dividing net income attributable to common stockholders by the weighted average number of shares outstanding during the period. All outstanding unvested restricted share awards contain rights to non-forfeitable dividends and participate in undistributed earnings with common shareholders and, accordingly, are considered participating securities that are included in the two-class method of computing basic earnings per share ("EPS"). Both the unvested restricted shares and other potentially dilutive common shares, and the related impact to earnings, are considered when calculating earnings per share on a diluted basis. The Company's earnings per common share are determined as follows (dollars in thousands, except per share data):5
| string | null | null |
Commitment to investment in consolidated projects | 141.6 | SEC-NUM |
[Table of Contents](#i36695dc5143241f795c32e47bf5f4b3d_7)CBRE GROUP, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)In addition, as of December 31, 2021, we had issued numerous non-recourse carveout, completion and budget guarantees relating to development projects for the benefit of third parties. These guarantees are commonplace in our industry and are made by us in the ordinary course of our Real Estate Investments business. Non-recourse carveout guarantees generally require that our project-entity borrower not commit specified improper acts, with us potentially liable for all or a portion of such entity’s indebtedness or other damages suffered by the lender if those acts occur. Completion and budget guarantees generally require us to complete construction of the relevant project within a specified timeframe and/or within a specified budget, with us potentially being liable for costs to complete in excess of such timeframe or budget. While there can be no assurance, we do not expect to incur any material losses under these guarantees.An important part of the strategy for our Real Estate Investments business involves investing our capital in certain real estate investments with our clients. These co-investments generally total up to 2.0% of the equity in a particular fund. As of December 31, 2021, we had aggregate commitments of $127.1 million to fund these future co-investments. Additionally, an important part of our Real Estate Investments business strategy is to invest in unconsolidated real estate subsidiaries as a principal (in most cases co-investing with our clients). As of December 31, 2021, we had committed to fund $40.7 million of additional capital to these unconsolidated subsidiaries and $141.6 million to consolidated projects.14.Employee Benefit PlansStock Incentive Plans2012 Equity Incentive Plan and 2017 Equity Incentive PlanOur 2012 Equity Incentive Plan (the 2012 Plan) and 2017 Equity Incentive Plan (the 2017 Plan) were adopted by our board of directors and approved by our stockholders on May 8, 2012 and May 19, 2017, respectively. Both the 2012 Plan and 2017 Plan authorized the grant of stock-based awards to our employees, directors and independent contractors. Our 2012 Plan was terminated in May 2017 in connection with the adoption of our 2017 Plan. Our 2017 Plan was terminated in May 2019 in connection with the adoption of our 2019 Equity Incentive Plan (the 2019 Plan), which is described below. At termination of the 2012 Plan, no unissued shares from the 2012 Plan were allocated to the 2017 Plan for potential future issuance. At termination of the 2017 Plan, no unissued shares from the 2017 Plan were allocated to the 2019 Plan for potential future issuance. Since our 2012 Plan and 2017 Plan have been terminated, no new awards may be granted under them. As of December 31, 2021, assuming the maximum number of shares under our performance-based awards will later be issued, 30,148 outstanding restricted stock unit (RSU) awards to acquire shares of our Class A common stock granted under the 2012 Plan remain outstanding according to their terms, and we will continue to issue shares to the extent required under the terms of such outstanding awards. Shares underlying awards that expire, terminate or lapse under the 2012 Plan will not become available for grant under the 2017 Plan or the 2019 Plan. As of December 31, 2021, 3,591,138 outstanding RSU awards to acquire shares of our Class A common stock granted under the 2017 Plan remain outstanding according to their terms, and we will continue to issue shares to the extent required under the terms of such outstanding awards (noting that any shares granted above target will get deducted from the 2019 Plan reserve as noted below). Shares underlying awards outstanding under the 2017 Plan at termination that are subsequently canceled, forfeited or terminated without issuance to the holder thereof will be available for grant under the 2019 Plan.2019 Equity Incentive PlanOur 2019 Plan was adopted by our board of directors on March 1, 2019 and approved by our stockholders on May 17, 2019. The 2019 Plan authorizes the grant of stock-based awards to employees, directors and independent contractors. Unless terminated earlier, the 2019 Plan will terminate on March 1, 2029. A total of 9,900,000 shares of our Class A common stock are reserved for issuance under the 2019 Plan, less 189,499 shares granted under the 2017 Plan between March 1, 2019, the date our board of directors approved the plan, and May 17, 2019, the date our stockholders approved the 2019 Plan. Additionally, as mentioned above, shares underlying awards outstanding under the 2017 Plan at termination that are subsequently canceled, forfeited or terminated without issuance to the holder thereof will be available for reissuance under the 2019 Plan. As of December 31, 2021, 748,003 shares were cancelled and 564,503 shares were withheld for payment of taxes under the 2017 Plan and added to the authorized pool for the 2019 Plan, bringing the total authorized amount under the 2019 Plan to 11,023,007 shares of our Class A common stock.100
