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DERIVATIVE FINANCIAL INSTRUMENTS
 12 Months Ended
Dec. 31, 2024
Disclosure of detailed information about financial instruments [abstract]  
DERIVATIVE FINANCIAL INSTRUMENTS DERIVATIVE FINANCIAL INSTRUMENTS
The company’s activities expose it to a variety of financial risks, including market risk (i.e. currency risk, interest rate risk and other price risk), credit risk and liquidity risk. The company selectively uses derivative financial instruments principally to manage these risks.
The aggregate notional amount of the company’s derivative positions as at December 31, 2024 and 2023 is as follows:
AS AT DEC. 31
(MILLIONS)
Note20242023
Foreign exchange(a)$63,064 $58,175 
Interest rates(b)97,961 124,265 
Equity derivatives(c)1,936 2,017 
Commodity instruments(d)
Energy (GWh)173,523 98,345 
Natural gas (MMBtu – 000’s)110,828 144,104 
a)    Foreign Exchange
The company held the following foreign exchange contracts with notional amounts as at December 31, 2024 and 2023:
Notional Amount
(U.S. Dollars)
Average Exchange Rate
(MILLIONS)2024202320242023
Foreign exchange contracts
Canadian dollars$7,878 $7,360 0.74 0.76 
British pounds8,334 7,608 1.15 1.07 
European Union euros15,497 14,814 1.01 1.09 
Australian dollars5,228 3,417 0.66 0.69 
Indian rupee1
7,280 5,233 88.12 85.57 
Korean won1
1,002 1,091 1,380 1,303 
Chinese yuan1
3,604 3,083 6.97 6.86 
Japanese yen1
142 77 137.64 138.41 
Colombian pesos1
2,463 2,652 4,541 4,629 
Brazilian reais1,981 3,969 0.19 0.18 
Other currencies763 1,532 VariousVarious
Cross currency interest rate swaps
Canadian dollars5,661 6,457 0.80 0.80 
Australian dollars346 502 0.66 0.68 
Chinese yuan1
825 — 7.17 — 
Foreign exchange options
Indian rupee1
2,060 379 82.87 74.20 
1.Average rate is quoted using USD as base currency.
Included in net income are unrealized net gains on foreign currency derivative contracts amounting to $236 million (2023 – gains of $47 million) and included in the cumulative translation adjustment account in other comprehensive income are gains in respect of foreign currency contracts entered into for hedging purposes amounting to $2.8 billion (2023 – losses of $1.6 billion).
b)    Interest Rates
As at December 31, 2024, the company held interest rate swap and forward starting swap contracts having an aggregate notional amount of $70.5 billion (2023 – $76.1 billion), interest rate swaptions with an aggregate notional amount of $nil (2023 – $292 million) and interest rate cap contracts with an aggregate notional amount of $27.5 billion (2023 – $47.9 billion).
c)    Equity Derivatives
As at December 31, 2024, the company held equity derivatives with a notional amount of $1.9 billion (2023 – $2.0 billion) which include approximately $1.9 billion (2023 – $2.0 billion) notional amount that hedges long-term compensation
arrangements. The balance represents common equity positions established in connection with the company’s investment activities as well as general equity market hedges. The fair value of these instruments was reflected in the company’s consolidated financial statements at year end.
d)    Commodity Instruments
The company has entered into energy derivative contracts primarily to hedge the sale of generated power. The company endeavors to link forward electricity sale derivatives to specific periods in which it expects to generate electricity for sale. All energy derivative contracts are recorded at an amount equal to fair value and are reflected in the company’s consolidated financial statements. The company has financial contracts outstanding on 110,828,000 MMBtu’s (2023 – 144,104,000 MMBtu’s) of natural gas as part of its electricity sale price risk mitigation strategy.
Other Information Regarding Derivative Financial Instruments
The following table classifies derivatives elected for hedge accounting during the years ended December 31, 2024 and 2023 as either cash flow hedges or net investment hedges. Changes in the fair value of the effective portion of the hedge are recorded in either other comprehensive income or net income, depending on the hedge classification, whereas changes in the fair value of the ineffective portion of the hedge are recorded in net income:
20242023
FOR THE YEARS ENDED DEC. 31
(MILLIONS)
NotionalEffective PortionIneffective PortionNotionalEffective PortionIneffective Portion
Cash flow hedges1
$71,646 $(17)$7 $84,119 $(754)$(12)
Net investment hedges
47,408 2,814 — 45,979 (1,200)— 
$119,054 $2,797 $7 $130,098 $(1,954)$(12)
1.Notional amount does not include 131,526 GWh and 69,082 MMBtu – 000’s – of commodity derivatives as at December 31, 2024 (2023 – 28,952 GWh, 49,386 MMBtu – 000’s).
The following table presents the change in fair values of the company’s derivative positions during the years ended December 31, 2024 and 2023, for derivatives that are fair valued through profit or loss, and derivatives that qualify for hedge accounting:

(MILLIONS)
Unrealized Gains During 2024
Unrealized Losses During 2024
Net Change During 2024
Net Change During 2023
Foreign exchange derivatives$271 $(35)$236 $47 
Interest rate derivatives222 (461)(239)(10)
Equity derivatives500 — 500 (32)
Commodity derivatives
248 (126)122 98 
$1,241 $(622)$619 $103 
The following table presents the notional amounts underlying the company’s derivative instruments by term to maturity as at December 31, 2024 and 2023, for derivatives that are classified as fair value through profit or loss, and derivatives that qualify for hedge accounting:
20242023
AS AT DEC. 31
(MILLIONS)
<1 Year1 to 5 Years>5 Years
Total Notional
Amount
Total Notional
Amount
Fair value through profit or loss
Foreign exchange derivatives$2,576 $4,489 $2,594 $9,659 $6,133 
Interest rate derivatives15,044 15,264 1,393 31,701 45,100 
Equity derivatives1,704 198 34 1,936 2,017 
Commodity instruments
Energy (GWh)3,507 24,011 14,479 41,997 69,394 
Natural gas (MMBtu – 000’s)41,276 470 — 41,746 94,718 
Elected for hedge accounting
Foreign exchange derivatives$15,741 $35,776 $1,888 $53,405 $52,041 
Interest rate derivatives23,888 33,208 9,164 66,260 79,165 
Commodity instruments
Energy (GWh)
14,553 42,697 74,276 131,526 28,951 
Natural gas (MMBtu – 000’s)41,921 27,161 — 69,082 49,386