Derivative Financial Instruments and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments

The table below presents the gross fair value amounts of our derivative financial instruments and the associated notional amounts:

	September 30, 2020						December 31, 2019
	Notional		Fair Value of Assets(a)		Fair Value of Liabilities(a)		Notional		Fair Value of Assets(a)		Fair Value of Liabilities(a)
Derivatives designated as hedges
Fair value hedges
Interest rate swaps	$	10,050	$	496	$	2	$	9,458	$	234	$	23
Foreign currency swaps	1,876		77		39		1,796		22		71
Cash flow hedges
Interest rate swaps	914		—		28		590		—		6
Foreign currency swaps	5,365		98		138		4,429		40		119
Derivatives not designated as hedges
Interest rate contracts	110,059		1,023		692		92,400		340		300
Total(b)	$	128,264	$	1,694	$	899	$	108,673	$	636	$	519

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(a)The gross amounts of the fair value of our assets and liabilities are included in other assets and other liabilities, respectively. Amounts accrued for interest payments in a net receivable position are included in other assets. Amounts accrued for interest payments in a net payable position are included in other liabilities. All our derivatives are categorized within Level 2 of the fair value hierarchy. The fair value for Level 2 instruments was derived using the market approach based on observable market inputs including quoted prices of similar instruments and foreign exchange and interest rate forward curves.

(b)We primarily enter into derivative instruments through AmeriCredit Financial Services, Inc. (AFSI); however, our SPEs may also be parties to derivative instruments. Agreements between AFSI and its derivative counterparties include rights of setoff for positions with offsetting values or for collateral held or posted. At September 30, 2020 and December 31, 2019, the fair value of assets and liabilities available for offset was $619 million and $302 million. At September 30, 2020 and December 31, 2019, we held $779 million and $210 million of collateral from counterparties that is available for netting against our asset positions. At September 30, 2020 and December 31, 2019, we posted $195 million and $89 million of collateral to counterparties that is available for netting against our liability positions.

Schedule of Fair Value Hedging Instruments, Statements of Financial Performance and Financial Position, Location

The following amounts were recorded in the condensed consolidated balance sheet related to items designated and qualifying as hedged items in fair value hedging relationships:

	Carrying Amount of Hedged Items				Cumulative Amount of Fair Value Hedging Adjustments(a)
	September 30, 2020		December 31, 2019		September 30, 2020		December 31, 2019
Unsecured debt	$	24,275	$	20,397	$	(713)	$	(77)

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(a)Includes $197 million of unamortized gains and $69 million of unamortized losses remaining on hedged items for which hedge accounting has been discontinued at September 30, 2020 and December 31, 2019.

Effect of Derivative Instruments on the Condensed Consolidated Statements of Income

The tables below present the effect of our derivative financial instruments in the condensed consolidated statements of income:

	Three Months Ended September 30,								Nine Months Ended September 30,
	2020				2019				2020				2019
	Interest Expense(a)		Operating Expenses(b)		Interest Expense(a)		Operating Expenses(b)		Interest Expense(a)		Operating Expenses(b)		Interest Expense(a)		Operating Expenses(b)
Fair value hedges
Hedged items - interest rate swaps	$	14	$	—	$	(159)	$	—	$	(555)	$	—	$	(682)	$	—
Interest rate swaps	(86)		—		80		—		289		—		546		—
Hedged items - foreign currency swaps	—		(79)		—		78		—		(80)		—		85
Foreign currency swaps	(5)		80		(15)		(77)		(26)		84		(46)		(81)
Cash flow hedges
Interest rate swaps	(5)		—		1		—		(8)		—		5		—
Foreign currency swaps	(25)		216		(23)		(134)		(82)		223		(62)		(149)
Derivatives not designated as hedges
Interest rate contracts	83		—		89		—		244		—		79		—
Total (losses) income recognized	$	(24)	$	217	$	(27)	$	(133)	$	(138)	$	227	$	(160)	$	(145)

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(a)Total interest expense was $709 million and $879 million for the three months ended September 30, 2020 and 2019 and $2.3 billion and $2.8 billion for the nine months ended September 30, 2020 and 2019.

(b)Activity is offset by translation activity also recorded in operating expenses related to foreign currency-denominated loans. Total operating expenses were $394 million and $384 million for the three months ended September 30, 2020 and 2019 and $1.1 billion for both the nine months ended September 30, 2020 and 2019.

The tables below present the effect of our derivative financial instruments in the condensed consolidated statements of comprehensive income:

	Gains (Losses) Recognized In Accumulated Other Comprehensive Loss
	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Fair value hedges
Foreign currency swaps	$	(4)	$	(10)	$	(16)	$	(30)
Cash flow hedges
Interest rate swaps	—		(3)		(15)		(5)
Foreign currency swaps	158		(127)		(22)		(198)
Total	$	154	$	(140)	$	(53)	$	(233)

	(Gains) Losses Reclassified From Accumulated Other Comprehensive Loss Into Income(a)(b)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Fair value hedges
Foreign currency swaps	$	4	$	10	$	17	$	32
Cash flow hedges
Interest rate swaps	3		(1)		5		(4)
Foreign currency swaps	(144)		119		(103)		160
Total	$	(137)	$	128	$	(81)	$	188

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(a)All amounts reclassified from accumulated other comprehensive loss were recorded to interest expense.

(b)During the next twelve months, we estimate $86 million in losses will be reclassified into pre-tax earnings from derivatives designated for hedge accounting.