| string | null | null |
Maximum Shares Available for Grant under PLC LTIP | 25,665,448 | SEC-NUM |
[Table of Contents](#i5ec3aabfaa534f9c8fa2d2a5b7677d19_7)
investments in affiliates in the consolidated balance sheet, based on the preliminary fair value of its investment in Motional. The Company recognized a pre-tax gain of approximately $1.4 billion in the consolidated statement of operations (approximately $5.32 per diluted share for the year ended December 31, 2020), net of transaction costs of $22 million, based on the difference between the carrying value of its contribution to Motional and the preliminary fair value of its investment in Motional. The estimated fair value of Aptiv’s ownership interest in Motional was determined primarily based on third-party valuations and management estimates, generally utilizing income and market approaches. Determining the fair value of Motional and the underlying assets required the use of management’s judgment and involved significant estimates and assumptions with respect to the timing and amount of future cash flows, market rate assumptions, projected growth rates and margins, and appropriate discount rates, among other items. The estimated fair value was determined on a preliminary basis using information available in the first quarter of 2020 and was finalized in the first quarter of 2021. The effects of this transaction would not materially impact the Company’s reported results for any period presented, and the transaction did not meet the criteria to be reflected as a discontinued operation.In connection with the closing of the transaction, Aptiv and Motional entered into various agreements to facilitate an orderly transition and to provide a framework for their relationship going forward, which included a transition services agreement. The transition services primarily involve Aptiv providing certain administrative services to Motional for a period of up to 24 months after the closing date. These agreements are not material to Aptiv. The Company’s investment in Motional is accounted for using the equity method of accounting and Aptiv recognized an equity loss of $215 million and $98 million, net of tax, during the years ended December 31, 2021 and 2020, respectively. Refer to Note 5. Investments in Affiliates for further information on Aptiv’s equity method investments. The pre-tax loss of Aptiv’s autonomous driving operations that were contributed to the joint venture on March 26, 2020, included within Aptiv’s consolidated operating results, were $41 million and $172 million for the years ended December 31, 2020 and 2019, respectively.
21. SHARE-BASED COMPENSATIONLong Term Incentive PlanThe PLC LTIP allows for the grant of awards of up to 25,665,448 ordinary shares for long-term compensation. The PLC LTIP is designed to align the interests of management and shareholders. The awards can be in the form of shares, options, stock appreciation rights, restricted stock, RSUs, performance awards and other share-based awards to the employees, directors, consultants and advisors of the Company. The Company has awarded annual long-term grants of RSUs under the PLC LTIP in order to align management compensation with Aptiv’s overall business strategy. In addition, the Company has competitive and market-appropriate ownership requirements for its directors and officers. All of the RSUs granted under the PLC LTIP are eligible to receive dividend equivalents for any dividend paid from the grant date through the vesting date. Dividend equivalents are generally paid out in ordinary shares upon vesting of the underlying RSUs. Board of Director AwardsAptiv has granted RSUs to the Board of Directors as detailed in the table below:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Grant Date | | RSUs granted | | Grant Date Fair Value (1) | | Vesting Date | | Shares Issued Upon Vesting | | Fair Value of Shares at Issuance | | Shares Withheld to Cover Withholding Taxes |
| (dollars in millions) |
| | | | | | | | | | | | | |
| April 2021 | | 17,589 | | | $ | 3 | | | April 2022 | | N/A | | N/A | | N/A |
| April 2020 | | 48,745 | | | 3 | | | April 2021 | | 41,896 | | | 6 | | | 6,849 | |
| April 2019 | | 20,765 | | | 2 | | | April 2020 | | 23,816 | | | 1 | | | 2,041 | |
