XML 41 R25.htm IDEA: XBRL DOCUMENT v3.22.0.1
Fair Value Measurements, Equity Investments and Other Financial Instruments
 12 Months Ended
Dec. 31, 2021
Fair Value Disclosures [Abstract]  
Fair Value Measurements, Equity Investments and Other Financial Instrument Fair Value Measurements, Equity Investments and Other Financial Instruments
Fair Value Measurements
Fair value represents 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. There are three levels to the fair value hierarchy as follows:
Level 1 - observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets;
Level 2 - inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly; and
Level 3 - unobservable inputs for which there is little or no market data, which may require the reporting entity to develop its own assumptions.
The fair value, measured on a recurring basis, of our financial instruments, using the fair value hierarchy under U.S. GAAP are included in the table below.
 December 31, 2021
(In millions)Total Fair ValueLevel 1Level 2Level 3
Cash equivalents$290.0 $290.0 $— $— 
Derivative financial and hedging instruments net asset:    
Foreign currency forward contracts$2.1 $— $2.1 $— 
 December 31, 2020
(In millions)Total Fair ValueLevel 1Level 2Level 3
Cash equivalents$235.1 $235.1 $— $— 
Derivative financial and hedging instruments net asset:    
Foreign currency forward and option contracts$0.3 $— $0.3 $— 
Cash equivalents - Our cash equivalents consisted of bank time deposits. Since these are short-term highly liquid investments with remaining maturities of 3 months or less, they present negligible risk of changes in fair value due to changes in interest rates and are classified as Level 1 financial instruments.
Derivative financial instruments - Our foreign currency forward contracts, foreign currency options, interest rate swaps and cross-currency swaps are recorded at fair value on our Consolidated Balance Sheets using a discounted cash flow analysis that incorporates observable market inputs. These market inputs include foreign currency spot and forward rates, and various interest rate curves, and are obtained from pricing data quoted by various banks, third-party sources and foreign currency dealers involving identical or comparable instruments. Such financial instruments are classified as Level 2.
Counterparties to these foreign currency forward contracts have at least an investment grade rating. Credit ratings on some of our counterparties may change during the term of our financial instruments. We closely monitor our counterparties’ credit ratings and, if necessary, will make any appropriate changes to our financial instruments. The fair value generally reflects the estimated amounts that we would receive or pay to terminate the contracts at the reporting date.
Foreign currency forward contracts and options are included in Prepaid expenses and other current assets and Other current liabilities on the Consolidated Balance Sheets as of December 31, 2021 and 2020.
Equity Investments
SEE maintains equity investments in companies which are accounted for under the measurement alternative described in ASC 321-10-35-2 ("ASC 321") for equity investments that do not have readily determinable fair values. We do not exercise significant influence over these companies. The following carrying value of these investments were included within Other non-current assets in our Consolidated Balance Sheets.
December 31,
(In millions)202120202019
Carrying value at the beginning of period$25.4 $7.5 $7.5 
Purchases14.7 2.6 — 
Impairments or downward adjustments— — — 
Upward adjustments6.6 15.1 — 
Currency translation on investments(0.9)0.2 — 
Carrying value at the end of period$45.8 $25.4 $7.5 
During the third quarter of 2021, SEE recorded an upward adjustment of $6.6 million, based on the valuation of additional equity issued by an investee which was deemed to be an observable transaction of a similar investment under ASC 321. The gain was recorded within Other (expense) income, net on the Consolidated Statements of Operations.
During the fourth quarter of 2020, SEE made an additional investment in one of our investees of $5.7 million, based on the balance sheet foreign exchange rate as of December 31, 2020. The equity issuance by the investee was subject to customary regulatory and statutory approval which was received during the first quarter of 2021. Upon approval, this investment converted to equity and is held as an equity investment valued under the measurement alternative in ASC 321.
Additionally, during the second quarter of 2021, SEE made an additional investment in another investee of $9.0 million. The investment continues to be accounted for under the measurement alternative of ASC 321, and SEE did not gain significant influence over the investee with the subsequent investment.
There have been no cumulative impairments or downward adjustments on any equity investments above, as of December 31, 2021. The cumulative upward adjustments of the equity investments was $21.7 million and $15.1 million as of December 31, 2021 and 2020, respectively.
