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SEC Filings

425
FIDELITY NATIONAL INFORMATION SERVICES, INC. filed this Form 425 on 05/13/2019
Entire Document
 


Worldpay, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

 

The Company formally documents all relationships between hedging instruments and underlying hedged transactions, as well as its risk management objective and strategy for undertaking hedge transactions. This process includes linking all derivatives that are designated as cash flow hedges to forecasted transactions. A formal assessment of hedge effectiveness is performed both at inception of the hedge and on an ongoing basis to determine whether the hedge is highly effective in offsetting changes in cash flows of the underlying hedged item. Hedge effectiveness is assessed using a regression analysis. If it is determined that a derivative ceases to be highly effective during the term of the hedge, the Company will discontinue hedge accounting for such derivative.

The Company’s interest rate contracts qualify for hedge accounting under ASC 815, Derivatives and Hedging. Therefore, the effective portion of changes in fair value were recorded in AOCI and will be reclassified into earnings in the same period during which the hedged transactions affect earnings.

Cash Flow Hedges of Interest Rate Risk

The following table presents the Company’s interest rate swaps and caps designated as cash flow hedges entered into to manage fluctuations in interest rates (in millions):

 

Derivative

   Notional Value     

Exposure Periods

   Strike Rate  

Interest rate swap

   $ 500      January 2018 to January 2019   

Interest rate swap

     600      June 2018 to January 2021   

Interest rate swap

     500      June 2019 to June 2021   
  

 

 

       

Total

   $ 1,600        

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

   December 31, 2018      December 31, 2017  

Interest rate contracts

   Other current assets    $ 19.3      $ 9.7  

Interest rate contracts

   Other long-term assets      5.3        14.7  

Interest rate contracts

   Other current liabilities      1.8        4.2  

Interest rate contracts

   Other long-term liabilities      8.2        0.2  

Any ineffectiveness associated with such derivative instruments will be recorded immediately as interest expense in the accompanying Consolidated Statements of Income. As of December 31, 2018, the Company estimates that $5.7 million will be reclassified from accumulated other comprehensive income as a decrease to interest expense during the next 12 months.

 

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