(1)Determined based on the closing price of the Company’s ordinary shares on the date of the grant.Executive AwardsAptiv has made annual grants of RSUs to its executives in February of each year beginning in 2012. These awards include a time-based vesting portion and a performance-based vesting portion, as well as continuity awards in certain years. The time-based RSUs, which make up 40% (25% prior to 2021) of the awards for Aptiv’s officers and 50% for Aptiv’s other executives, vest ratably over three years beginning on the first anniversary of the grant date. The performance-based RSUs, which make up 60% (75% prior to 2021) of the awards for Aptiv’s officers and 50% for Aptiv’s other executives, vest at the completion of a three-year performance period if certain targets are met. Each executive will receive between 0% and 200% (0% to 150% for the 2019 and 2020 grants based on the executive performance grant modification in 2020 described below) of his or her target 115
| string | null | null |
Total film costs | 45.2 | SEC-NUM |
[Table of Contents](#i3d0ebbc4e2a2420f98ed7e6fe698936a_7) HASBRO, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements — (Continued)
Programming costs are included in other assets and consist of the following at December 26, 2021 and December 27, 2020:
| | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | |
| (In millions) | 2021 | | 2020 |
| Investment in Films and Television Programs: | | | |
| Individual Monetization | | | |
| Released, net of amortization | $ | 481.7 | | | $ | 428.0 | |
| Completed and not released | 18.5 | | | 17.3 | |
| In production | 151.6 | | | 185.5 | |
| Pre-production | 84.0 | | | 67.6 | |
| | 735.8 | | | 698.4 | |
| Film/TV Group Monetization (1) | | | |
| Released, net of amortization | 32.2 | | | — | |
| | | | |
| In production | 13.0 | | | — | |
| | | | |
| | 45.2 | | | — | |
| Investment in Other programming: | | | |
| Released, net of amortization | 5.3 | | | 13.7 | |
| Completed and not released | 0.4 | | | 2.1 | |
| In production | 12.6 | | | 5.4 | |
| Pre-production | 1.7 | | | 7.6 | |
| | 20.0 | | | 28.8 | |
| | | | |
| Total Program Investments | $ | 801.0 | | | $ | 727.2 | |
(1) Due to a monetization strategy change, during 2021 the Company began monetizing certain content assets as a film/TV group.
The Company recorded $628.6 million of program cost amortization related to released programming during 2021, consisting of the following:
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (In millions) | | Investment in Production | | Investment in Content | | Other | | Total |
| Program cost amortization | | $ | 541.8 | | | $ | 78.3 | | | $ | 8.5 | | | $ | 628.6 | |
Based on management’s total revenue estimates at December 26, 2021, the Company's expected future amortization expenses for capitalized programming costs over the next five years are as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (In millions) | | 2022 | | 2023 | | 2024 | | 2025 | | 2026 |
| Completed and not released | | $ | 19.6 | | | 0.4 | | | 0.4 | | | 0.3 | | | 0.3 | |
| Released | | 102.2 | | | 71.0 | | | 65.0 | | | 72.5 | | | 60.1 | |
| In production | | 46.6 | | | 49.2 | | | 8.7 | | | 7.9 | | | 7.1 | |
| Pre-production | | 6.0 | | | 8.0 | | | 10.0 | | | — | | | — | |
| Total | | $ | 174.4 | | | 128.6 | | | 84.1 | | | 80.7 | | | 67.5 | |
In the normal course of its business, the Company also enters into contracts related to obtaining right of first refusal ("first look deals") to purchase, distribute, or license certain entertainment projects or content. See note 20 for more information on the Company's expected future payments for first look deals.
| string | null | null |
Amount outstanding on credit facility | 180 | SEC-NUM |
AGILENT TECHNOLOGIES, INC.NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)
A summary of the standard warranty accrual activity is shown in the table below:
| | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | |
| | Nine Months Ended |
| | July 31, |
| | 2022 | | 2021 |
| | (in millions) |
| Standard warranty accrual, beginning balance | $ | 30 | | | $ | 32 | |
| Accruals for warranties including change in estimates | 38 | | | 41 | |
| Settlements made during the period | (37) | | | (41) | |
| Standard warranty accrual, ending balance | $ | 31 | | | $ | 32 | |
| | | | |
| Accruals for warranties due within one year | $ | 30 | | | $ | 31 | |
| Accruals for warranties due after one year | 1 | | | 1 | |
| Standard warranty accrual, ending balance | $ | 31 | | | $ | 32 | |
Bank Guarantees
Guarantees consist primarily of outstanding standby letters of credit and bank guarantees and were approximately $39 million and $46 million as of July 31, 2022 and October 31, 2021, respectively. A standby letter of credit is a guarantee of payment issued by a bank on behalf of us that is used as payment of last resort should we fail to fulfill a contractual commitment with a third party. A bank guarantee is a promise from a bank or other lending institution that if we default on a loan, the bank will cover the loss.
Contingencies We are involved in lawsuits, claims, investigations and proceedings, including, but not limited to, intellectual property, commercial, real estate, environmental and employment matters, which arise in the ordinary course of business. There are no matters pending that we currently believe are reasonably possible of having a material impact to our business, condensed consolidated financial condition, results of operations or cash flows.
