Company: LAWIL
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0000750004-25-000072
Chunk: 100

Company: Light & Wonder, Inc.
Filing Date: 2025-11-05
Form: 10-Q
Item: Part I, Item 8
Chunk 100
---
 are described below.Derivative Financial InstrumentsAs of September 30, 2025, we held the following derivative instruments that were accounted for pursuant to ASC 815:Interest Rate Swap ContractsWe use interest rate swap contracts as described below to manage exposure to interest rate fluctuations by reducing the uncertainty of future cash flows on a portion of our variable rate debt. 

22

In April 2022, we entered into interest rate swap contracts to hedge a portion of our interest expense associated with our variable rate debt to effectively fix the interest rate that we pay. These interest rate swap contracts were designated as cash flow hedges under ASC 815. We pay interest at a weighted-average fixed rate of 2.8320% and receive interest at a variable rate equal to one-month Chicago Mercantile Exchange Term SOFR. The total notional amount of these interest rate swaps was $700 million as of September 30, 2025. These hedges mature in April 2027. All gains and losses from these hedges are recorded in other comprehensive income (loss) until the future underlying payment transactions occur. Any realized gains or losses resulting from the hedges are recognized (together with the hedged transaction) as interest expense. We estimate the fair value of our interest rate swap contracts by discounting the future cash flows of both the fixed rate and variable rate interest payments based on market yield curves. The inputs used to measure the fair value of our interest rate swap contracts are categorized as Level 2 in the fair value hierarchy as established by ASC 820.The following table shows the loss and interest income on our interest rate swap contracts:Three Months Ended September 30,Nine Months Ended September 30,2025202420252024Loss recorded in accumulated other comprehensive loss, net of tax$(2)$(14)$(10)$(8)Interest income related to interest rate swap contracts recorded in interest expense3 5 8 14 We do not expect to reclassify material amounts from accumulated other comprehensive loss to interest expense in the next twelve months. The following table shows the effect of interest rate swap contracts designated as cash flow hedges on interest expense in the consolidated statements of income:Three Months Ended September 30,Nine Months Ended September 30,2025202420252024Total interest expense which reflects the effects of cash flow hedges$(84)$(73)$(229)$(223)Hedged item(5)(5)(15)(15)Derivative designated as hedging instrument8 10 23