Fair Value Measurements

6 Months Ended

Jun. 30, 2018

Fair value, as defined by the relevant accounting standards, represents the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. For additional information on how the Company measures fair value, refer to the Company's consolidated financial statements within the Company's Annual Report on Form 10-K for the year ended December 31, 2017.

The following tables reflect assets and liabilities that were measured at fair value on a recurring basis (in millions):



	Fair Value Measurement Using						Assets/ Liabilities at Fair Value
June 30, 2018	Level 1		Level 2		Level 3		Assets/ Liabilities at Fair Value
Assets:
Settlement assets:
Measured at fair value through net income:
Money market funds	$	41.1	$	—	$	—	$	41.1
Measured at fair value through other comprehensive income:
State and municipal debt securities	$	—	$	962.2	$	—	$	962.2
State and municipal variable rate demand notes	—		205.5		—		205.5
Corporate and other debt securities	—		78.0		—		78.0
United States Treasury securities	9.6		—		—		9.6
Other assets:
Derivatives	—		262.3		—		262.3
Total assets	$	50.7	$	1,508.0	$	—	$	1,558.7
Liabilities:
Derivatives	$	—	$	204.0	$	—	$	204.0
Total liabilities	$	—	$	204.0	$	—	$	204.0

	Fair Value Measurement Using						Assets/ Liabilities at Fair Value
December 31, 2017	Level 1		Level 2		Level 3		Assets/ Liabilities at Fair Value
Assets:
Settlement assets:
Measured at fair value through other comprehensive income:
State and municipal debt securities	$	—	$	960.0	$	—	$	960.0
State and municipal variable rate demand notes	—		319.6		—		319.6
Corporate and other debt securities	—		60.8		—		60.8
United States Treasury securities	9.8		—		—		9.8
Other assets:
Derivatives	—		273.4		—		273.4
Total assets	$	9.8	$	1,613.8	$	—	$	1,623.6
Liabilities:
Derivatives	$	—	$	263.0	$	—	$	263.0
Total liabilities	$	—	$	263.0	$	—	$	263.0

No non-recurring fair value adjustments were recorded during the three and six months ended June 30, 2018 and 2017.

Other Fair Value Measurements

The carrying amounts for many of the Company's financial instruments, including certain cash and cash equivalents, settlement cash and cash equivalents, and settlement receivables and settlement obligations approximate fair value due to their short maturities. The Company's borrowings are classified as Level 2 of the valuation hierarchy, and the aggregate fair value of these borrowings was based on quotes from multiple banks and excluded the impact of related interest rate swaps. Fixed rate notes are carried in the Company's Condensed Consolidated Balance Sheets at their original issuance values as adjusted over time to accrete that value to par, except for portions of notes hedged by these interest rate swaps, as disclosed in Note 11. As of June 30, 2018, the carrying value and fair value of the Company's borrowings were $3,331.8 million and $3,363.3 million, respectively (see Note 12). As of December 31, 2017, the carrying value and fair value of the Company's borrowings were $3,033.6 million and $3,146.5 million, respectively.

The Company holds investments in foreign corporate debt securities that are classified as held-to-maturity securities within Level 2 of the valuation hierarchy and are recorded at amortized cost in "Other Assets" in the Company's Condensed Consolidated Balance Sheets. As of June 30, 2018, both the carrying value and fair value of the Company's foreign corporate debt securities were $43.5 million. As of December 31, 2017, both the carrying value and fair value of the Company's foreign corporate debt securities were $56.2 million.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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