13. SHORT-TERM DEBT Credit Facilities On March 13, 2019, we entered into a credit agreement with a group of financial institutions which, as amended, provided for a $1 billion five-year unsecured credit facility that will expire on March 13, 2024 and incremental term loan facilities in an aggregate amount of up to $500 million. On April 21, 2021, we entered into an incremental assumption agreement, pursuant to which the aggregate amount available for borrowing under the revolving credit facility was increased to $1.35 billion and the aggregate amount available for incremental facilities was refreshed to remain at $500 million. As of July 31, 2022, we had no borrowings outstanding under the credit facility and no borrowings under the incremental facilities. We were in compliance with the covenants for the credit facility during the nine months ended July 31, 2022.
Commercial Paper
Under our U.S. commercial paper program, the company may issue and sell unsecured, short-term promissory notes in the aggregate principal amount not to exceed $1.35 billion with up to 397-day maturities. At any point in time, the company intends to maintain available commitments under its revolving credit facility in an amount at least equal to the amount of the commercial paper notes outstanding. Amounts available under the program may be borrowed, repaid and re-borrowed from time to time. The proceeds from issuances under the program may be used for general corporate purposes. During the nine months ended July 31, 2022, we borrowed $940 million and repaid $760 million. As of July 31, 2022, we had borrowings of $180 million outstanding under our U.S. commercial paper program and had a weighted average annual interest rate of 2.43 percent.
26
| string | null | null |
Long-term line of credit/facility draws | 646 | SEC-NUM |
[Table of Contents](#i0fa971ac9e834218957059819155291f_10)Combined Notes to Consolidated Financial Statements(Dollars in millions, except per share data unless otherwise noted)
Note 17 — Debt and Credit Agreements
Long-Term Debt to AffiliatesIn connection with the debt obligations assumed by Exelon as part of the Constellation merger, Exelon and subsidiaries of Generation (former Constellation subsidiaries) entered into intercompany loan agreements that mirror the terms and amounts of the third-party debt obligations of Exelon, resulting in intercompany notes receivable at Exelon Corporate from Generation. As of December 31, 2021 and 2020, Exelon Corporate had $319 million and $324 million, respectively, recorded to intercompany notes receivable from Generation. In connection with the separation, on January 31, 2022, Exelon Corporate received cash from Generation of $258 million to settle the intercompany loan.Debt CovenantsAs of December 31, 2021, the Registrants are in compliance with debt covenants.Nonrecourse Debt Exelon, through Generation, has issued nonrecourse debt financing, in which approximately $2 billion of generating assets have been pledged as collateral as of December 31, 2021. Borrowings under these agreements are secured by the assets and equity of each respective project. The lenders do not have recourse against Exelon in the event of a default. If a specific project financing entity does not maintain compliance with its specific nonrecourse debt financing covenants, there could be a requirement to accelerate repayment of the associated debt or other borrowings earlier than the stated maturity dates. In these instances, if such repayment was not satisfied, the lenders or security holders would generally have rights to foreclose against the project-specific assets and related collateral. The potential requirement to satisfy its associated debt or other borrowings earlier than otherwise anticipated could lead to impairments due to a higher likelihood of disposing of the respective project-specific assets significantly before the end of their useful lives.Antelope Valley Solar Ranch One. In December 2011, the DOE Loan Programs Office issued a guarantee for up to $646 million for a nonrecourse loan from the Federal Financing Bank to support the financing of the construction of the Antelope Valley facility. The project became fully operational in 2014. The loan will mature on January 5, 2037. Interest rates on the loan were fixed upon each advance at a spread of 37.5 basis points above U.S. Treasuries of comparable maturity. The advances were completed as of December 31, 2015 and the outstanding loan balance will bear interest at an average blended interest rate of 2.82%. As of December 31, 2021 and December 31, 2020, approximately $435 million and $460 million were outstanding, respectively. In addition, letters of credit were issued to support Generation's equity investment in the project with $37 million outstanding as of December 31, 2021. In December 2017, Exelon’s interests in Antelope Valley were contributed to and are pledged as collateral for the CR financing structures referenced below.Continental Wind, LLC. In September 2013, Continental Wind, an indirect subsidiary of Exelon, completed the issuance and sale of $613 million senior secured notes. Continental Wind owns and operates a portfolio of wind farms in Idaho, Kansas, Michigan, Oregon, New Mexico, and Texas with a total net capacity of 667 MW. The net proceeds were distributed to Generation for its general business