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Derivative Financial Instruments and Hedging Activities
 3 Months Ended
Mar. 31, 2025
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 interest rate risk primarily 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, 2025December 31, 2024
NotionalFair Value of AssetsFair Value of LiabilitiesNotionalFair Value of AssetsFair Value of Liabilities
Derivatives designated as hedges
Fair value hedges
Interest rate swaps$44,495 $127 $589 $36,145 $32 $621 
Cash flow hedges
Interest rate swaps2,006 28 17 1,873 35 4 
Foreign currency swaps8,420 137 231 8,363 80 508 
Derivatives not designated as hedges
Interest rate contracts117,569 578 879 123,346 833 1,294 
Total$172,490 $870 $1,715 $169,727 $981 $2,427 
 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 both March 31, 2025 and December 31, 2024, the fair value of derivative instruments that are classified as assets or liabilities available for offset was $693 million. At March 31, 2025 and December 31, 2024, we held $104 million and $190 million of collateral from counterparties that was available for netting against our asset positions. At March 31, 2025 and December 31, 2024, we had $898 million and $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, 2025December 31, 2024March 31, 2025December 31, 2024
Unsecured debt$37,684 $36,664 $960 $1,281 
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(a)Includes $669 million and $719 million of unamortized losses remaining on hedged items for which hedge accounting has been discontinued at March 31, 2025 and December 31, 2024.
The table below presents the effect of our derivative financial instruments in the condensed consolidated statements of income:
Three Months Ended March 31,
20252024
Interest Expense(a)
Operating Expenses(b)
Interest Expense(a)
Operating Expenses(b)
Fair value hedges
Hedged items - interest rate swaps$(321)$— $129 $— 
Interest rate swaps251 — (157)— 
Cash flow hedges
Interest rate swaps4 — 7 — 
Hedged items - foreign currency swaps(c)
— (340)— 178 
Foreign currency swaps(34)340 (41)(176)
Derivatives not designated as hedges
Interest rate contracts7 — 33 — 
Foreign currency contracts— — — 2 
Total income (loss) recognized$(93)$(1)$(28)$3 
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(a)Total interest expense was $1.6 billion and $1.4 billion for the three months ended March 31, 2025 and 2024.
(b)Total operating expenses were $513 million and $458 million for the three months ended March 31, 2025 and 2024.
(c)Transaction activity recorded in operating expenses related to foreign currency-denominated debt.
The tables below present the effect of our derivative financial instruments in the condensed consolidated statements of comprehensive income:
 Gains (Losses) Recognized In
Accumulated Other Comprehensive Income (Loss)
Three Months Ended March 31,
20252024
Cash flow hedges
Interest rate swaps$(14)$9 
Foreign currency swaps157 (141)
Total$143 $(132)
(Gains) Losses Reclassified From Accumulated Other
Comprehensive Income (Loss) Into Income (Loss)
Three Months Ended March 31,
20252024
Cash flow hedges
Interest rate swaps$(3)$(5)
Foreign currency swaps(231)163 
Total$(234)$158 
All amounts reclassified from accumulated other comprehensive income (loss) were recorded to operating expenses or interest expense. During the next 12 months, we estimate an insignificant amount of gains will be reclassified into pre-tax earnings from derivatives designated for hedge accounting.