Western Union 2014 Annual Report Download - page 270

2014 FORM 10-K
THE WESTERN UNION COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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The aggregate equivalent United States dollar notional amounts of foreign currency derivative customer contracts held by the
Company in its Business Solutions operations as of December 31, 2014 were approximately $5.5 billion. The significant majority
of customer contracts are written in major currencies such as the Australian dollar, British pound, Canadian dollar, and euro.
Interest Rate Hedging — Corporate
The Company utilizes interest rate swaps to effectively change the interest rate payments on a portion of its notes from fixed-
rate payments to short-term LIBOR-based variable rate payments in order to manage its overall exposure to interest rates. The
Company designates these derivatives as fair value hedges. The change in fair value of the interest rate swaps is offset by a change
in the carrying value of the debt being hedged within "Borrowings" in the Consolidated Balance Sheets and "Interest expense" in
the Consolidated Statements of Income has been adjusted to include the effects of interest accrued on the swaps.
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 $975.0 million and $1,550.0 million as of
December 31, 2014 and 2013, respectively. Of this aggregate notional amount held at December 31, 2014, $500.0 million related
to notes due in 2017, $300.0 million related to notes due in 2018, and $175.0 million related to notes due in 2020.
Balance Sheet
The following table summarizes the fair value of derivatives reported in the Consolidated Balance Sheets as of December 31,
2014 and December 31, 2013 (in millions):
Derivative Assets Derivative Liabilities
Fair Value Fair Value
Balance Sheet
Location December 31, 2014 December 31, 2013 Balance Sheet Location December 31, 2014 December 31, 2013
Derivatives — hedges:
Interest rate fair value
hedges — Corporate . . . . . . . . . . . Other assets $ 3.5 $ 11.4 Other liabilities $ 1.9 $ 7.8
Foreign currency cash flow hedges
— Consumer-to-Consumer . . . . . . Other assets 66.1 11.1 Other liabilities 3.5 27.7
Total. . . . . . . . . . . . . . . . . . . . . . . . . . $ 69.6 $ 22.5 $ 5.4 $ 35.5
Derivatives — undesignated:
Foreign currency — Business
Solutions . . . . . . . . . . . . . . . . . . . . Other assets $ 349.4 $ 201.2 Other liabilities $ 310.2 $ 186.2
Foreign currency — Consumer-to-
Consumer. . . . . . . . . . . . . . . . . . . . Other assets 4.0 0.6 Other liabilities 1.5 1.7
Total. . . . . . . . . . . . . . . . . . . . . . . . . . $ 353.4 $ 201.8 $ 311.7 $ 187.9
Total derivatives . . . . . . . . . . . . . . . . . . $ 423.0 $ 224.3 $ 317.1 $ 223.4