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Derivative Financial Instruments (Tables)
 9 Months Ended
Sep. 30, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Notional and Fair Value Amounts of Client-related and Trading Derivative Financial Instruments
The following table shows the notional and fair values of all derivative financial instruments as of September 30, 2018 and December 31, 2017.
Table 63: Notional and Fair Values of Derivative Financial Instruments
 
September 30, 2018
 
December 31, 2017
 
Notional
Value
 
Fair Value
 
Notional
Value
 
Fair Value
(In Millions)
Asset 1
 
Liability 2
 
Asset 1
 
Liability 2
Derivatives Designated as Hedging under GAAP
 
 
 
 
 
 
 
 
 
 
 
Interest Rate Contracts
 
 
 
 
 
 
 
 
 
 
 
      Fair Value Hedges
$
4,643.7

 
$
33.2

 
$
26.3

 
$
4,473.1

 
$
31.7

 
$
18.2

      Cash Flow Hedges
725.0

 
0.2

 
2.1

 
925.0

 
0.2

 
1.2

Foreign Exchange Contracts
 
 
 
 
 
 
 
 
 
 
 
      Cash Flow Hedges
3,806.6

 
79.3

 
12.6

 
3,289.0

 
28.4

 
13.0

      Net Investment Hedges
3,057.8

 
231.3

 
3.4

 
3,011.3

 
0.6

 
179.5

Total Derivatives Designated as Hedging under GAAP
$
12,233.1

 
$
344.0

 
$
44.4

 
$
11,698.4

 
$
60.9

 
$
211.9

 
 
 
 
 
 
 
 
 
 
 
 
Derivatives Not Designated as Hedging under GAAP
 
 
 
 
 
 
 
 
 
 
 
Non-Designated Risk Management Derivatives
 
 
 
 
 
 
 
 
 
 
 
Foreign Exchange Contracts
$
129.5

 
$
0.6

 
$
2.0

 
$
214.1

 
$
1.1

 
$
0.1

Other Financial Derivatives 3
545.6

 
—

 
37.1

 
404.7

 
—

 
30.4

Total Non-Designated Risk Management Derivatives
$
675.1

 
$
0.6

 
$
39.1

 
$
618.8

 
$
1.1

 
$
30.5

 
 
 
 
 
 
 
 
 
 
 
 
Client-Related and Trading Derivatives
 
 
 
 
 
 
 
 
 
 
 
Foreign Exchange Contracts
$
296,062.5

 
$
2,191.8

 
$
2,161.9

 
$
317,882.5

 
$
2,527.0

 
$
2,522.5

Interest Rate Contracts
7,610.1

 
73.1

 
102.5

 
7,418.0

 
65.1

 
64.1

Total Client-Related and Trading Derivatives
$
303,672.6

 
$
2,264.9

 
$
2,264.4

 
$
325,300.5

 
$
2,592.1

 
$
2,586.6

 
 
 
 
 
 
 
 
 
 
 
 
Total Derivatives Not Designated as Hedging under GAAP
$
304,347.7

 
$
2,265.5

 
$
2,303.5

 
$
325,919.3

 
$
2,593.2

 
$
2,617.1

 
 
 
 
 
 
 
 
 
 
 
 
Total Gross Derivatives
$
316,580.8

 
$
2,609.5

 
$
2,347.9

 
$
337,617.7

 
$
2,654.1

 
$
2,829.0

Less: Netting 4


 
1,622.8

 
1,631.5

 
 
 
1,860.0

 
1,621.4

Total Derivative Financial Instruments


 
$
986.7

 
$
716.4

 


 
$
794.1

 
$
1,207.6

(1)    Derivative assets are reported in other assets on the consolidated balance sheets.
(2)    Derivative liabilities are reported in other liabilities on the consolidated balance sheets.
(3)    This line includes swaps related to sales of certain Visa Class B common shares and total return swap contracts.
(4)    See further detail in Note 22 - Offsetting of Assets and Liabilities.
Cash Flow Hedge Derivative Gains and Losses Recognized in AOCI and Reclassified to Income
The following tables provide fair value and cash flow hedge derivative gains and losses recognized in income during the three and nine months ended September 30, 2018 and 2017.
Table 64: Location and Amount of Fair Value and Cash Flow Hedge Derivative Gains and Losses Recorded in Income
 
Location and Amount of Derivative Gain/(Loss) Recognized in Income
(In Millions)
Interest Income
 
Interest Expense
 
Other Operating Income
 
Other Operating Expense
Three Months Ended September 30,
2018
 
2017
 
2018
 
2017
 
2018
 
2017
 
2018
 
2017
Total amounts on the consolidated statements of income
$
599.2

 
$
453.8

 
$
191.0

 
$
99.6

 
$
20.9

 
$
40.0

 
$
97.1

 
$
92.0

Gains/(Losses) on fair value hedges recognized on
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest Rate Contracts
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recognized on derivatives
13.0

 
7.8

 
(8.9
)
 
0.1

 
—

 
—

 
—

 
—

Recognized on hedged items
(13.0
)
 
(7.8
)
 
8.9

 
(0.1
)
 
—

 
—

 
—

 
—

Amounts related to interest settlements on derivatives
3.5

 
(6.7
)
 
(6.4
)
 
