First Data 2012 Annual Report Download - page 78

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FIRST DATA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(a) Gain (loss) is recognized in the “Interest expense” line of the Consolidated Statements of Operations.
(b) Gain (loss) is recognized in the “Other income (expense)” line of the Consolidated Statements of Operations.
Accumulated Derivative Gains and Losses
The following table summarizes activity in other comprehensive income for the years ended December 31, 2012 and 2011
related to derivative instruments classified as cash flow hedges and a net investment hedge held by the Company:
(a) Gains and losses are included in “Unrealized gains on hedging activities” and in “Foreign currency translation adjustment” on
the Consolidated Statements of Comprehensive Income (Loss).
Note 7: Fair Value Measurement
Fair value of financial instruments
Carrying amounts for certain of the Company’ s financial instruments (cash and cash equivalents and short-term borrowings)
approximate fair value due to their short maturities. Accordingly, these instruments are not presented in the following table. The
following table provides the estimated fair values of the remaining financial instruments:
(a) Represents cost for cost method investments. Refer to Note 5 of these Consolidated Financial Statements for a more detailed
discussion of cost method investments.
The estimated fair values of investment securities and derivative financial instruments are described below. Refer to Notes 5 and
6 of these Consolidated Financial Statements for additional information regarding the Company’ s investment securities and derivative
financial instruments, respectively.
The estimated fair market value of FDC’ s long-term borrowings was primarily based on market trading prices and is considered
to be a level 2 measurement. For additional information regarding the Company’ s borrowings, refer to Note 8 of these Consolidated
Financial Statements.
78
Year ended December 31,
(in millions, after tax) 2012 2011
Accumulated loss included in other comprehensive income (loss) at beginning of the perio
d
$ (87.6) $ (181.3)
Less: Reclassifications into earnings from other comprehensive income (loss) 72.2 60.2
(15.4)(121.1)
Increase in fair value of derivatives that qualify for hedge accounting (a) (5.7)33.5
Accumulated loss included in other comprehensive income (loss) at end of the period $ (21.1) $ (87.6)
As of December 31, 2012 As of December 31, 2011
(in millions) Carrying Value Fair Value (a) Carrying Value Fair Value (a)
Financial instruments:
Settlement assets:
Short-term investment securities $125.6 $125.6 $105.7 $105.7
Long-term investment securities $54.3 $ 54.3 $ 181.0 $ 181.0
Other current assets:
Derivative financial instruments $11.1 $ 11.1 $
—
$
—
Other long-term assets:
Long-term investment securities $0.5 $0.5
$0.5
$0.5
Cost method investments $13.4 $13.4 $23.7 $23.7
Derivative financial instruments $89.8 $ 89.8 $ 76.3 $ 76.3
Other current liabilities:
Derivative financial instruments $0.3 $0.3
$ 156.7 $ 156.7
Long-term borrowings:
Long-term borrowings $22,528.9 $ 22,732.6 $ 22,521.7 $ 20,189.8
Other long-term liabilities:
Derivative financial instruments $171.8 $ 171.8 $ 39.7 $ 39.7