Derivative Financial Instruments and Hedging Activities

12 Months Ended

Dec. 31, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments and Hedging Activities

Foreign Currency Derivatives

The Company uses derivatives to facilitate cross-currency corporate payments by writing derivatives to customers within its

cross-border solution. The Company writes derivatives, primarily foreign currency forward contracts, option contracts and

swaps, mostly with small and medium size enterprises that are customers and derives a currency spread from this activity.

Derivative transactions associated with the Company's cross-border solution include:

•Forward contracts, which are commitments to buy or sell at a future date a currency at a contract price and will be

settled in cash.

•Option contracts, which gives the purchaser the right, but not the obligation, to buy or sell within a specified time a

currency at a contracted price that may be settled in cash.

•Swap contracts, which are commitments to settlement in cash at a future date or dates, usually on an overnight basis.

The credit risk inherent in derivative agreements represents the possibility that a loss may occur from the nonperformance of a

counterparty to the agreements. Concentrations of credit and performance risk may exist with counterparties, which includes

customers and banking partners, as we are engaged in similar activities with similar economic characteristics related to

fluctuations in foreign currency rates. The Company performs a review of the credit risk of these counterparties at the inception

of the contract and on an ongoing basis. The Company also monitors the concentration of its contracts with any individual

counterparty against limits at the individual counterparty level. The Company anticipates that the counterparties will be able to

fully satisfy their obligations under the agreements, but takes action when doubt arises about the counterparties' ability to

perform. These actions may include requiring customers to post or increase collateral, and for all counterparties, if the

counterparty does not perform under the term of the contract, the contract may be terminated. The Company does not designate

any of its foreign exchange derivatives as hedging instruments in accordance with ASC 815, "Derivatives and Hedging".

The aggregate equivalent U.S. dollar notional amount of foreign exchange derivative customer contracts held by the Company

was $93.0 billion and $56.6 billion as of December 31, 2024 and December 31, 2023, respectively. The majority of customer

foreign exchange contracts are written in currencies such as the U.S. dollar, Canadian dollar, British pound, euro and Australian

dollar.

The following table summarizes the fair value of derivatives reported in the Consolidated Balance Sheets as of December 31,

2024 and 2023 (in millions):


	December 31, 2024
	Fair Value, Gross		Fair Value, Net
	Derivative Assets	Derivative Liabilities	Derivative Assets	Derivative Liabilities
Derivatives - undesignated:
Foreign exchange contracts	$1,406.7	$1,297.3	$833.7	$724.3


	December 31, 2023
	Fair Value, Gross		Fair Value, Net
	Derivative Assets	Derivative Liabilities	Derivative Assets	Derivative Liabilities
Derivatives - undesignated:
Foreign exchange contracts	$594.9	$519.4	$320.2	$244.7

The fair values of derivative assets and liabilities associated with contracts, which include netting terms that the Company

believes to be enforceable, have been recorded net within prepaid expenses and other current assets, other assets, other current

liabilities and other noncurrent liabilities in the Consolidated Balance Sheets. The Company receives cash from customers as

collateral for trade exposures, which is recorded within cash and cash equivalents, restricted cash and customer deposits liability

in the Consolidated Balance Sheets. At December 31, 2024 and December 31, 2023, the Company had received collateral of

$35.0 million and $39.2 million, respectively. The customer has the right to recall their collateral in the event exposures move

in their favor or below the collateral posting thresholds, they perform on all outstanding contracts and have no outstanding

amounts due to the Company, or they cease to do business with the Company. The Company has trading lines with several

banks, most of which require collateral to be posted if certain mark-to-market (MTM) thresholds are exceeded. Cash collateral

posted with banks is recorded within restricted cash and can be recalled in the event that exposures move in the Company’s

favor or move below the collateral posting thresholds. The Company does not offset fair value amounts recognized for the right

to reclaim cash collateral or the obligation to return cash collateral. At December 31, 2024 and December 31, 2023, the

Company had posted collateral of $718.1 million and $180.2 million, respectively, which was not offset against the fair value of

its derivatives. Cash flows from the Company's foreign currency derivatives are classified as operating activities within the

Consolidated Statements of Cash Flows. The following table presents the fair value of the Company’s derivative assets and

liabilities, as well as their classification on the accompanying Consolidated Balance Sheets, as of December 31, 2024 and

December 31, 2023 (in millions):


		2024	2023
	Balance Sheet Classification	Fair Value

Derivative Assets	Prepaid expenses and other current assets	$630.2	$254.2
Derivative Assets	Other assets	$203.5	$66.0
Derivative Liabilities	Other current liabilities	$538.6	$190.4
Derivative Liabilities	Other noncurrent liabilities	$185.7	$54.3

Cash Flow Hedges

As of December 31, 2024, the Company had the following outstanding interest rate swap derivatives that qualify as hedging

instruments within designated cash flow hedges of variable interest rate risk (in millions):


