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Financial Instruments Financial Instruments
 12 Months Ended
Dec. 31, 2016
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments and Hedging Activities Disclosure [Text Block]
Financial Instruments

As of December 31, 2016, we have entered into the following interest rate swap transaction converting a portion of the interest rate exposure on our Term and Revolving Loans from variable to fixed (in millions):
 
Effective date
 
Termination date
 
Notional amount
 
Bank pays
variable rate of
 
FIS pays
 fixed rate of
 
January 4, 2016
 
January 1, 2018
 
$
500

 
One Month LIBOR (1)
 
0.92
%
(2)
___________________________________
(1)
0.77% in effect as of December 31, 2016.
(2)
Does not include the applicable margin and facility fees paid to lenders on Term and Revolving Loans as described above.

We have designated this interest rate swap as a cash flow hedge and, as such, it is carried on the Consolidated Balance Sheets at fair value with changes in fair value included in other comprehensive earnings, net of tax.

Due to the Term and Revolving Loans reductions discussed in Note 10, interest rate swaps with a notional amount totaling $1,250 million were terminated as of December 31, 2016. As a result, FIS recognized an approximate $2 million before tax loss due to the release of fair value changes from other comprehensive earnings.

A summary of the fair value of the Company’s interest rate derivative instruments is as follows (in millions):
 
December 31, 2016
 
December 31, 2015
 
Balance sheet location
 
Fair
value
 
Balance sheet location
 
Fair
value
Interest rate swap contracts
Other noncurrent assets
 
$
—

 
Other noncurrent assets
 
$
1

Interest rate swap contracts
Accounts payable and accrued liabilities
 
—

 
Accounts payable and accrued liabilities
 
—

Interest rate swap contracts
Other long-term liabilities
 
—

 
Other long-term liabilities
 
1



In accordance with the authoritative guidance for fair value measurements, the inputs used to determine the estimated fair value of our interest rate swap are Level 2-type measurements. We considered our own credit risk and the credit risk of the counterparties when determining the fair value of our interest rate swap. Adjustments are made to these amounts and to accumulated other comprehensive earnings ("AOCE") within the Consolidated Statements of Comprehensive Earnings and Consolidated Statements of Equity as the factors that impact fair value change, including current and projected interest rates, time to maturity and required cash transfers/settlements with our counterparties. Periodic actual and estimated settlements with counterparties are recorded to interest expense as a yield adjustment to effectively fix the otherwise variable rate interest expense associated with the Term and Revolving Loans for hedge notional amounts.

A summary of the effect of derivative instruments on the Consolidated Statements of Comprehensive Earnings and recognized in AOCE for the years ended December 31, 2016, 2015 and 2014 are as follows (in millions):

 
 
Amount of gain (loss) recognized
in AOCE on derivatives
Derivatives in cash flow hedging relationships
 
2016
 
2015
 
2014
Interest rate derivative contracts
 
$
(7
)
 
$
(17
)
 
$
(4
)

 
 
Amount of gain (loss) reclassified
from AOCE into income
Location of gain (loss) reclassified from AOCE into income
 
2016
 
2015
 
2014
Interest expense
 
$
(9
)
 
$
(4
)
 
$
(6
)


Approximately $1 million of the balance in AOCE as of December 31, 2016, is expected to be reclassified into income over the next twelve months.

Our existing cash flow hedge is highly effective and there was no impact on earnings due to hedge ineffectiveness. It is our practice to execute such instruments with credit-worthy banks at the time of execution and not to enter into derivative financial instruments for speculative purposes. As of December 31, 2016, we believe that our interest rate swap counterparty will be able to fulfill their obligations under our agreement and we believe we will have debt outstanding through the various expiration date of the swap such that the forecasted transactions remain probable of occurring.