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Derivative Financial Instruments (Tables)
 6 Months Ended
Jun. 30, 2019
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 June 30, 2019 and December 31, 2018.
Table 68: Notional and Fair Values of Derivative Financial Instruments
 
June 30, 2019
 
December 31, 2018
 
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
$
4,475.3

 
$
22.4

 
$
24.3

 
$
4,590.4

 
$
29.8

 
$
23.3

      Cash Flow Hedges
550.0

 
0.2

 
0.3

 
600.0

 
0.2

 
1.2

Foreign Exchange Contracts
 
 
 
 
 
 
 
 
 
 
 
      Cash Flow Hedges
974.4

 
13.7

 
8.9

 
2,648.2

 
13.8

 
57.8

      Net Investment Hedges
2,641.3

 
48.1

 
9.1

 
3,475.1

 
292.4

 
14.5

Total Derivatives Designated as Hedging under GAAP
$
8,641.0

 
$
84.4

 
$
42.6

 
$
11,313.7

 
$
336.2

 
$
96.8

 
 
 
 
 
 
 
 
 
 
 
 
Derivatives Not Designated as Hedging under GAAP
 
 
 
 
 
 
 
 
 
 
 
Non-Designated Risk Management Derivatives
 
 
 
 
 
 
 
 
 
 
 
Foreign Exchange Contracts
$
119.4

 
$
0.5

 
$
0.1

 
$
122.2

 
$
0.5

 
$
0.2

Other Financial Derivatives 3
620.0

 
—

 
35.3

 
483.4

 
1.3

 
32.8

Total Non-Designated Risk Management Derivatives
$
739.4

 
$
0.5

 
$
35.4

 
$
605.6

 
$
1.8

 
$
33.0

 
 
 
 
 
 
 
 
 
 
 
 
Client-Related and Trading Derivatives
 
 
 
 
 
 
 
 
 
 
 
Foreign Exchange Contracts
$
291,041.7

 
$
1,679.1

 
$
1,664.6

 
$
281,864.4

 
$
2,159.4

 
$
2,190.0

Interest Rate Contracts
8,245.5

 
127.8

 
72.9

 
7,711.2

 
66.1

 
68.6

Total Client-Related and Trading Derivatives
$
299,287.2

 
$
1,806.9

 
$
1,737.5

 
$
289,575.6

 
$
2,225.5

 
$
2,258.6

 
 
 
 
 
 
 
 
 
 
 
 
Total Derivatives Not Designated as Hedging under GAAP
$
300,026.6

 
$
1,807.4

 
$
1,772.9

 
$
290,181.2

 
$
2,227.3

 
$
2,291.6

 
 
 
 
 
 
 
 
 
 
 
 
Total Gross Derivatives
$
308,667.6

 
$
1,891.8

 
$
1,815.5

 
$
301,494.9

 
$
2,563.5

 
$
2,388.4

Less: Netting 4
 
 
1,171.6

 
1,248.6

 
 
 
1,357.1

 
1,796.3

Total Derivative Financial Instruments


 
$
720.2

 
$
566.9

 


 
$
1,206.4

 
$
592.1

(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 23 - 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 six months ended June 30, 2019 and 2018.
Table 69: 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
Three Months Ended June 30,
2019
 
2018
 
2019
 
2018
 
2019
 
2018
Total amounts on the consolidated statements of income
$
640.2

 
$
567.7

 
$
222.8

 
$
154.4

 
$
38.9

 
$
31.4

Gains/(Losses) on fair value hedges recognized on
 
 
 
 
 
 
 
 
 
 
 
Interest Rate Contracts
 
 
 
 
 
 
 
 
 
 
 
Recognized on derivatives
(48.7
)
 
10.4

 
61.7

 
(15.2
)
 
—

 
—

Recognized on hedged items
48.7

 
(10.4
)
 
(61.7
)
 
15.2

 
—

 
—

Amounts related to interest settlements on derivatives
5.0

 
6.6

 
3.7

 
8.3

 
—

 
—

Total gain/(loss) recognized on fair value hedges
$
5.0

 
$
6.6

 
$
3.7

 
$
8.3

 
$
—

 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
Gains/(Losses) on cash flow hedges recognized on
 
 
 
 
 
 
 
 
 
 
 
Foreign Exchange Contracts
 
 
 
 
 
 
 
 
 
 
 
