Accumulated Other Comprehensive Loss

9 Months Ended

Sep. 30, 2021

Changes in accumulated other comprehensive loss by component, net of income taxes, consisted of the following:



	Three Months Ended September 30, 2021
(In millions)	Cash Flow Hedges		Foreign Currency Translation		Pension Plans		Total
Balance at June 30, 2021	$	(116)	$	(196)	$	(11)	$	(323)
Other comprehensive income (loss) before reclassifications	3		(331)		—		(328)
Amounts reclassified from accumulated other comprehensive loss	2		—		—		2
Net current-period other comprehensive income (loss)	5		(331)		—		(326)
Balance at September 30, 2021	$	(111)	$	(527)	$	(11)	$	(649)



	Three Months Ended September 30, 2020
(In millions)	Cash Flow Hedges		Foreign Currency Translation		Pension Plans		Total
Balance at June 30, 2020	$	(138)	$	(500)	$	(6)	$	(644)
Other comprehensive income (loss) before reclassifications	6		(197)		—		(191)
Amounts reclassified from accumulated other comprehensive loss	4		—		—		4
Net current-period other comprehensive income (loss)	10		(197)		—		(187)



Balance at September 30, 2020	$	(128)	$	(697)	$	(6)	$	(831)



	Nine Months Ended September 30, 2021
(In millions)	Cash Flow Hedges		Foreign Currency Translation		Pension Plans		Total
Balance at December 31, 2020	$	(121)	$	(254)	$	(12)	$	(387)
Other comprehensive income (loss) before reclassifications	4		(273)		1		(268)
Amounts reclassified from accumulated other comprehensive loss	6		—		—		6
Net current-period other comprehensive income (loss)	10		(273)		1		(262)
Balance at September 30, 2021	$	(111)	$	(527)	$	(11)	$	(649)




	Nine Months Ended September 30, 2020
(In millions)	Cash Flow Hedges		Foreign Currency Translation		Pension Plans		Total
Balance at December 31, 2019	$	(141)	$	(33)	$	(6)	$	(180)


Other comprehensive income (loss) before reclassifications	1		(664)		—		(663)
Amounts reclassified from accumulated other comprehensive loss	12		—		—		12
Net current-period other comprehensive income (loss)	13		(664)		—		(651)

Balance at September 30, 2020	$	(128)	$	(697)	$	(6)	$	(831)

The Company has entered into forward exchange contracts, which have been designated as cash flow hedges, to hedge foreign currency exposure to the Indian Rupee. The notional amount of these derivatives was $280 million and $259 million, and the fair value totaling $6 million and $9 million is reported primarily within prepaid expenses and other current assets in the consolidated balance sheets at September 30, 2021 and December 31, 2020, respectively. Based on the amounts recorded in accumulated other comprehensive loss at September 30, 2021, the Company estimates that it will recognize gains of approximately $5 million in cost of processing and services during the next twelve months as foreign exchange forward contracts settle.

The Company had previously entered into treasury lock agreements (“Treasury Locks”), designated as cash flow hedges, in the aggregate notional amount of $5.0 billion to manage exposure to fluctuations in benchmark interest rates in anticipation of the issuance of fixed rate debt in connection with the acquisition and refinancing of certain indebtedness of First Data and its subsidiaries. In June 2019, concurrent with the issuance of U.S dollar-denominated senior notes, the Treasury Locks were settled resulting in a payment of $183 million recorded in accumulated other comprehensive loss, net of income taxes, that will be amortized to earnings over the terms of the originally forecasted interest payments. Based on the amounts recorded in accumulated other comprehensive loss at September 30, 2021, the Company estimates that it will recognize approximately $20 million in interest expense, net during the next twelve months related to settled interest rate hedge contracts.

To reduce exposure to changes in the value of the Company’s net investments in certain of its foreign currency-denominated subsidiaries due to changes in foreign currency exchange rates, the Company uses its foreign currency-denominated debt as an economic hedge of its net investments in such foreign currency-denominated subsidiaries. The Company has designated its Euro- and British Pound-denominated senior notes as net investment hedges to hedge a portion of its net investment in certain subsidiaries whose functional currencies are the Euro and the British Pound. Accordingly, foreign currency transaction gains or losses on the qualifying net investment hedge instruments are recorded as foreign currency translation within other comprehensive income (loss) in the consolidated statements of comprehensive income and will remain in accumulated other comprehensive loss in the consolidated balance sheets until the sale or complete liquidation of the underlying foreign subsidiaries. The Company recorded a foreign currency translation gain (loss), net of tax, of $71 million and $(92) million in other comprehensive income (loss) during the three months ended September 30, 2021 and 2020, respectively, and $77 million and $(38) million for the nine months ended September 30, 2021 and 2020, respectively, from the Euro- and British Pound-denominated senior notes.