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Derivatives (Tables)

12 Months Ended

Dec. 31, 2021

Derivatives

Notional Amounts of Foreign Currency Forward Contracts

The aggregate equivalent United States dollar notional amounts of foreign currency forward contracts as of December 31, 2021 and 2020 were as follows (in millions):

		December 31, 2021
Contracts designated as hedges:
Euro		$	399.9
Canadian dollar			134.0
Australian dollar			58.4
Swiss franc			45.9
British pound			43.8
Swedish krona			30.7
Japanese yen			30.4
Other(a)			0.9
Contracts not designated as hedges:
Euro		$	755.7
British pound			148.1
Canadian dollar			144.2
Australian dollar			98.1
Mexican peso			96.3
Philippine peso			76.2
Indian rupee			63.4
Japanese yen			46.0
Russian ruble			44.4
Chinese yuan			31.6
New Zealand dollar			26.6
Swiss franc			25.1
Swedish krona			25.1
Other(a)			132.7

		December 31, 2020
Contracts designated as hedges:
Euro		$	428.9
Canadian dollar			131.9
British pound			71.9
Australian dollar			58.3
Swiss franc			41.1
Japanese yen			36.6
Other(a)			29.5
Contracts not designated as hedges:
Euro		$	533.0
British pound			153.9
Mexican peso			105.0
Indian rupee			81.0
Canadian dollar			71.5
Australian dollar			68.1
Japanese yen			39.6
Philippine peso			35.2
Russian ruble			31.2
Indonesian rupiah			29.1
Swedish krona			26.0
Other(a)			151.5

(a)Comprised of exposures to various currencies; none of these individual currency exposures is greater than $25 million.

Fair Value of Derivatives

The following table summarizes the fair value of derivatives reported in the Company’s Consolidated Balance Sheets as of December 31, 2021 and 2020 (in millions):

		Derivative Assets										Derivative Liabilities
				Fair Value										Fair Value
		Balance Sheet		December 31,				December 31,				Balance Sheet		December 31,				December 31,
		Location		2021				2020				Location		2021				2020
Derivatives designated as hedges:
Foreign currency cash flow hedges		Other assets		$	30.6			$	9.1			Other liabilities		$	2.6			$	24.9
Interest rate cash flow hedges		Other assets			—				—			Other liabilities			—				0.1
Total derivatives designated as hedges				$	30.6			$	9.1					$	2.6			$	25.0
Derivatives not designated as hedges:
Business Solutions operations - foreign currency(a)		Other assets		$	213.1			$	441.4			Other liabilities		$	174.1			$	402.5
Foreign currency		Other assets			4.0				2.8			Other liabilities			7.1				2.8
Total derivatives not designated as hedges				$	217.1			$	444.2					$	181.2			$	405.3
Total derivatives				$	247.7			$	453.3					$	183.8			$	430.3

(a)In many circumstances, the Company allows its Business Solutions customers to settle part or all of their derivative contracts prior to maturity. However, the offsetting positions originally entered into with financial institution counterparties do not allow for similar settlement. To mitigate this, additional foreign currency contracts are entered into with financial institution counterparties to offset the original economic hedge contracts. This frequently results in changes in the Company’s derivative assets and liabilities that may not directly align with the performance in the underlying derivatives business.

Gross and Net Fair Value of Derivative Assets

The following tables summarize the gross and net fair value of derivative assets and liabilities as of December 31, 2021 and 2020 (in millions):

Offsetting of Derivative Assets

		Gross				Gross				Net Amounts				Derivatives
		Amounts of				Amounts Offset				Presented				Not Offset
		Recognized				in the Consolidated				in the Consolidated				in the Consolidated				Net
December 31, 2021		Assets				Balance Sheets				Balance Sheets				Balance Sheets				Amounts
Derivatives subject to a master netting arrangement or similar agreement		$	163.9			$	—			$	163.9			$	(92.4	)		$	71.5
Derivatives that are not or may not be subject to master netting arrangement or similar agreement			83.8
Total		$	247.7
December 31, 2020
Derivatives subject to a master netting arrangement or similar agreement		$	165.1			$	—			$	165.1			$	(155.1	)		$	10.0
Derivatives that are not or may not be subject to master netting arrangement or similar agreement			288.2
Total		$	453.3

