Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2015

Estimated fair value of assets and liabilities

	March 31, 2015						December 31, 2014
			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)	$	72,748	$	78,974	$	(a)	$	193,214	$	197,833
Other commercial mortgages		(a)		1,430		1,569		(a)		1,427		1,508
Loans held for sale		(a)		76,679		76,797		(a)		1,830		1,855
Other financial instruments(b)		(a)		239		315		(a)		566		786
Liabilities
Borrowings and bank deposits(c)(d)		(a)		(335,941)		(351,046)		(a)		(349,041)		(365,724)
Investment contract benefits		(a)		(2,923)		(3,553)		(a)		(2,970)		(3,565)
Guaranteed investment contracts		(a)		(1,000)		(1,049)		(a)		(1,000)		(1,031)
Insurance - credit life(e)		-		-		-		1,843		(90)		(77)

(a) These financial instruments do not have notional amounts.

(b) Principally comprises cost method investments.

(d) Fair values exclude interest rate and currency derivatives designated as hedges of borrowings. Had they been included, the fair value of borrowings at March 31, 2015 and December 31, 2014 would have been reduced by $4,514 million and $5,020 million, respectively.

(e) Net of reinsurance of none and $964 million at March 31, 2015 and December 31, 2014, respectively.

Loan commitments

NOTIONAL AMOUNTS OF LOAN COMMITMENTS

(In millions)	March 31, 2015		December 31, 2014

Ordinary course of business lending commitments(a)	$	2,935	$	3,239
Unused revolving credit lines(b)
Commercial(c)		12,987		14,681
Consumer – principally credit cards		309,688		306,188

(a) Excluded investment commitments of $742 million and $835 million at March 31, 2015 and December 31, 2014, respectively.

(b) Excluded amounts related to inventory financing arrangements, which may be withdrawn at our option, of $13,530 million and $15,041 million at March 31, 2015 and December 31, 2014, respectively.

(c) Included amounts related to commitments of $9,434 million and $10,509 million at March 31, 2015 and December 31, 2014, respectively, associated with secured financing arrangements that could have increased to a maximum of $11,656 million and $12,353 million at March 31, 2015 and December 31, 2014, respectively, based on asset volume under the arrangement.

Fair value of derivatives by contract type

FAIR VALUE OF DERIVATIVES

	March 31, 2015				December 31, 2014
(In millions)	Assets		Liabilities		Assets		Liabilities

Derivatives accounted for as hedges
Interest rate contracts	$	6,106	$	241	$	5,859	$	461
Currency exchange contracts		3,154		1,398		2,435		779
Other contracts		-		-		-		-
		9,260		1,639		8,294		1,240

Derivatives not accounted for as hedges
Interest rate contracts		152		137		186		141
Currency exchange contracts		728		3,667		598		2,910
Other contracts		54		14		26		22
		934		3,818		810		3,073

Gross derivatives recognized in statement of
financial position
Gross derivatives		10,194		5,457		9,104		4,313
Gross accrued interest		947		(31)		1,398		(18)
		11,141		5,426		10,502		4,295

Amounts offset in statement of financial position
Netting adjustments(a)		(4,872)		(4,877)		(3,705)		(3,713)
Cash collateral(b)		(3,312)		(493)		(3,695)		(502)
		(8,184)		(5,370)		(7,400)		(4,215)

Net derivatives recognized in statement of
financial position
Net derivatives		2,957		56		3,102		80

Amounts not offset in statement of
financial position
Securities held as collateral(c)		(2,148)		-		(3,083)		-

Net amount	$	809	$	56	$	19	$	80

Derivatives are classified in the captions “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 March 31, 2015 and December 31, 2014, the cumulative adjustment for non-performance risk was a gain (loss) of $5 million and $8 million, respectively.
Excluded excess cash collateral received and posted of $118 million and $255 million at March 31, 2015, respectively, and $57 million and $211 million at December 31, 2014, respectively.
Excluded excess securities collateral received of $192 million and $305 million at March 31, 2015 and December 31, 2014, respectively.

Fair value hedges

EARNINGS EFFECTS OF FAIR VALUE HEDGING RELATIONSHIPS

	Three months end March 31
		2015				2014
		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	$	1,060	$	(1,091)	$	990	$	(1,005)
Currency exchange contracts		(7)		6		2		(3)

Cash flow hedges

					Gain (loss) reclassified
	Gain (loss) recognized in AOCI				from AOCI into earnings
	for the three months ended March 31				for the three months ended March 31
(In millions)	2015		2014		2015		2014


Interest rate contracts	$	(3)	$	3	$	(39)	$	(69)
Currency exchange contracts		(1,038)		183		(953)		134
Total(a)	$	(1,041)	$	186	$	(992)	$	65

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

Net investment hedges

GAINS (LOSSES) RECOGNIZED THROUGH CTA

	Gain (loss) recognized in CTA				Gain (loss) reclassified from CTA
	for the three months ended March 31				for the three months ended March 31
(In millions)	2015		2014		2015		2014

Currency exchange contracts	$	4,989	$	(1,033)	$	785	$	10