DERIVATIVES AND HEDGING ACTIVITIES

3 Months Ended

Mar. 31, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

NOTE 6: DERIVATIVES AND HEDGING ACTIVITIES

In 2023, we entered into two interest rate floors that were designated as cash flow hedges of interest rate risk associated with our margin receivables. One interest rate floor with a notional amount of $2 billion was effective as of June 30, 2023. Another with a notional amount of $1 billion was effective as of January 1, 2024. Both interest rate floors have a maturity of six months. As of March 31, 2024 and December 31, 2023, the fair value of hedging instruments were immaterial and included in other current assets in our consolidated balance sheets.

Amounts reported in accumulated other comprehensive income (loss) (“AOCI”) related to interest rate floors will be reclassified to net interest revenues as interest payments are received or paid on the hedged items. During the next 12 months, we expect to reclassify $2 million of losses from AOCI as a reduction to net interest revenues. As of March 31, 2024, we hedged our exposure to the variability in future cash flows for forecasted transactions over a maximum period of one year.

The following table summarizes the amount of gain or loss recognized in AOCI on our unaudited condensed consolidated financial statements:


	Three Months Ended March 31,
(in millions)	2024
Derivatives designated as hedging instruments:
Loss reclassified from AOCI into net interest revenues included in effectiveness assessment	$	1

The following table summarizes the components of AOCI related to hedging activities on our unaudited condensed consolidated financial statements:


	Three Months Ended March 31,
(in millions)	2024
Beginning balance	$	(3)
Other comprehensive loss before reclassifications, net of tax	—
Reclassification adjustment for net gains included in net interest revenues, net of tax	1
Other comprehensive loss after reclassifications, net of tax	$	1
Ending balance	$	(2)