Accumulated Other Comprehensive Loss

12 Months Ended

Dec. 31, 2022

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



	Year Ended December 31, 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)		(444)		(60)		(515)
Amounts reclassified from accumulated other comprehensive loss	15		56		—		71
Net current-period other comprehensive income (loss)	4		(388)		(60)		(444)
Balance at December 31, 2022	$	(103)	$	(1,064)	$	(22)	$	(1,189)



	Year Ended December 31, 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	6		(422)		50		(366)
Amounts reclassified from accumulated other comprehensive loss	8		—		—		8
Net current-period other comprehensive income (loss)	14		(422)		50		(358)


Balance at December 31, 2021	$	(107)	$	(676)	$	38	$	(745)

Cash Flow Hedges

The Company maintains forward exchange contracts, designated as cash flow hedges, to hedge foreign currency exposure (see Note 9) to the Indian Rupee. The notional amount of these derivatives was $346 million and $341 million at December 31, 2022 and 2021, respectively. Based on the amounts recorded in accumulated other comprehensive loss at December 31, 2022,

the Company estimates that it will recognize losses of approximately $7 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 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 $130 million and $145 million at December 31, 2022 and 2021, respectively. Based on the amounts recorded in accumulated other comprehensive loss at December 31, 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 uses its fixed-to-fixed cross-currency rate swap contracts and foreign currency-denominated debt as economic hedges of its net investments in such foreign currency-denominated subsidiaries. At December 31, 2022, aggregate notional cross-currency rate swaps of 400 million Euro 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 December 31, 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	%
October 6, 2022	June 1, 2025	80	million	1.922	%	3.85	%
October 27, 2022	July 1, 2026	80	million	1.458	%	3.20	%
November 10, 2022	June 1, 2025	80	million	1.816	%	3.85	%

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.

Foreign currency transaction gains (losses) related to net investment hedges that were recorded in other comprehensive loss in the consolidated statements of comprehensive income were as follows at December 31:




(In millions)	2022		2021		2020
Cross-currency rate swap contracts	$	(17)	$	—	$	—
Foreign currency-denominated debt	236		110		(151)

The Company recorded income tax impacts of $(73) million and $36 million for the years ended December 31, 2022 and 2021, respectively, in other comprehensive income (loss) from the translation of foreign currency-denominated senior notes, commercial paper notes and cross-currency rate swap contracts. During the year ended December 31, 2021, the Company recorded a prior period adjustment which resulted in an increase to retained earnings of $71 million to reclassify prior year deferred tax benefits on such foreign currency translation losses from accumulated other comprehensive loss that were not previously recorded in other comprehensive income (loss). Management believes this prior period adjustment was not material to the consolidated financial statements.