XML 41 R30.htm IDEA: XBRL DOCUMENT

Derivatives (Tables)

3 Months Ended

Mar. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Notional Amounts of Foreign Currency Forward Contracts

The aggregate equivalent United States dollar notional amounts of foreign currency forward contracts as of March 31, 2023 and December 31, 2022 were as follows (in millions):


	March 31, 2023
Contracts designated as hedges:
Euro	$	288.1
Canadian dollar		111.2
Australian dollar		52.1
British pound		45.3
Swiss franc		39.4
Swedish krona		25.0
Other (a)		20.6
Contracts not designated as hedges:
Euro	$	597.1
Mexican peso		147.1
British pound		135.8
Indian rupee		47.8
Australian dollar		46.4
Canadian dollar		40.9
Brazilian real		30.4
Singapore dollar		26.0
Philippine peso		25.2
Other (a)		193.4


	December 31, 2022
Contracts designated as hedges:
Euro	$	321.6
Canadian dollar		117.3
Australian dollar		53.2
Swiss franc		40.4
British pound		40.4
Swedish krona		25.8
Other (a)		22.1
Contracts not designated as hedges:
Euro	$	603.2
Mexican peso		132.9
British pound		115.1
Indian rupee		52.6
Australian dollar		48.7
Canadian dollar		32.2
Japanese yen		30.5
Chinese yuan		30.1
Swiss franc		28.3
Swedish krona		26.7
Philippine peso		26.2
Other (a)		137.0

(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 Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022 (in millions):


	Derivative Assets					Derivative Liabilities
		Fair Value					Fair Value
	Balance Sheet	March 31,		December 31,		Balance Sheet	March 31,		December 31,
	Location	2023		2022		Location	2023		2022
Derivatives designated as hedges:
Foreign currency cash flow hedges	Other assets	$	26.7	$	35.2	Other liabilities	$	6.2	$	4.7
Total derivatives designated as hedges		$	26.7	$	35.2		$	6.2	$	4.7
Derivatives not designated as hedges:
Business Solutions operations - foreign currency (a)	Assets held for sale	$	72.0	$	88.6	Liabilities associated with assets held for sale	$	71.8	$	89.5
Foreign currency	Other assets		3.5		2.3	Other liabilities		6.0		4.7
Total derivatives not designated as hedges		$	75.5	$	90.9		$	77.8	$	94.2
Total derivatives		$	102.2	$	126.1		$	84.0	$	98.9

(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 entered into with Convera do not allow for similar settlement. To mitigate this, additional foreign currency contracts are entered into with Convera 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 March 31, 2023 and December 31, 2022 (in millions):

Offsetting of Derivative Assets


			Gross		Net Amounts		Derivatives
	Gross		Amounts Offset in		Presented in		Not Offset in
	Amounts of		the Condensed		the Condensed		the Condensed
	Recognized		Consolidated		Consolidated		Consolidated			Net
March 31, 2023	Assets		Balance Sheets		Balance Sheets		Balance Sheets			Amounts
Derivatives subject to a master netting arrangement or similar agreement	$	42.5	$	—	$	42.5	$	(22.7	)	$	19.8
Derivatives that are not or may not be subject to master netting arrangement or similar agreement		59.7
Total	$	102.2

December 31, 2022
Derivatives subject to a master netting arrangement or similar agreement	$	55.8	$	—	$	55.8	$	(26.3	)	$	29.5
Derivatives that are not or may not be subject to master netting arrangement or similar agreement		70.3
Total	$	126.1

Gross and Net Fair Value of Derivative Liabilities

Offsetting of Derivative Liabilities


			Gross		Net Amounts		Derivatives
	Gross		Amounts Offset in		Presented in		Not Offset in
	Amounts of		the Condensed		the Condensed		the Condensed
	Recognized		Consolidated		Consolidated		Consolidated			Net
March 31, 2023	Liabilities		Balance Sheets		Balance Sheets		Balance Sheets			Amounts
Derivatives subject to a master netting arrangement or similar agreement	$	67.3	$	—	$	67.3	$	(22.7	)	$	44.6
Derivatives that are not or may not be subject to master netting arrangement or similar agreement		16.7
Total	$	84.0

December 31, 2022
Derivatives subject to a master netting arrangement or similar agreement	$	77.8	$	—	$	77.8	$	(26.3	)	$	51.5
Derivatives that are not or may not be subject to master netting arrangement or similar agreement		21.1
Total	$	98.9

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 three months ended March 31, 2023 and 2022 (in millions):


	Three Months Ended March 31,
	2023			2022
Foreign currency derivatives (a)	$	(2.2	)	$	6.2

(a)

Gains/(losses) of $1.8 million and $(4.2) million for the three months ended March 31, 2023 and 2022, 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 cash flow hedging relationships recognized in the Condensed Consolidated Statements of Income for the three months ended March 31, 2023 and 2022 (in millions):


	Three Months Ended March 31,
	2023					2022
	Revenues		Interest Expense			Revenues		Interest Expense
Total amounts presented in the Condensed Consolidated Statements of Income in which the effects of cash flow hedges are recorded	$	1,036.9	$	(25.0	)	$	1,155.7	$	(24.8	)
Gain/(loss) on cash flow hedges:
Foreign currency derivatives:
Gains reclassified from AOCL into earnings		8.2		—			1.0		—
Amount excluded from effectiveness testing recognized in earnings based on an amortization approach		1.6		—			1.1		—
Interest rate derivatives:
Losses reclassified from AOCL into earnings		—		—			—		(0.1	)

Undesignated Hedges

The following table presents the location and amount of pre-tax net gains from undesignated hedges in the Condensed Consolidated Statements of Income on derivatives for the three months ended March 31, 2023 and 2022 (in millions):


		Three Months Ended
		March 31,
Derivatives (a)	Location	2023		2022
Foreign currency derivatives (b)	Selling, general, and administrative	$	4.7	$	11.7

(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 Condensed Consolidated Statements of Income, were $0.2 million and $(9.9) million for the three months ended March 31, 2023 and 2022, respectively.