Net gain/(loss) reclassified from AOCI to net income
$
3.7

 
$
16.0

 
$
—

 
$
—

 
$
0.3

 
$
1.1

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

 
—

 
—

 
—

Total gain/(loss) reclassified from AOCI to net income on cash flow hedges
$
3.5

 
$
15.9

 
$
—

 
$
—

 
$
0.3

 
$
1.1

 
Location and Amount of Derivative Gain/(Loss) Recognized in Income
(In Millions)
Interest Income
 
Interest Expense
 
Other Operating Income
Six Months Ended June 30,
2019
 
2018
 
2019
 
2018
 
2019
 
2018
Total amounts on the consolidated statements of income
$
1,303.0

 
$
1,073.6

 
$
463.6

 
$
276.3

 
$
67.9

 
$
66.2

Gains/(Losses) on fair value hedges recognized on
 
 
 
 
 
 
 
 
 
 
 
Interest Rate Contracts
 
 
 
 
 
 
 
 
 
 
 
Recognized on derivatives
(84.1
)
 
64.7

 
90.2

 
(37.1
)
 
—

 
—

Recognized on hedged items
84.1

 
(64.7
)
 
(90.2
)
 
37.1

 
—

 
—

Amounts related to interest settlements on derivatives
10.5

 
2.9

 
2.1

 
9.7

 
—

 
—

Total gain/(loss) recognized on fair value hedges
$
10.5

 
$
2.9

 
$
2.1

 
$
9.7

 
$
—

 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
Gains/(Losses) on cash flow hedges recognized on
 
 
 
 
 
 
 
 
 
 
 
Foreign Exchange Contracts
 
 
 
 
 
 
 
 
 
 
 
Net gain/(loss) reclassified from AOCI to net income
$
18.1

 
$
30.2

 
$
—

 
$
—

 
$
(0.3
)
 
$
3.5

Interest Rate Contracts
 
 
 
 
 
 
 
 
 
 
 
Net gain/(loss) reclassified from AOCI to net income
(0.4
)
 
(0.1
)
 
—

 
—

 
—

 
—

Total gain/(loss) reclassified from AOCI to net income on cash flow hedges
$
17.7

 
$
30.1

 
$
—

 
$
—

 
$
(0.3
)
 
$
3.5
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 June 30, 2019 and December 31, 2018.
Table 70: Hedged Items in Fair Value Hedges
 
June 30, 2019
 
December 31, 2018
(In Millions)
Carrying Value of the Hedged Items
 
Cumulative Hedge Accounting Basis Adjustment (1)
 
Carrying Value of the Hedged Items
 
Cumulative Hedge Accounting Basis Adjustment (2)
Available for Sale Debt Securities (3)
$
3,255.8

 
$
15.8

 
$
3,831.6

 
$
99.4

Senior Notes and Long-Term Subordinated Debt
1,748.4

 
119.7

 
1,248.8

 
29.3

Total
$
5,004.2

 
$
135.5

 
$
5,080.4

 
$
128.7

(1)    The cumulative hedge accounting basis adjustment includes $2.0 million related to discontinued hedging relationships of available for sale debt securities as of June 30, 2019. There are no amounts related to discontinued hedging relationships in the cumulative hedge accounting basis adjustment of senior notes and long-term debt as of June 30, 2019.
(2)    There are no amounts related to discontinued hedging relationships as of December 31, 2018.
(3)    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 six months ended June 30, 2019 and 2018.
Table 71: 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 June 30,
 
Six Months Ended June 30,
2019
 
2018
 
2019
 
2018
Non-designated risk management derivatives
 
 
 
 
 
 
 
 
Foreign Exchange Contracts
Other Operating Income
$
(0.8
)
 
$
(5.4
)
 
$
0.1

 
$
(1.3
)
Other Financial Derivatives (1)
Other Operating Income
(4.1
)
 
(7.8
)
 
(11.4
)
 
(11.8
)
Gains/(Losses) from non-designated risk management derivatives
 
$
(4.9
)
 
$
(13.2
)
 
$
(11.3
)
 
$
(13.1
)
 
 
 
 
 
 
 
 
 
Client-related and trading derivatives
 
 
 
 
 
 
 
 
Foreign Exchange Contracts
Foreign Exchange Trading Income
$
60.5

 
$
78.9

 
$
126.7

 
$
157.4

Interest Rate Contracts
Security Commissions and Trading Income
2.8

 
2.9

 
4.3

 
4.6

Gains/(Losses) from client-related and trading derivatives
 
$
63.3

 
$
81.8

 
$
131.0

 
$
162.0

 
 
 
 
 
 
 
 
 
Total gains/(losses) from derivatives not designated as hedging under GAAP
 
$
58.4

 
$
68.6

 
$
119.7

 
$
148.9

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