First Data 2013 Annual Report Download - page 78

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Hedges of net investments in foreign operations. During 2013, the Company entered into cross-currency swaps with aggregate notional values of
100.0 million Australian dollars expiring in January 2018, 200.0 million euro expiring in January 2016, 100.0 million British pounds expiring in August 2016
and 75.0 million Canadian dollars expiring in August 2016 that were designated as hedges of net investments in foreign operations. As of December 31, 2013
and 2012, the company held a cross-currency swap with an aggregate notional value of 115.0 million Australian dollars that was designated as a hedge of a
net investment in a foreign operation. The swap expires in April 2014.
Cash flow hedges. As of December 31, 2013 and 2012, the Company did not have any interest rate swaps that were designated as cash flow hedges of
the variability in the interest payments on its debt. As of December 31, 2011, the Company held interest rate swaps which were designated as cash flow hedges
of the variability in the interest payments on $500 million of variable rate senior secured term loans which expired in September 2012 that ceased to be highly
effective in offsetting the variability in the interest payments, due in part to their approaching maturity dates, and were de-designated. Until the de-designation
date of these cash flow hedges, the Company followed the hypothetical derivative method to measure hedge ineffectiveness which resulted mostly from the
hedges being off-market at the time of designation, and any ineffectiveness was recognized immediately in the Consolidated Statements of Operations.
For information on the location and amounts of derivative fair values in the Consolidated Balance Sheets, derivative gains and losses in the
Consolidated Statements of Operations and accumulated derivative gains and losses in OCI, refer to the tables presented below.
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

  
 
Foreign exchange contracts $16.9 $(30.3)
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Interest rate contracts 47.2 (119.8)
Foreign exchange contracts — (2.9)
Total derivatives not designated as hedging instruments 47.2 (122.7)
Total derivatives $ 64.1 $ (153.0)
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 
 
Foreign exchange contract $ — $ (32.8)

Interest rate contracts 90.8 (137.7)
Foreign exchange contracts 10.1 (1.6)
Total derivatives not designated as hedging instruments 100.9 (139.3)
Total derivatives $100.9 $(172.1)
(a) Derivative assets are included in the “Other current assets” and “Other long-term assets” lines of the Consolidated Balance Sheets.
(b) Derivative liabilities are included in the “Other current liabilities” and “Other long-term liabilities” lines of the Consolidated Balance Sheets.
(c) The Company’s policy is to present all derivative balances on a gross basis, without regard to counterparty master netting agreements or similar
arrangements. Of the balances included in the table above, $64.1 million of assets and $124.7 million of liabilities, net $60.6 million, as of
December 31, 2013 and $100.9 million of assets and $126.0 million of liabilities, net $25.1 million, as of December 31, 2012 are subject to master
netting agreements with the counterparties. The terms of those agreements require that the Company net settle the outstanding positions at the option of
the counterparty upon certain events of default.
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