1.1

 
—

 
—

 
—

 
—

Total gain/(loss) recognized on fair value hedges
$
3.5

 
$
(6.7
)
 
$
(6.4
)
 
$
1.1

 
$
—

 
$
—

 
$
—

 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gains/(Losses) on cash flow hedges recognized on
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign Exchange Contracts
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net gain/(loss) reclassified from AOCI to net income
17.3

 
4.2

 
—

 
—

 
0.2

 
1.7

 
—

 
0.1

Interest Rate Contracts
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net gain/(loss) reclassified from AOCI to net income
(0.1
)
 
0.1

 
—

 
—

 
—

 
—

 
—

 
—

Total gain/(loss) reclassified from AOCI to net income on cash flow hedges
$
17.2

 
$
4.3

 
$
—

 
$
—

 
$
0.2

 
$
1.7

 
$
—

 
$
0.1

 
Location and Amount of Derivative Gain/(Loss) Recognized in Income
(In Millions)
Interest Income
 
Interest Expense
 
Other Operating Income
 
Other Operating Expense
Nine Months Ended September 30,
2018
 
2017
 
2018
 
2017
 
2018
 
2017
 
2018
 
2017
Total amounts on the consolidated statements of income
$
1,672.8

 
$
1,281.3

 
$
467.3

 
$
232.1

 
$
87.1

 
$
122.7

 
$
241.4

 
$
239.4

Gains/(Losses) on fair value hedges recognized on
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest Rate Contracts
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recognized on derivatives
77.7

 
(13.0
)
 
(46.0
)
 
(4.0
)
 
—

 
—

 
—

 
—

Recognized on hedged items
(77.7
)
 
13.0

 
46.0

 
4.0

 
—

 
—

 
—

 
—

Amounts related to interest settlements on derivatives
6.4

 
(11.5
)
 
3.3

 
18.3

 
—

 
—

 
—

 
—

Total gain/(loss) recognized on fair value hedges
$
6.4

 
$
(11.5
)
 
$
3.3

 
$
18.3

 
$
—

 
$
—

 
$
—

 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gains/(Losses) on cash flow hedges recognized on
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign Exchange Contracts
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net gain/(loss) reclassified from AOCI to net income
47.5

 
12.1

 
—

 
—

 
3.7

 
4.2

 
—

 
(0.1
)
Interest Rate Contracts
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net gain/(loss) reclassified from AOCI to net income
(0.2
)
 
0.2

 
—

 
—

 
—

 
—

 
—

 
—

Total gain/(loss) reclassified from AOCI to net income on cash flow hedges
$
47.3

 
$
12.3

 
$
—

 
$
—

 
$
3.7

 
$
4.2

 
$
—

 
$
(0.1
)
Location and Amount of Fair Value Hedge Derivative Gains and Losses Recorded in Income
The following table provides the impact of fair value hedge accounting on the carrying value of the designated hedged items as of September 30, 2018.
Table 65: Hedged Items in Fair Value Hedges
 
September 30, 2018
(In Millions)
Carrying Value of the Hedged Items
 
Cumulative Hedge Accounting Basis Adjustment (1)
Available for Sale Debt Securities (2)
$
3,817.5

 
$
159.9

Senior Notes and Long-Term Subordinated Debt
1,248.8

 
(10.4
)
(1)     There are no amounts related to discontinued hedging relationships.
(2)     Carrying value represents amortized cost.
Location and Amount of Gains and Losses Recorded in Income for Non-Designated Risk Management Derivative Instruments
The following table provides the location and amount of gains and losses recorded in the consolidated statements of income for the three and nine months ended September 30, 2018 and 2017.
Table 66: Location and Amount of Gains and Losses Recorded in Income for Derivatives Not Designated as Hedging Under GAAP
(In Millions)
Location of
Derivative Gain / (Loss) Recognized
in Income
Amount of Derivative Gain / (Loss)
Recognized in Income
Three Months Ended September 30,
 
Nine Months Ended September 30,
2018
 
2017
 
2018
 
2017
Non-designated risk management derivatives
 
 
 
 
 
 
 
 
Foreign Exchange Contracts
Other Operating Income
$
(0.8
)
 
$
(5.9
)
 
$
(2.1
)
 
$
2.2

Other Financial Derivatives (1)
Other Operating Income
(9.5
)
 
(4.0
)
 
(21.3
)
 
(8.4
)
Gains/(Losses) from non-designated risk management derivatives
 
$
(10.3
)
 
$
(9.9
)
 
$
(23.4
)
 
$
(6.2
)
 
 
 
 
 
 
 
 
 
Client-related and trading derivatives
 
 
 
 
 
 
 
 
Foreign Exchange Contracts
Foreign Exchange Trading Income
71.7

 
49.1

 
229.1

 
147.1

Interest Rate Contracts
Security Commissions and Trading Income
1.4

 
2.7

 
6.0

 
8.3

Gains/(Losses) from client-related and trading derivatives
 
$
73.1

 
$
51.8

 
$
235.1

 
$
155.4

 
 
 
 
 
 
 
 
 
Total gains/(losses) from derivatives not designated as hedging under GAAP
 
$
62.8

 
$
41.9

 
$
211.7

 
$
149.2

(1) 
This line includes swaps related to sales of certain Visa Class B common shares and total return swap contracts.