Notional Amount	Weighted Average Fixed Rate	Maturity Date
$500	4.01%	7/31/2025
$500	3.80%	1/31/2026
$1,500	4.15%	7/31/2026
$750	4.14%	1/31/2027
$500	4.19%	7/31/2027
$250	4.00%	1/31/2028
$500	3.19%	7/31/2028

The purpose of these contracts is to reduce the variability of cash flows in interest payments associated with the Company's

unspecified variable rate debt, the sole source of which is due to changes in the SOFR benchmark interest rate. The Company

has designated these derivative instruments as cash flow hedging instruments, which are expected to be highly effective at

offsetting changes in cash flows of the related underlying exposure. As a result, changes in fair value of the interest rate swaps

are recorded in accumulated other comprehensive loss. For each of these swap contracts, the Company pays a fixed monthly

rate and receives one month SOFR. The Company reclassified $46.3 million and $39.4 million from accumulated other

comprehensive loss resulting in a benefit to interest expense, net for the years ended December 31, 2024 and 2023, respectively,

related to these interest rate swap contracts. Cash flows related to the Company's interest rate swap derivatives are classified as

operating activities within the Consolidated Statements of Cash Flows, as such cash flows relate to hedged interest payments

are recorded in operating activities.

For derivatives accounted for as hedging instruments, the Company formally designates and documents, at inception, the

financial instrument as a hedge of a specific underlying exposure, the risk management objective and the strategy for

undertaking the hedge transaction. The Company formally assesses, both at the inception and at least quarterly thereafter,

whether the financial instruments used in hedging transactions are highly effective at offsetting changes in cash flows of the

related underlying exposures.

The table below presents the fair value of the Company’s interest rate swap contracts, as well as their classification on the

Consolidated Balance Sheets, as of December 31, 2024 and 2023 (in millions). See Note 4 for further information.


	Balance Sheet Classification	2024	2023
Derivatives designated as cash flow hedges:
Swap contracts	Prepaid expenses and other current assets	$9.7	$23.5
Swap contracts	Other assets	$10.0	$—
Swap contracts	Other current liabilities	$3.9	$—
Swap contracts	Other noncurrent liabilities	$6.0	$55.8

As of December 31, 2024, the estimated net amount of the existing gains related to the Company's interest rate swap contracts

that are expected to be reclassified into earnings within the next 12 months is approximately $6.0 million.

Net Investment Hedges

The Company enters into cross-currency interest rate swaps that are designated as net investment hedges of our investments in

foreign-denominated operations. Such contracts effectively convert the U.S. dollar equivalent notional amounts to obligations

denominated in the respective foreign currency and partially offset the impact of changes in currency rates on such foreign-

denominated net investments. These contracts also create a positive interest differential on the U.S. dollar-denominated portion

of the swaps, resulting in interest rate savings on the USD notional.

At December 31, 2024, the Company had the following cross-currency interest rate swaps designated as net investment hedges

of our investments in foreign-denominated operations:


	U.S. dollar equivalent notional (in millions)	Fixed Rates	Maturity Date
Euro (EUR)	$500	2.15%	5/26/2026
Canadian Dollar (CAD)	$800	1.14%	5/20/2026
British Pound (GBP)	$750	0.317%	5/8/2028

Hedge effectiveness is tested based on changes in the fair value of the cross-currency swaps due to changes in the USD/foreign

currency spot rates. The Company anticipates perfect effectiveness of the designated hedging relationships and records changes

in the fair value of the cross-currency interest rate swaps associated with changes in the spot rate through accumulated other

comprehensive loss. Excluded components associated with the forward differential are recognized directly in earnings as

interest expense, net. The Company recognized a benefit of $13.9 million and $9.0 million in interest expense, net for the years

ended December 31, 2024 and 2023, respectively, related to these excluded components. Upon settlement, cash flows

attributable to derivatives designated as net investment hedges are classified as investing activities in the Consolidated

Statements of Cash Flows.

The following table presents the fair value of the Company’s cross-currency interest rate swaps designated as net investment

hedges, as well as their classification on the accompanying Consolidated Balance Sheets, as of December 31, 2024 and

December 31, 2023 (in millions).


		2024	2023
	Balance Sheet Classification	Fair Value
Cross-currency interest rate swaps designated as net investment hedges:
Net investment hedge	Prepaid expenses and other current assets	$22.6	$—
Net investment hedge	Other assets	$8.0	$—
Net investment hedge	Other current liabilities	$—	$14.5
Net investment hedge	Other noncurrent liabilities	$5.2	$—

As of December 31, 2024, the estimated net amount of the existing gains related to the Company's cross-currency interest rate

swaps designed as net investment hedges that are expected to be reclassified into earnings within the next 12 months is

approximately $22.6 million.