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SEC Filings

10-Q
WORLDPAY, INC. filed this Form 10-Q on 05/03/2019
Entire Document
 
Worldpay, Inc.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Cash Flow Hedges of Interest Rate Risk

The following table presents the Company’s interest rate swaps and caps (in millions):
Derivative
 
Notional Value
 
Exposure Periods
 
Strike Rate
Interest rate swap
 
$
600

 
June 2018 to January 2021
 
 
Interest rate swap
 
500

 
June 2019 to June 2021
 
 
Total
 
$
1,100

 
 
 
 
 
 
 
 
 
 
 
Interest rate cap
 
$
1,000

 
January 2017 to January 2020
 
0.75%
Interest rate cap
 
600

 
June 2018 to June 2021
 
2.25%
Total
 
$
1,600

 
 
 
 


The Company does not offset derivative positions in the accompanying consolidated financial statements. The table below presents the fair value of the Company’s derivative financial instruments designated as cash flow hedges included within the accompanying Consolidated Statements of Financial Position (in millions):
 
Consolidated Statement of
Financial Position Location
 
March 31, 2019
 
December 31, 2018
Interest rate contracts
Other current assets
 
$
14.5

 
$
19.3

Interest rate contracts
Other long-term assets
 
1.5

 
5.3

Interest rate contracts
Other current liabilities
 
4.1

 
1.8

Interest rate contracts
Other long-term liabilities
 
11.3

 
8.2


As of March 31, 2019, the Company estimates that $1.4 million will be reclassified from accumulated other comprehensive income as a decrease to interest expense during the next 12 months.

The table below presents the pre-tax effect of the Company’s interest rate contracts on the accompanying Consolidated Statements of Comprehensive Income for the three months ended March 31, 2019 and 2018 (in millions): 
 
Three Months Ended March 31,
 
2019
 
2018
Derivatives in cash flow hedging relationships:
 
 
 
Amount of (loss) gain recognized in OCI (1)
$
(9.4
)
 
$
6.3

Amount of gain (loss) reclassified from OCI into earnings
2.2

 
(0.6
)
Amount of gain recognized in earnings

 
0.1

 
(1) 
“OCI” represents other comprehensive income.

The location and amount of gains or losses recognized in the consolidated results of operations for cash flow hedging relationships for each of the periods, presented on a pretax basis, are as follows (in millions):
 
Three Months Ended March 31,
 
2019
 
2018
 
Interest Expense - Net
 
Interest Expense - Net
Total amounts of income and expense line items presented in the consolidated results of operations in which effects of cash flow hedges are recorded
$
72.1

 
$
75.2

Gain (loss) on cash flow hedging relationships
2.2

 
(0.6
)


Credit Risk Related Contingent Features

As of March 31, 2019, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $15.8 million.


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