purposes. The notes are scheduled to mature on February 28, 2033. The notes bear interest at a fixed rate of 6.00% with interest payable semi-annually. As of December 31, 2021 and December 31, 2020, approximately $380 million and $415 million were outstanding, respectively.In addition, Continental Wind has a $122 million letter of credit facility and $4 million working capital revolver facility. Continental Wind has issued letters of credit to satisfy certain of its credit support and security obligations. As of December 31, 2021, the Continental Wind letter of credit facility had $115 million in letters of credit outstanding related to the project.In 2017, Exelon’s interests in Continental Wind were contributed to CRP. Refer to Note 23 - Variable Interest Entities for additional information on CRP. Renewable Power Generation. In March 2016, RPG, an indirect subsidiary of Exelon, issued $150 million aggregate principal amount of a nonrecourse senior secured notes. The net proceeds were distributed to Generation for paydown of long term debt obligations at Sacramento PV Energy and Constellation Solar Horizons and for general business purposes. The loan is scheduled to mature on March 31, 2035. The term loan 290
| string | null | null |
Gross unrecognized tax benefits and interest - current, Payments Due in Fiscal 2023 | 2 | SEC-NUM |
[Table of Contents](#i2ba0bd92bcb14d27a1d59d9667569d45_7)THE ESTÉE LAUDER COMPANIES INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTE 16 – COMMITMENTS AND CONTINGENCIES
Contractual ObligationsThe following table summarizes scheduled maturities of the Company’s contractual obligations for which cash flows are fixed and determinable as of June 30, 2022:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Payments Due in Fiscal | | |
| (In millions) | | Total | | 2023 | | 2024 | | 2025 | | 2026 | | 2027 | | Thereafter |
| Debt service (1) | | $ | 8,151 | | | $ | 429 | | | $ | 170 | | | $ | 665 | | | $ | 161 | | | $ | 661 | | | $ | 6,065 | |
| Unconditional purchase obligations (2) | | 4,742 | | | 2,852 | | | 705 | | | 637 | | | 132 | | | 133 | | | 283 | |
| Gross unrecognized tax benefits and interest – current (3) | | 2 | | | 2 | | | — | | — | | — | | — | | — |
| Transition Tax payable(4) | | 215 | | | 27 | | | 42 | | | 65 | | | 81 | | | — | | | — | |
| Total contractual obligations(5) | | $ | 13,110 | | | $ | 3,310 | | | $ | 917 | | | $ | 1,367 | | | $ | 374 | | | $ | 794 | | | $ | 6,348 | |
| | | | | | | | | | | | | | | |
(1)Includes long-term and current debt and the related projected interest costs. Refer to Note 7 – Leases for information regarding future minimum lease payments relating to the Company’s finance leases. Interest costs on long-term and current debt in fiscal 2023, 2024, 2025, 2026, 2027 and thereafter are projected to be $174 million, $170 million, $165 million, $161 million, $161 million and $1,765 million, respectively. Projected interest costs on variable rate instruments were calculated using market rates at June 30, 2022.(2)Unconditional purchase obligations primarily include: royalty payments pursuant to license agreements, inventory commitments, information technology contract commitments, capital expenditure commitments, advertising commitments and third-party distribution commitments. Future royalty and advertising commitments were estimated based on planned future sales for the term that was in effect at June 30, 2022, without consideration for potential renewal periods.(3)Refer to Note 9 – Income Taxes for information regarding unrecognized tax benefits. As of June 30, 2022, the noncurrent portion of the Company’s unrecognized tax benefits, including related accrued interest and penalties, was $73 million. At this time, the settlement period for the noncurrent portion of the unrecognized tax benefits, including related accrued interest and penalties, cannot be determined and therefore was not included.(4)The Transition Tax may be paid over an eight-year period and this amount represents the remaining liability as of June 30, 2022.(5)Refer to Note 7 – Leases for information regarding future minimum lease payments relating to the Company’s operating leases.
Legal Proceedings
The Company is involved, from time to time, in litigation and other legal proceedings incidental to its business, including product liability matters (including asbestos-related claims), advertising, regulatory, employment, intellectual property, real estate, environmental, trade relations, tax and privacy. Management believes that the outcome of current litigation and legal proceedings will not have a material adverse effect upon the Company’s business, results of operations, financial condition or cash flows. However, management’s assessment of the Company’s current litigation and other legal proceedings could change in light of the discovery of facts with respect to legal actions or other proceedings pending against the Company not presently known to the Company or determinations by judges, juries or other finders of fact which are not in accord with management’s evaluation of the possible liability or outcome of such litigation or proceedings. Reasonably possible losses in addition to the amounts accrued for such litigation and legal proceedings are not material to the Company’s consolidated financial statements.
F-63
| string | null | null |
Subsets and Splits