Derivative Financial Instruments and Hedging Activities

12 Months Ended

Dec. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments and Hedging Activities

Derivative Financial Instruments and Hedging Activities

Derivative swap and cap agreements consist of the following (in millions):

	December 31, 2014				December 31, 2013
	Notional		Fair Value(a)		Notional		Fair Value(a)
Assets
Interest rate swaps	$	1,652	$	6	$	2,422	$	11
Interest rate caps	2,123		6		1,398		7
Foreign currency swaps	1,594		4		1,678		3
Total assets(b)	$	5,369	$	16	$	5,498	$	21
Liabilities
Interest rate swaps	$	5,627	$	39	$	4,266	$	17
Interest rate caps	1,804		6		1,206		7
Foreign currency swaps	1,044		1		2,133		29
Total liabilities(c)	$	8,475	$	46	$	7,605	$	53

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(a) See Note 10 - "Fair Values of Assets and Liabilities" for further discussion of fair value disclosure related to the derivatives.

(b) Included in other assets on the consolidated balance sheets.

(c) Included in other liabilities on the consolidated balance sheets.

We purchase interest rate cap agreements to limit floating rate exposures on certain of our revolving secured debt. We also utilize interest rate swap agreements to convert floating rate exposures on certain of our revolving debt or on securities issued in securitization transactions to fixed rates, thereby hedging the variability in interest expense paid.

We provided loans denominated in foreign currencies (Euro, British Pound and Swedish Krona) to certain of our international entities for the equivalent of $1.0 billion at December 31, 2014. We purchase foreign currency swaps to hedge against any valuation change in the loans due to changes in foreign exchange rates. In addition, our operations in the U.K. issued $550 million in debt denominated in U.S. Dollars and put a cross-currency swap in place to hedge against any valuation change in the debt due to changes in exchange rates.

The following tables present information on the effect of derivative instruments on the consolidated statements of income and comprehensive income (in millions):

	Income (Losses) Recognized In Income
	Years Ended December 31,
	2014			2013			2012
Non-designated hedges:
Interest rate contracts(a)	$	(51	)	$	(1	)	$	—
Foreign currency derivatives(b)	163			(118		)	—
	$	112		$	(119	)	$	—

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(a) Losses recognized in earnings are included in interest expense.

(b) Activity is substantially offset by translation activity (included in operating expenses) related to the foreign currency-denominated loans described above.