Other Financial Instruments
The following financial instruments are recorded at fair value or at amounts that approximate fair value: (1) trade receivables, net, (2) certain other current assets, (3) accounts payable and (4) other current liabilities. The carrying amounts reported on our Consolidated Balance Sheets for the above financial instruments closely approximate their fair value due to the short-term nature of these assets and liabilities.
Other liabilities that are recorded at carrying value on our Consolidated Balance Sheets include our credit facilities and senior notes. We utilize a market approach to calculate the fair value of our senior notes. Due to their limited investor base and the face value of some of our senior notes, they may not be actively traded on the date we calculate their fair value. Therefore, we may utilize prices and other relevant information generated by market transactions involving similar securities, reflecting U.S. Treasury yields to calculate the yield to maturity and the price on some of our senior notes. These inputs are provided by an independent third party and are considered to be Level 2 inputs.
We derive our fair value estimates of our various other debt instruments by evaluating the nature and terms of each instrument, considering prevailing economic and market conditions, and examining the cost of similar debt offered at the balance sheet date. We also incorporated our credit default swap rates and currency specific swap rates in the valuation of each debt instrument, as applicable.
These estimates are subjective and involve uncertainties and matters of significant judgment, and therefore we cannot determine them with precision. Changes in assumptions could significantly affect our estimates.
The table below shows the carrying amounts and estimated fair values of our debt, excluding our lease liabilities:
 December 31, 2021December 31, 2020
(In millions)Interest rateCarrying
Amount		Fair
Value		Carrying
Amount		Fair
Value
Term Loan A Facility due August 2022$474.9 $474.9 $474.7 $474.7 
Term Loan A Facility due July 2023(1)
37.1 37.1 220.0 220.0 
Senior Notes due December 20224.875 %— — 423.3 446.0 
Senior Notes due April 20235.250 %423.8 441.9 422.9 450.8 
Senior Notes due September 2023(1)
4.500 %451.9 479.1 490.2 537.5 
Senior Notes due December 20245.125 %422.8 455.8 422.1 466.8 
Senior Notes due September 20255.500 %398.2 443.3 397.8 446.7 
Senior Secured Notes due October 20261.573 %595.0 581.3 — — 
Senior Notes due December 20274.000 %421.4 443.8 420.9 453.6 
Senior Notes due July 20336.875 %446.2 571.9 446.0 594.4 
Other foreign borrowings(1)
1.3 1.3 8.8 9.1 
Other domestic borrowings6.7 6.7 — — 
Total debt(2)
$3,679.3 $3,937.1 $3,726.7 $4,099.6 
 
       
(1)Includes borrowings denominated in currencies other than U.S. dollars.
(2)The carrying amount and estimated fair value of debt exclude lease liabilities.
In addition to the table above, the Company remeasures amounts related to certain equity compensation that are carried at fair value on a recurring basis in the Consolidated Financial Statements or for which a fair value measurement was required. Refer to Note 21, “Stockholders’ (Deficit) Equity,” for additional detail on share-based compensation. Included among our non-financial assets and liabilities that are not required to be measured at fair value on a recurring basis are inventories, net property and equipment, goodwill, intangible assets and asset retirement obligations.
Credit and Market Risk
Financial instruments, including derivatives, expose us to counterparty credit risk for nonperformance and to market risk related to changes in interest or currency exchange rates. We manage our exposure to counterparty credit risk through specific minimum credit standards, establishing credit limits, diversification of counterparties, and procedures to monitor concentrations of credit risk.
We do not expect any of our counterparties in derivative transactions to fail to perform as it is our policy to have counterparties to these contracts that have at least an investment grade rating. Nevertheless, there is a risk that our exposure to losses arising out of derivative contracts could be material if the counterparties to these agreements fail to perform their obligations. We will replace counterparties if a credit downgrade is deemed to increase our risk to unacceptable levels.
We regularly monitor the impact of market risk on the fair value and cash flows of our derivative and other financial instruments considering reasonably possible changes in interest and currency exchange rates and restrict the use of derivative financial instruments to hedging activities. We do not use derivative financial instruments for trading or other speculative purposes and do not use leveraged derivative financial instruments.
We continually monitor the creditworthiness of our diverse base of customers to which we grant credit terms in the normal course of business and generally do not require collateral. We consider the concentrations of credit risk associated with our trade accounts receivable to be commercially reasonable and believe that such concentrations do not leave us vulnerable to significant risks of near-term severe adverse impacts. The terms and conditions of our credit sales are designed to mitigate concentrations of credit risk with any single customer. Our sales are not materially dependent on a single customer or a small group of customers.