Derivatives and Hedging Activities (Tables)

3 Months Ended

Mar. 31, 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 March 31, 2018 and December 31, 2017:

		Other Assets				Other Liabilities
		Fair Value				Fair Value
(Millions)		2018		2017		2018		2017
Derivatives designated as hedging instruments:
Fair value hedges - Interest rate contracts (a)		$	―	$	―	$	―	$	―
Net investment hedges - Foreign exchange contracts			33		54		33		38
Total derivatives designated as hedging instruments			33		54		33		38
Derivatives not designated as hedging instruments:
	Foreign exchange contracts		12		9		68		57
Total derivatives, gross			45		63		101		95
Less: Cash collateral netting (b)			―		―		―		―
Derivative asset and derivative liability netting (c)			(21)		(26)		(21)		(26)
Total derivatives, net		$	24	$	37	$	80	$	69

• For centrally cleared derivatives, variation margin payments are legally characterized as settlement payments as opposed to collateral. Accordingly, the amounts for centrally cleared derivatives are based on gross assets and gross liabilities, net of variation margin.
• Credco posted $98 million and $115 million as of March 31, 2018 and December 31, 2017, respectively, as initial margin on its centrally cleared interest rate swaps; such amounts are recorded within Other assets on Credco’s 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 total amounts of income and expense line items associated with fair value hedges ofCredco’s fixed-rate long-term debt on the Consolidated Statements of Income and Retained Earningsfor the three months endedMarch 31:

		Gains (losses)
(Millions)		2018		2017
		Interest Expense(a)		Other Expenses
Hedged items	$	115	$	29
Derivatives designated as hedging instruments		(95)		(50)
Total	$	20	$	(21)

Credco 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 Interest expense. Refer to Note 1 for additional information.