Derivatives (Tables)

9 Months Ended

Sep. 30, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Notional amounts of foreign currency forward contracts -- Consumer-to-Consumer

The aggregate equivalent United States dollar notional amounts of foreign currency forward contracts as of September 30, 2014 were as follows (in millions):

Contracts designated as hedges:
Euro	$	397.7
Canadian dollar	118.4
British pound	78.9
Australian dollar	53.4
Swiss franc	44.6
Other	88.8
Contracts not designated as hedges:
Euro	$	301.6
Canadian dollar	61.4
British pound	60.5
Australian dollar	29.3
Other (a)	162.8

____________________

(a) Comprised of exposures to 16 different currencies. None of these individual currency exposures is greater than $20 million.

Fair value of derivatives

The following table summarizes the fair value of derivatives reported in the Condensed Consolidated Balance Sheets as of September 30, 2014 and December 31, 2013 (in millions):

	Derivative Assets					Derivative Liabilities
		Fair Value					Fair Value
	Balance Sheet Location	September 30, 2014		December 31, 2013		Balance Sheet Location	September 30, 2014		December 31, 2013
Derivatives — hedges:
Interest rate fair value hedges — Corporate	Other assets	$	2.8	$	11.4	Other liabilities	$	5.9	$	7.8
Foreign currency cash flow hedges — Consumer-to-Consumer	Other assets	41.3		11.1		Other liabilities	4.0		27.7
Total		$	44.1	$	22.5		$	9.9	$	35.5
Derivatives — undesignated:
Foreign currency — Business Solutions	Other assets	$	284.0	$	201.2	Other liabilities	$	248.9	$	186.2
Foreign currency — Consumer-to-Consumer	Other assets	5.6		0.6		Other liabilities	1.7		1.7
Total		$	289.6	$	201.8		$	250.6	$	187.9
Total derivatives		$	333.7	$	224.3		$	260.5	$	223.4

Gross and net fair value of derivative assets and liabilities

The following tables summarize the gross and net fair value of derivative assets and liabilities as of September 30, 2014 and December 31, 2013 (in millions):

Offsetting of Derivative Assets

September 30, 2014	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Condensed Consolidated Balance Sheets		Net Amounts Presented in the Condensed Consolidated Balance Sheets		Derivatives Not Offset in the Condensed Consolidated Balance Sheets			Net Amounts
Derivatives subject to a master netting arrangement or similar agreement	$	182.3	$	—	$	182.3	$	(105.2	)	$	77.1
Derivatives that are not or may not be subject to master netting arrangement or similar agreement	151.4
Total	$	333.7
December 31, 2013
Derivatives subject to a master netting arrangement or similar agreement	$	118.4	$	—	$	118.4	$	(93.3	)	$	25.1
Derivatives that are not or may not be subject to master netting arrangement or similar agreement	105.9
Total	$	224.3

Offsetting of Derivative Liabilities

September 30, 2014	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Condensed Consolidated Balance Sheets		Net Amounts Presented in the Condensed Consolidated Balance Sheets		Derivatives Not Offset in the Condensed Consolidated Balance Sheets			Net Amounts
Derivatives subject to a master netting arrangement or similar agreement	$	134.3	$	—	$	134.3	$	(105.2	)	$	29.1
Derivatives that are not or may not be subject to master netting arrangement or similar agreement	126.2
Total	$	260.5
December 31, 2013
Derivatives subject to a master netting arrangement or similar agreement	$	146.1	$	—	$	146.1	$	(93.3	)	$	52.8
Derivatives that are not or may not be subject to master netting arrangement or similar agreement	77.3
Total	$	223.4

Location and amount of gains/(losses) from hedging activities

Fair Value Hedges

The following table presents the location and amount of gains/(losses) from fair value hedges for the three months ended September 30, 2014 and 2013 (in millions):

	Gain/(Loss) Recognized in Income on Derivatives							Gain/(Loss) Recognized in Income on Related Hedged Item (a)						Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)
	Income Statement Location	Amount						Income Statement Location	Amount					Income Statement Location	Amount
Derivatives		September 30, 2014			September 30, 2013		Hedged  Item		September 30, 2014		September 30, 2013				September 30, 2014			September 30, 2013
Interest rate contracts	Interest  expense	$	(2.6	)	$	3.1	Fixed-rate debt	Interest expense	$	5.6	$	(0.6	)	Interest  expense	$	(0.1	)	$	—
Total gain/ (loss)		$	(2.6	)	$	3.1			$	5.6	$	(0.6	)		$	(0.1	)	$	—

The following table presents the location and amount of gains/(losses) from fair value hedges for the nine months ended September 30, 2014 and 2013 (in millions):

