Derivatives and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 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 September 30, 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)		$	―	$	11	$	180	$	34
	Net investment hedges - Foreign exchange contracts			247		117		85		89
Total derivatives designated as hedging instruments				247		128		265		123
Derivatives not designated as hedging instruments:
	Foreign exchange contracts, including certain embedded derivatives(b)			80		82		137		95
Total derivatives, gross				327		210		402		218
Less:		Cash collateral netting(c)(d)		(22)		(6)		(180)		(45)
		Derivative asset and derivative liability netting(e)		(122)		(80)		(122)		(80)
Total derivatives, net			$	183	$	124	$	100	$	93

• For centrally cleared derivatives, variation margin payments are legally characterized as settlement payments as opposed to collateral. Accordingly, assets and liabilities are disclosed for centrally cleared derivatives,each 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 $99 million and $146 million as of September 30, 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 gains and losses associated with the fair value hedges of our fixed-rate long-term debt:

	Gains (losses)
		Three Months Ended September 30,				Nine Months Ended September 30,
(Millions)	2018		2017		2018		2017
		Interest expense(a)		Other expenses		Interest expense(a)		Other expenses
Fixed-rate long-term debt	$	63	$	39	$	331	$	64
Derivatives designated as hedging instruments		(65)		(31)		(323)		(100)
Total	$	(2)	$	8	$	8	$	(36)

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.