Accumulated Other Comprehensive Loss

9 Months Ended

Sep. 30, 2022

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



	Three Months Ended September 30, 2022
(In millions)	Cash Flow Hedges		Foreign Currency Translation		Pension Plans		Total
Balance at June 30, 2022	$	(107)	$	(933)	$	35	$	(1,005)
Other comprehensive income (loss) before reclassifications	(4)		(591)		1		(594)
Amounts reclassified from accumulated other comprehensive loss	4		56		—		60
Net current-period other comprehensive loss	—		(535)		1		(534)
Balance at September 30, 2022	$	(107)	$	(1,468)	$	36	$	(1,539)



	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)



	Nine Months Ended September 30, 2022
(In millions)	Cash Flow Hedges		Foreign Currency Translation		Pension Plans		Total
Balance at December 31, 2021	$	(107)	$	(676)	$	38	$	(745)
Other comprehensive loss before reclassifications	(11)		(848)		(2)		(861)
Amounts reclassified from accumulated other comprehensive loss	11		56		—		67
Net current-period other comprehensive loss	—		(792)		(2)		(794)
Balance at September 30, 2022	$	(107)	$	(1,468)	$	36	$	(1,539)



	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)

Cash Flow Hedges

The Company maintains forward exchange contracts, designated as cash flow hedges, to hedge foreign currency exposure to the Indian Rupee (see Note 7). The notional amount of these derivatives was $353 million and $341 million at September 30, 2022 and December 31, 2021, respectively. Based on the amounts recorded in accumulated other comprehensive loss at September 30, 2022, the Company estimates that it will recognize losses of approximately $9 million in cost of processing and services during the next twelve months as foreign exchange forward contracts settle.

The Company previously entered into treasury lock agreements (“Treasury Locks”), designated as cash flow hedges, 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 Corporation (“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 loss, net of income taxes, and recorded in accumulated other comprehensive loss that is being amortized to earnings over the terms of the originally forecasted interest payments. The unamortized balance recorded in accumulated other comprehensive loss related to the Treasury Locks was $134 million and $145 million at September 30, 2022 and December 31, 2021, respectively. Based on the amounts recorded in accumulated other comprehensive loss at September 30, 2022, the Company estimates that it will recognize approximately $15 million in net interest expense during the next twelve months related to settled interest rate hedge contracts.

Net Investment Hedges

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 has entered into fixed-to-fixed cross-currency rate swap contracts and also uses its foreign currency-denominated debt as economic hedges of its net investments in such foreign currency-denominated subsidiaries. At September 30, 2022, aggregate notional cross-currency rate swaps of €160 million were designated as net investment hedges to hedge a portion of the Company’s net investment in certain subsidiaries whose functional currency is the Euro. The Company has designated its Euro- and British Pound-denominated senior notes and Euro commercial paper 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.

The following table outlines the terms of the Company’s cross-currency rate swap contracts at September 30, 2022:


Effective Date of Contract	Maturity Date of Contract	Notional Amount (EUR)		Fixed Rate Paid (EUR)		Fixed Rate Received (USD)
September 1, 2022	June 1, 2025	80	million	2.096	%	3.85	%
September 15, 2022	July 1, 2026	80	million	1.635	%	3.20	%

Foreign currency transaction gains or losses on the qualifying net investment hedge instruments are recorded as foreign currency translation within other comprehensive loss in the consolidated statements of comprehensive income (loss) and will remain in accumulated other comprehensive loss in the consolidated balance sheets until the sale or complete liquidation of the underlying foreign subsidiaries.

Foreign currency transaction gains related to net investment hedges that were recorded in other comprehensive loss in the consolidated statements of comprehensive income (loss) were as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2022		2021		2022		2021
Cross-currency rate swap contracts	$	2	$	—	$	2	$	—
Foreign currency-denominated debt	265		71		513		77

The Company recorded income tax impacts of $89 million and $172 million, during the three and nine months ended September 30, 2022, respectively, in other comprehensive loss from the translation of foreign currency-denominated senior notes, commercial paper notes and cross-currency rate swap contracts.