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DERIVATIVE FINANCIAL INSTRUMENTS
 12 Months Ended
Dec. 31, 2023
Disclosure of detailed information about financial instruments [abstract]  
DERIVATIVE FINANCIAL INSTRUMENTS DERIVATIVE FINANCIAL INSTRUMENTS
The company’s activities expose it to a variety of financial risks, including market risk (i.e. currency risk, interest rate risk and other price risk), credit risk and liquidity risk. The company selectively uses derivative financial instruments principally to manage these risks.
The aggregate notional amount of the company’s derivative positions as at December 31, 2023 and 2022 is as follows:
AS AT DEC. 31
(MILLIONS)
Note20232022
Foreign exchange(a)$58,175 $50,601 
Interest rates(b)124,265 61,939 
Equity derivatives(c)2,017 1,942 
Commodity instruments(d)
Energy (GWh)98,345 69,902 
Natural gas (MMBtu – 000’s)144,104 128,381 
a)    Foreign Exchange
The company held the following foreign exchange contracts with notional amounts as at December 31, 2023 and 2022:
Notional Amount
(U.S. Dollars)
Average Exchange Rate
(MILLIONS)2023202220232022
Foreign exchange contracts
Canadian dollars$7,360 $7,381 0.76 0.76 
British pounds7,608 6,880 1.07 1.12 
European Union euros14,814 10,074 1.09 1.01 
Australian dollars3,417 4,088 0.69 0.69 
Indian rupee5,233 3,921 85.57 73.72 
Korean won1
1,091 923 1,303 1,293 
Chinese yuan1
3,083 4,166 6.86 6.07 
Japanese yen1
77 378 138.41 116.26 
Colombian pesos1
2,652 355 4,629 4,800 
Brazilian reais3,969 1,371 0.18 0.16 
Swedish krona— — — 
Other currencies1,532 2,764 VariousVarious
Cross currency interest rate swaps
Canadian dollars6,457 5,673 0.80 0.77 
Australian dollars502 634 0.68 0.93 
Japanese yen1
— 275 — 130.68 
British pounds— 243 — 1.21 
Brazilian reais1
— 749 — 0.19 
Foreign exchange options
Indian rupee379 485 74.20 78.73 
1.Average rate is quoted using USD as base currency.
Included in net income are unrealized net losses on foreign currency derivative contracts amounting to $47 million (2022 – losses of $23 million) and included in the cumulative translation adjustment account in other comprehensive income are losses in respect of foreign currency contracts entered into for hedging purposes amounting to $1.6 billion (2022 – gains of $2.8 billion).
b)    Interest Rates
As at December 31, 2023, the company held interest rate swap and forward starting swap contracts having an aggregate notional amount of $76.1 billion (2022 – $38.6 billion), interest rate swaptions with an aggregate notional amount of $292 million (2022 – $244 million) and interest rate cap contracts with an aggregate notional amount of $47.9 billion (2022 – $22.8 billion).
c)    Equity Derivatives
As at December 31, 2023, the company held equity derivatives with a notional amount of $2.0 billion (2022 – $1.9 billion) which includes $2.0 billion (2022 – $1.9 billion) notional amount that hedges long-term compensation arrangements. The balance represents common equity positions established in connection with the company’s investment activities as well as general equity market hedges. The fair value of these instruments was reflected in the company’s consolidated financial statements at year end.
d)    Commodity Instruments
The company has entered into energy derivative contracts primarily to hedge the sale of generated power. The company endeavors to link forward electricity sale derivatives to specific periods in which it expects to generate electricity for sale. All energy derivative contracts are recorded at an amount equal to fair value and are reflected in the company’s consolidated financial statements. The company has financial contracts outstanding on 144,104,000 MMBtu’s (2022 – 128,381,000 MMBtu’s) of natural gas as part of its electricity sale price risk mitigation strategy.
Other Information Regarding Derivative Financial Instruments
The following table classifies derivatives elected for hedge accounting during the years ended December 31, 2023 and 2022 as either cash flow hedges or net investment hedges. Changes in the fair value of the effective portion of the hedge are recorded in either other comprehensive income or net income, depending on the hedge classification, whereas changes in the fair value of the ineffective portion of the hedge are recorded in net income:
20232022
FOR THE YEARS ENDED DEC. 31
(MILLIONS)
NotionalEffective PortionIneffective PortionNotionalEffective PortionIneffective Portion
Cash flow hedges1
$84,119 $(754)$(12)$49,199 $2,081 $13 
Net investment hedges
45,979 (1,200)— 35,438 2,998 — 
$130,098 $(1,954)$(12)$84,637 $5,079 $13 
1.Notional amount does not include 28,952 GWh and 49,386 MMBtu – 000’s – of commodity derivatives as at December 31, 2023 (2022 – 18,133 GWh, 67,803 MMBtu – 000’s).
The following table presents the change in fair values of the company’s derivative positions during the years ended December 31, 2023 and 2022, for derivatives that are fair valued through profit or loss, and derivatives that qualify for hedge accounting:

(MILLIONS)
Unrealized Gains During 2023
Unrealized Losses During 2023
Net Change During 2023
Net Change During 2022
Foreign exchange derivatives$137 $(90)$47 $23 
Interest rate derivatives205 (215)(10)419 
Equity derivatives— (32)(32)(296)
Commodity derivatives
221 (123)98 (292)
$563 $(460)$103 $(146)
The following table presents the notional amounts underlying the company’s derivative instruments by term to maturity as at December 31, 2023 and 2022, for derivatives that are classified as fair value through profit or loss, and derivatives that qualify for hedge accounting:
20232022
AS AT DEC. 31
(MILLIONS)
<1 Year1 to 5 Years>5 Years
Total Notional
Amount
Total Notional
Amount
Fair value through profit or loss
Foreign exchange derivatives$4,295 $892 $946 $6,133 $7,075 
Interest rate derivatives24,234 19,941 925 45,100 19,976 
Equity derivatives1,231 786 — 2,017 1,942 
Commodity instruments
Energy (GWh)8,482 25,938 34,974 69,394 51,770 
Natural gas (MMBtu – 000’s)85,583 9,135 — 94,718 60,578 
Elected for hedge accounting
Foreign exchange derivatives$17,987 $32,628 $1,426 $52,041 $43,286 
Interest rate derivatives19,308 53,331 6,526 79,165 41,963 
Equity derivatives— — — — — 
Commodity instruments
Energy (GWh)
5,471 10,514 12,966 28,951 18,133 
Natural gas (MMBtu – 000’s)37,142 12,244 — 49,386 67,803