Accumulated Other Comprehensive Loss

9 Months Ended

Sep. 30, 2020

Changes in accumulated other comprehensive loss by component, net of income taxes, consisted of the following:



	Three Months Ended September 30, 2020
(In millions)	Cash Flow Hedges		Foreign Currency Translation		Pension Plans		Total
Balance at June 30, 2020	$	(138)	$	(500)	$	(6)	$	(644)
Other comprehensive income (loss) before reclassifications	6		(197)		—		(191)
Amounts reclassified from accumulated other comprehensive loss	4		—		—		4
Net current-period other comprehensive income (loss)	10		(197)		—		(187)
Balance at September 30, 2020	$	(128)	$	(697)	$	(6)	$	(831)



	Three Months Ended September 30, 2019
(In millions)	Cash Flow Hedges		Foreign Currency Translation		Pension Plans		Total
Balance at June 30, 2019	$	(144)	$	(47)	$	(2)	$	(193)
Other comprehensive loss before reclassifications	(4)		(186)		—		(190)
Amounts reclassified from accumulated other comprehensive loss	4		—		—		4
Net current-period other comprehensive loss	—		(186)		—		(186)



Balance at September 30, 2019	$	(144)	$	(233)	$	(2)	$	(379)



	Nine Months Ended September 30, 2020
(In millions)	Cash Flow Hedges		Foreign Currency Translation		Pension Plans		Total
Balance at December 31, 2019	$	(141)	$	(33)	$	(6)	$	(180)
Other comprehensive income (loss) before reclassifications	1		(664)		—		(663)
Amounts reclassified from accumulated other comprehensive loss	12		—		—		12
Net current-period other comprehensive income (loss)	13		(664)		—		(651)
Balance at September 30, 2020	$	(128)	$	(697)	$	(6)	$	(831)




	Nine Months Ended September 30, 2019
(In millions)	Cash Flow Hedges		Foreign Currency Translation		Pension Plans		Total
Balance at December 31, 2018	$	(16)	$	(49)	$	(2)	$	(67)


Other comprehensive loss before reclassifications	(134)		(184)		—		(318)
Amounts reclassified from accumulated other comprehensive loss	6		—		—		6
Net current-period other comprehensive loss	(128)		(184)		—		(312)

Balance at September 30, 2019	$	(144)	$	(233)	$	(2)	$	(379)

The Company has entered into forward exchange contracts, which have been designated as cash flow hedges, to hedge foreign currency exposure to the Indian Rupee. At September 30, 2020, the notional amount of these derivatives was $206 million and the fair value totaling $5 million is reported primarily within prepaid expenses and other current assets in the Company’s consolidated balance sheet. At December 31, 2019, the notional amount of these derivatives was $178 million and the fair value totaling $4 million is reported primarily within prepaid expenses and other current assets in the Company’s consolidated balance sheet. Based on the amounts recorded in accumulated other comprehensive loss at September 30, 2020, the Company estimates that it will recognize gains of approximately $4 million in cost of processing and services during the next twelve months as foreign exchange forward contracts settle.

In March 2019, the Company entered into treasury lock agreements (“Treasury Locks”), designated as cash flow hedges, in the aggregate notional amount of $5.0 billion to manage exposure to fluctuations in benchmark interest rates in anticipation of the issuance of fixed rate debt in connection with the refinancing of certain indebtedness of First Data and its subsidiaries. In June 2019, concurrent with the issuance of U.S dollar-denominated senior notes, the Treasury Locks were settled resulting in a payment, included in cash flows from operating activities, of $183 million recorded in accumulated other comprehensive loss, net of income taxes, that will be amortized to earnings over the terms of the originally forecasted interest payments. Based on the amounts recorded in accumulated other comprehensive loss at September 30, 2020, the Company estimates that it will recognize approximately $21 million in interest expense, net during the next twelve months related to settled interest rate hedge contracts.

To reduce exposure to changes in the value of the Company’s net investments in certain of its foreign currency-denominated subsidiaries due to changes in foreign currency exchange rates, the Company uses its foreign currency-denominated debt as an economic hedge of its net investments in such foreign currency-denominated subsidiaries. In conjunction with the acquisition of First Data, the Company designated its Euro- and British Pound-denominated senior notes as net investment hedges to hedge a portion of its net investment in certain subsidiaries whose functional currencies are the Euro and the British Pound. Accordingly, foreign currency transaction gains or losses on the qualifying net investment hedge instruments are recorded as foreign currency translation within other comprehensive (loss) income in the consolidated statements of comprehensive income and will remain in accumulated other comprehensive loss in the consolidated balance sheets until the sale or complete liquidation of the underlying foreign subsidiaries. The Company recorded a foreign currency translation gain (loss), net of tax, of $(92) million and $(38) million in other comprehensive (loss) income during the three and nine months ended September 30, 2020, respectively, and $28 million during both the three and nine months ended September 30, 2019, from the Euro- and British Pound-denominated senior notes.