Western Union 2013 Annual Report Download - page 240

2013 FORM 10-K
THE WESTERN UNION COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
130
The Company, at times, utilizes derivatives to hedge the forecasted issuance of fixed-rate debt. These derivatives are designated
as cash flow hedges of the variability in the fixed-rate coupon of the debt expected to be issued. The effective portion of the change
in fair value of the derivatives is recorded in "Accumulated other comprehensive loss" in the Consolidated Balance Sheets.
The Company held interest rate swaps in an aggregate notional amount of $1,550.0 million and $800.0 million as of
December 31, 2013 and 2012, respectively. Of this aggregate notional amount held at December 31, 2013, $500.0 million related
to notes due in 2014, $250.0 million related to notes due in 2015, $500.0 million related to notes due in 2017, and $300.0 million
related to notes due in 2018.
Balance Sheet
The following table summarizes the fair value of derivatives reported in the Consolidated Balance Sheets as of December 31,
2013 and December 31, 2012 (in millions):
Derivative Assets Derivative Liabilities
Fair Value Fair Value
Balance Sheet
Location
December 31,
2013
December 31,
2012
Balance Sheet
Location
December 31,
2013
December 31,
2012
Derivatives — hedges:
Interest rate fair value
hedges — Corporate . . . . . . . . . . . Other assets $ 11.4 $ 13.1 Other liabilities $ 7.8 $ —
Foreign currency cash flow hedges
— Consumer-to-Consumer . . . . . . Other assets 11.1 10.8 Other liabilities 27.7 17.6
Total . . . . . . . . . . . . . . . . . . . . . . . . . . $ 22.5 $ 23.9 $ 35.5 $ 17.6
Derivatives — undesignated:
Foreign currency — Business
Solutions . . . . . . . . . . . . . . . . . . . . Other assets $ 201.2 $ 71.9 Other liabilities $ 186.2 $ 66.5
Foreign currency — Consumer-to-
Consumer. . . . . . . . . . . . . . . . . . . . Other assets 0.6 1.0 Other liabilities 1.7 2.0
Total . . . . . . . . . . . . . . . . . . . . . . . . . . $ 201.8 $ 72.9 $ 187.9 $ 68.5
Total derivatives . . . . . . . . . . . . . . . . . . $ 224.3 $ 96.8 $ 223.4 $ 86.1
The following table summarizes the net fair value of derivatives held as of December 31, 2013 and their expected maturities
(in millions):
Total 2014 2015 2016 2017 2018 Thereafter
Foreign currency cash flow hedges — Consumer-to-Consumer. . . . $ (16.6) $ (11.5) $ (5.1) $ — $ — $ — $ —
Foreign currency undesignated hedges — Consumer-to-Consumer .(1.1) (1.1) — — — — —
Foreign currency undesignated hedges — Business Solutions . . . . . 15.0 15.0 — — — — —
Interest rate fair value hedges — Corporate . . . . . . . . . . . . . . . . . . . 3.6 11.2 — — (2.7) (4.9) —
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.9 $ 13.6 $ (5.1) $ — $ (2.7) $ (4.9) $ —
The fair values of derivative assets and liabilities associated with contracts that include netting language that the Company
believes to be enforceable have been netted in the following tables to present the Company's net exposure with these counterparties.
The Company's rights under these agreements generally allow for transactions to be settled on a net basis, including upon early
termination, which could occur upon the counterparty's default, a change in control, or other conditions.
In addition, certain of the Company's other agreements include netting provisions, the enforceability of which may vary from
jurisdiction to jurisdiction and depending on the circumstances. Due to the uncertainty related to the enforceability of these
provisions, the derivative balances associated with these agreements are included within "Derivatives that are not or may not be
subject to master netting arrangement or similar agreement" in the following tables. In certain circumstances, the Company may
require its Business Solutions customers to maintain collateral balances which may mitigate the risk associated with potential
customer defaults.