Gross and Net Fair Value of Derivative Liabilities

Offsetting of Derivative Liabilities

		Gross				Gross				Net Amounts				Derivatives
		Amounts of				Amounts Offset				Presented				Not Offset
		Recognized				in the Consolidated				in the Consolidated				in the Consolidated				Net
December 31, 2021		Liabilities				Balance Sheets				Balance Sheets				Balance Sheets				Amounts
Derivatives subject to a master netting arrangement or similar agreement		$	109.6			$	—			$	109.6			$	(92.4	)		$	17.2
Derivatives that are not or may not be subject to master netting arrangement or similar agreement			74.2
Total		$	183.8
December 31, 2020
Derivatives subject to a master netting arrangement or similar agreement		$	356.2			$	—			$	356.2			$	(155.1	)		$	201.1
Derivatives that are not or may not be subject to master netting arrangement or similar agreement			74.1
Total		$	430.3

Schedule of Amount and Location of Gains/(Losses) from Hedging Activities

The following table presents the pre-tax amount of unrealized gains/(losses) recognized in other comprehensive income from cash flow hedges for the years ended December 31, 2021, 2020, and 2019 (in millions):

		Year Ended December 31,
		2021				2020				2019
Foreign currency derivatives(a)		$	39.5			$	(26.3	)		$	2.0
Interest rate derivatives			3.4				(0.1	)			—

(a)For the years ended December 31, 2021, 2020, and 2019, gains/(losses) of ($2.4) million, $0.3 million, and $1.5 million, respectively, represent amounts excluded from the assessment of effectiveness and recognized in other comprehensive income, for which an amortization approach is applied.

The following table presents the location and amounts of pre-tax net gains/(losses) from fair value and cash flow hedging relationships recognized in the Consolidated Statements of Income for the years ended December 31, 2021, 2020, and 2019 (in millions):

		Year Ended December 31,
		2021												2020								2019
						Interest				Other Income/								Interest								Interest
		Revenues				Expense				(Expense), net				Revenues				Expense				Revenues				Expense
Total amounts presented in the Consolidated Statements of Income in which the effects of cash flow hedges are recorded		$	5,070.8			$	(105.5	)		$	(21.7	)		$	4,835.0			$	(118.5	)		$	5,292.1			$	(152.0	)
Gain/(loss) on fair value hedges:
Interest rate derivatives:
Hedged items			—				—				—				—				—				—				(0.1	)
Derivatives designated as hedging instruments			—				—				—				—				—				—				1.0
Gain/(loss) on cash flow hedges:
Foreign currency derivatives:
Gains/(losses) reclassified from AOCL into earnings			(7.6	)			—				—				1.2				—				14.2				—
Amount excluded from effectiveness testing recognized in earnings based on an amortization approach			6.1				—				—				10.4				—				11.5				—
Amount excluded from effectiveness testing recognized in earnings based on changes in fair value			—				—				—				—				—				2.9				—
Interest rate derivatives:
Gains/(losses) reclassified from AOCL into earnings			—				(0.6	)			0.7				—				(0.6	)			—				—

Undesignated Hedges

The following table presents the location and amount of pre-tax net gains/(losses) from undesignated hedges in the Consolidated Statements of Income on derivatives for the years ended December 31, 2021, 2020, and 2019 (in millions):

				Year Ended December 31,
Derivatives(a)		Location		2021				2020				2019
Foreign currency derivatives(b)		Selling, general, and administrative		$	52.0			$	15.9			$	23.9
Foreign currency derivatives		Revenues			—				—				0.3
Total gain				$	52.0			$	15.9			$	24.2

(a)The Company uses foreign currency forward and option contracts as part of its Business Solutions payments operations. These derivative contracts are excluded from this table as they are managed as part of a broader currency portfolio that includes non-derivative currency exposures. The gains and losses on these derivatives are included as part of the broader disclosure of portfolio revenue for this business discussed above.

(b)The Company uses foreign currency forward contracts to offset foreign exchange rate fluctuations on settlement assets and obligations, as well as certain foreign currency denominated positions. Foreign exchange gains/(losses) on settlement assets and obligations, cash balances, and other assets and liabilities, not including amounts related to derivative activity as displayed above, and included in Selling, general, and administrative in the Consolidated Statements of Income, were $(56.1) million, $(37.0) million, and $(33.1) million for the years ended December 31, 2021, 2020, and 2019, respectively.

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