Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2014

Estimated fair value of assets and liabilities

	September 30, 2014						December 31, 2013
			Assets (liabilities)						Assets (liabilities)
	Notional		Carrying		Estimated		Notional		Carrying		Estimated
(In millions)	amount		amount (net)		fair value		amount		amount (net)		fair value

Assets
Loans	$	(a)	$	212,454	$	217,203	$	(a)	$	226,293	$	230,792
Other commercial mortgages		(a)		2,838		2,886		(a)		2,270		2,281
Loans held for sale		(a)		2,446		2,574		(a)		512		512
Other financial instruments(c)		(a)		812		1,224		(a)		1,622		2,203
Liabilities
Borrowings and bank deposits(b)(d)		(a)		(358,457)		(374,185)		(a)		(371,062)		(386,823)
Investment contract benefits		(a)		(3,007)		(3,584)		(a)		(3,144)		(3,644)
Guaranteed investment contracts		(a)		(1,265)		(1,273)		(a)		(1,471)		(1,459)
Insurance - credit life(e)		2,057		(100)		(87)		2,149		(108)		(94)

These financial instruments do not have notional amounts.
See Note 6.
Principally comprises cost method investments.
Fair values exclude interest rate and currency derivatives designated as hedges of borrowings. Had they been included, the fair value of borrowings at September 30, 2014 and December 31, 2013 would have been reduced by $3,824 million and $2,284 million, respectively.
Net of reinsurance of $964 million and $1,250 million at September 30, 2014 and December 31, 2013, respectively.

Loan commitments

Notional Amounts of Loan Commitments

(In millions)	September 30, 2014		December 31, 2013

Ordinary course of business lending commitments(a)	$	4,511	$	4,756
Unused revolving credit lines(b)
Commercial(c)		14,145		16,570
Consumer – principally credit cards		310,602		290,662

Excluded investment commitments of $1,007 million and $1,395 million at September 30, 2014 and December 31, 2013, respectively.
Excluded amounts related to inventory financing arrangements, which may be withdrawn at our option, of $15,972 million and $13,502 million at September 30, 2014 and December 31, 2013, respectively.
Included amounts related to commitments of $9,797 million and $11,629 million at September 30, 2014 and December 31, 2013, respectively, associated with secured financing arrangements that could have increased to a maximum of $12,241 million and $14,590 million at September 30, 2014 and December 31, 2013, respectively, based on asset volume under the arrangement.

Fair value of derivatives by contract type

Fair Value of Derivatives

	September 30, 2014				December 31, 2013
(In millions)	Assets		Liabilities		Assets		Liabilities

Derivatives accounted for as hedges
Interest rate contracts	$	4,630	$	874	$	3,837	$	1,989
Currency exchange contracts		2,424		471		1,746		958
Other contracts		-		-		-		-
		7,054		1,345		5,583		2,947

Derivatives not accounted for as hedges
Interest rate contracts		256		145		270		175
Currency exchange contracts		1,491		2,291		1,753		1,765
Other contracts		18		23		57		22
		1,765		2,459		2,080		1,962

Gross derivatives recognized in statement of
financial position
Gross derivatives		8,819		3,804		7,663		4,909
Gross accrued interest		1,200		35		1,227		241
		10,019		3,839		8,890		5,150

Amounts offset in statement of financial position
Netting adjustments(a)		(3,469)		(3,489)		(3,927)		(3,920)
Cash collateral(b)		(3,584)		(283)		(2,619)		(242)
		(7,053)		(3,772)		(6,546)		(4,162)

Net derivatives recognized in statement of
financial position
Net derivatives		2,966		67		2,344		988

Amounts not offset in statement of
financial position
Securities held as collateral(c)		(2,966)		-		(1,838)		-

Net amount	$	-	$	67	$	506	$	988

Derivatives are classified in other assets and other liabilities and the related accrued interest is classified in other receivables and other liabilities in our financial statements.

The netting of derivative receivables and payables is permitted when a legally enforceable master netting agreement exists. Amounts include fair value adjustments related to our own and counterparty non-performance risk. At September 30, 2014 and December 31, 2013, the cumulative adjustment for non-performance risk was a gain (loss) of $20 million and $(7) million, respectively.
Excluded excess cash collateral received and posted of $76 million and $93 million, and $160 million and $37 million at September 30, 2014 and December 31, 2013, respectively.
Excluded excess securities collateral received of $95 million and $286 million at September 30, 2014 and December 31, 2013, respectively.

Fair value hedges

	Three months ended September 30
		2014				2013
		Gain (loss)		Gain (loss)		Gain (loss)		Gain (loss)
		on hedging		on hedged		on hedging		on hedged
(In millions)		derivatives		items		derivatives		items

Interest rate contracts	$	341	$	(350)	$	(449)	$	410
Currency exchange contracts		(8)		8		(4)		3

	Nine months ended September 30
		2014				2013
		Gain (loss)		Gain (loss)		Gain (loss)		Gain (loss)
		on hedging		on hedged		on hedging		on hedged
(In millions)		derivatives		items		derivatives		items

Interest rate contracts	$	2,056	$	(2,129)	$	(4,290)	$	4,236
Currency exchange contracts		(11)		10		(11)		10

Cash flow hedges

Gains (Losses) Recognized through AOCI

					Gain (loss) reclassified
	Gain (loss) recognized in AOCI				from AOCI into earnings
	for the three months ended September 30				for the three months ended September 30
(In millions)	2014		2013		2014		2013

Interest rate contracts	$	9	$	(24)	$	(53)	$	(88)
Currency exchange contracts		(302)		25		(377)		67
Total(a)	$	(293)	$	1	$	(430)	$	(21)

(a) Gain (loss) is recorded in revenues from services and interest when reclassified to earnings.

					Gain (loss) reclassified
	Gain (loss) recognized in AOCI				from AOCI into earnings
	for the nine months ended September 30				for the nine months ended September 30
(In millions)	2014		2013		2014		2013


Interest rate contracts	$	-	$	(15)	$	(182)	$	(282)
Currency exchange contracts		(267)		263		(387)		186
Total(a)	$	(267)	$	248	$	(569)	$	(96)

a) Gain (loss) is recorded in revenues from services and interest when reclassified to earnings.

Net investment hedges

	Gain (loss) recognized				Gain (loss) reclassified
	in CTA for the				from CTA for the
	three months ended September 30				three months ended September 30
(In millions)	2014		2013		2014		2013


Currency exchange contracts(a)	$	2,792	$	645	$	(24)	$	(169)

(a) Gain (loss) is recorded in revenues from services when reclassified out of AOCI.

	Gain (loss) recognized in CTA				Gain (loss) reclassified from CTA
	for the nine months ended September 30				for the nine months ended September 30
(In millions)	2014		2013		2014		2013

Currency exchange contracts(a)	$	2,194	$	3,162	$	(14)	$	(278)

a) Gain (loss) is recorded in revenues from services when reclassified out of AOCI.