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Derivative Financial Instruments and Hedging Activities
 3 Months Ended
Mar. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments and Hedging Activities Derivative Financial Instruments and Hedging Activities
We are exposed to certain risks arising from both our business operations and economic conditions. We manage economic risks, including interest rate risk, primarily by managing the amount, sources, and duration of our assets and liabilities and by using derivative financial instruments. Specifically, we enter into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. Our derivative financial instruments are used to manage differences in the amount, timing, and duration of our known or expected cash receipts and our known or expected cash payments principally related to our borrowings.
Certain of our foreign operations expose us to fluctuations of foreign interest rates and exchange rates. We primarily finance our earning assets with debt in the same currency to minimize the impact to earnings from our exposure to fluctuations in exchange rates. When we use a different currency, these fluctuations may impact the value of our cash receipts and payments in terms of our functional currency. We enter into derivative financial instruments to protect the value or fix the amount of certain assets and liabilities in terms of the relevant functional currency.
The table below presents the gross fair value amounts of our derivative financial instruments and the associated notional amounts:
 March 31, 2024December 31, 2023
NotionalFair Value of AssetsFair Value of LiabilitiesNotionalFair Value of AssetsFair Value of Liabilities
Derivatives designated as hedges
Fair value hedges
Interest rate swaps$21,991 $9 $352 $18,379 $75 $238 
Cash flow hedges
Interest rate swaps2,447 16 10 2,381 17 16 
Foreign currency swaps9,208 88 428 8,003 144 311 
Derivatives not designated as hedges
Interest rate contracts123,103 1,576 2,024 134,683 1,573 1,997 
Foreign currency contracts940 2 — — — — 
Total$157,689 $1,691 $2,815 $163,446 $1,809 $2,563 
 The gross amounts of the fair value of our derivative instruments that are classified as assets or liabilities are included in other assets or 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.
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 March 31, 2024 and December 31, 2023, the fair value of derivative instruments that are classified as assets or liabilities available for offset was $1.1 billion and $1.2 billion. At March 31, 2024 and December 31, 2023, we held $447 million and $457 million of collateral from counterparties that was available for netting against our asset positions. At both March 31, 2024 and December 31, 2023, we had $1.2 billion of collateral posted to counterparties that was available for netting against our liability positions.
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)
March 31, 2024December 31, 2023March 31, 2024December 31, 2023
Unsecured debt$34,433 $33,551 $1,158 $1,029 
 _________________
(a)Includes $865 million and $872 million of unamortized losses remaining on hedged items for which hedge accounting has been discontinued at March 31, 2024 and December 31, 2023.
The table below presents the effect of our derivative financial instruments in the condensed consolidated statements of income:
Three Months Ended March 31,
20242023
Interest Expense(a)
Operating Expenses(b)
Interest Expense(a)
Operating Expenses(b)
Fair value hedges
Hedged items - interest rate swaps$129 $— $(29)$— 
Interest rate swaps(157)— 46 — 
Cash flow hedges
Interest rate swaps7 — 9 — 
Hedged items - foreign currency swaps(c)
— 178 — (136)
Foreign currency swaps(41)(176)(37)136 
Derivatives not designated as hedges
Interest rate contracts33 — 52 — 
Foreign currency contracts— 2 — — 
Total income (loss) recognized$(28)$3 $40 $— 
_________________
(a)Total interest expense was $1.4 billion and $1.0 billion for the three months ended March 31, 2024 and 2023.
(b)Total operating expenses were $458 million and $442 million for the three months ended March 31, 2024 and 2023.
(c)Transaction activity recorded in operating expenses related to foreign currency-denominated debt.
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 Income (Loss)
Three Months Ended March 31,
20242023
Cash flow hedges
Interest rate swaps$9 $1 
Foreign currency swaps(141)29 
Total$(132)$30 
(Gains) Losses Reclassified From Accumulated Other
Comprehensive Income (Loss) Into Income (Loss)
Three Months Ended March 31,
20242023
Cash flow hedges
Interest rate swaps$(5)$(7)
Foreign currency swaps163 (76)
Total$158 $(82)
All amounts reclassified from accumulated other comprehensive income (loss) were recorded to interest expense. During the next 12 months, we estimate an insignificant amount of losses will be reclassified into pre-tax earnings from derivatives designated for hedge accounting.