Derivatives and Hedging Activities (Tables)

3 Months Ended

Mar. 31, 2018

Derivatives and Hedging Activities (Tables) [Abstract]

Schedule of derivative instruments in statement of financial position, fair value

The following table summarizes the total fair value, excluding interest accruals, of derivative assets and liabilities as of March 31, 2018 and December 31, 2017:

		Other Assets Fair Value				Other Liabilities Fair Value
(Millions)		2018		2017		2018		2017
Derivatives designated as hedging instruments:
	Fair value hedges - Interest rate contracts(a)	$	3	$	11	$	95	$	34
	Net investment hedges - Foreign exchange contracts		71		117		167		89
Total derivatives designated as hedging instruments			74		128		262		123
Derivatives not designated as hedging instruments:
	Foreign exchange contracts, including certain embedded derivatives(b)		77		82		117		95
Total derivatives, gross			151		210		379		218
Less: Cash collateral netting(c)(d)			―		(6)		(94)		(45)
	Derivative asset and derivative liability netting(e)		(85)		(80)		(85)		(80)
Total derivatives, net		$	66	$	124	$	200	$	93

• For centrally cleared derivatives, variation margin payments are legally characterized as settlement payments as opposed to collateral. Accordingly, the amounts disclosed for centrally cleared derivatives are based on gross assets and gross liabilities, net of variation margin. We also maintained several bilateral interest rate contracts that are shown gross of any collateral exchanged.
• Includes foreign currency derivatives embedded in certain operating agreements.
• Represents the offsetting of the fair value of bilateral interest rate contracts and certain foreign exchange contracts with the right to reclaim cash collateral or the obligation to return cash collateral.
• We posted $125 million and $146 million as of March 31, 2018 and December 31, 2017, respectively, as initial margin on our centrally cleared interest rate swaps; such amounts are recorded within Other receivables on the Consolidated Balance Sheets and are not netted against the derivative balances.
• Represents the amount of netting of derivative assets and derivative liabilities executed with the same counterparty under an enforceable master netting arrangement.

Effect of fair value hedges on results of operations

The following table represents the total amounts of income and expense line items associated with the fair value hedges of our fixed-rate long-term debt on the Consolidated Statements of Income for the three months endedMarch 31:

		Gains (losses)
(Millions)	2018		2017
		Interest expense(a)		Other expenses
Hedged items	$	210	$	50
Derivatives designated as hedging instruments		(191)		(75)
Total	$	19	$	(25)

We adopted new accounting guidance providing targeted improvements to the accounting for hedging activities effective January 1, 2018. In compliance with the standard, amounts previously recorded in Other expenses have been prospectively recorded in Total interest expense. Refer to Note 1 for additional information.