	Gain/(Loss) Recognized in Income on Derivatives							Gain/(Loss) Recognized in Income on Related Hedged Item (a)					Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)
	Income Statement Location	Amount						Income Statement Location	Amount				Income Statement Location	Amount
Derivatives		September 30, 2014		September 30, 2013			Hedged  Item		September 30, 2014		September 30, 2013			September 30, 2014			September 30, 2013
Interest rate contracts	Interest  expense	$	8.2	$	(5.0	)	Fixed-rate debt	Interest expense	$	1.1	$	12.9	Interest  expense	$	(0.4	)	$	—
Total gain/ (loss)		$	8.2	$	(5.0	)			$	1.1	$	12.9		$	(0.4	)	$	—

Cash Flow Hedges

The following table presents the location and amount of gains/(losses) from cash flow hedges for the three months ended September 30, 2014 and 2013 (in millions):

	Gain/(Loss) Recognized in OCI on Derivatives (Effective Portion)					Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion)							Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) (b)
	Amount					Income Statement Location	Amount						Income Statement Location	Amount
Derivatives	September 30, 2014		September 30, 2013				September 30, 2014			September 30, 2013				September 30, 2014			September 30, 2013
Foreign currency contracts	$	50.9	$	(27.0	)	Revenue	$	(3.1	)	$	4.2		Derivative gains/(losses), net	$	(1.8	)	$	0.3
Interest rate contracts (c)	—		—			Interest expense	(0.9		)	(0.9		)	Interest  expense	—			—
Total gain/(loss)	$	50.9	$	(27.0	)		$	(4.0	)	$	3.3			$	(1.8	)	$	0.3

The following table presents the location and amount of gains/(losses) from cash flow hedges for the nine months ended September 30, 2014 and 2013 (in millions):

	Gain/(Loss) Recognized in OCI on Derivatives (Effective Portion)				Gain/(Loss) Reclassified from Accumulated OCI into Income (Effective Portion)							Gain/(Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) (b)
	Amount				Income Statement Location	Amount						Income Statement Location	Amount
Derivatives	September 30, 2014		September 30, 2013			September 30, 2014			September 30, 2013				September 30, 2014			September 30, 2013
Foreign currency contracts	$	49.5	$	1.2	Revenue	$	(7.1	)	$	10.4		Derivative gains/(losses), net	$	(3.4	)	$	—
Interest rate contracts (c)	—		—		Interest expense	(2.7		)	(2.7		)	Interest  expense	—			—
Total gain/(loss)	$	49.5	$	1.2		$	(9.8	)	$	7.7			$	(3.4	)	$	—

Undesignated Hedges

The following table presents the location and amount of net gains/(losses) from undesignated hedges for the three and nine months ended September 30, 2014 and 2013 (in millions):

	Gain/(Loss) Recognized in Income on Derivatives (d)
	Income Statement Location	Amount
		Three Months Ended September 30,					Nine Months Ended September 30,
Derivatives		2014		2013			2014		2013
Foreign currency contracts (e)	Selling, general and administrative	$	28.1	$	(15.3	)	$	27.3	$	(1.9	)
Foreign currency contracts (f)	Derivative gains/(losses), net	2.3		(1.2		)	1.3		(0.6		)
Total gain/(loss)		$	30.4	$	(16.5	)	$	28.6	$	(2.5	)

 ____________________

(a) The gain/(loss) of $5.6 million and $(0.6) million in the three months ended September 30, 2014 and 2013, respectively, was comprised of a gain/(loss) in value on the debt of $2.7 million and $(3.1) million, respectively, and amortization of hedge accounting adjustments of $2.9 million and $2.5 million, respectively. The gain of $1.1 million and $12.9 million in the nine months ended September 30, 2014 and 2013, respectively, was comprised of a gain/(loss) in value on the debt of $(7.8) million and $5.0 million, respectively, and amortization of hedge accounting adjustments of $8.9 million and $7.9 million, respectively.

(b) The portion of the change in fair value of a derivative excluded from the effectiveness assessment for foreign currency forward contracts designated as cash flow hedges represents the difference between changes in forward rates and spot rates.

(c) The Company uses derivatives to hedge the forecasted issuance of fixed-rate debt and records the effective portion of the derivative's fair value in "Accumulated other comprehensive loss" in the Condensed Consolidated Balance Sheets. These amounts are reclassified to "Interest expense" in the Condensed Consolidated Statements of Income over the life of the related notes.

(d) 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.

(e) 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 and cash balances, not including amounts related to derivatives activity as displayed above and included in "Selling, general and administrative" in the Condensed Consolidated Statements of Income, were $(24.5) million and $9.7 million for the three months ended September 30, 2014 and 2013, respectively, and $(29.5) million and $(2.3) million for the nine months ended September 30, 2014 and 2013, respectively.

(f) The derivative contracts used in the Company's revenue hedging program are not designated as hedges in the final month of the contract.