Hedging Activities

3 Months Ended

Jun. 30, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Hedging activities disclosure [Text Block]

Hedging Activities

In the normal course of business, we are exposed to interest rate changes and foreign currency fluctuations. At times, we limit these risks through the use of derivatives such as interest rate swaps and forward foreign exchange contracts. In accordance with our policy, derivatives are only used for hedging purposes. We do not use derivatives for trading or speculative purposes.

Foreign currency rate risk

The majority of our operations are conducted in U.S. dollars; however, certain assets and liabilities, revenues and expense and purchasing activities are incurred in and exposed to other currencies. We have certain foreign currency rate risk programs that manage the impact of foreign currency fluctuation including the use of foreign currency forward-exchange contracts. These contracts are used to offset the potential earnings effects from mostly intercompany foreign currency loans. These programs reduce but do not entirely eliminate foreign currency rate risk.

At June 30, 2015 and March 31, 2015, forward contracts to hedge the U.S. dollar against cash flows denominated in Canadian dollars with total notional values of $399 million were designated for hedge accounting. These contracts will mature between March 2016 and March 2020. Changes in the fair values of contracts designated for hedge accounting are recorded to accumulated other comprehensive income and reclassified into earnings in the same period in which the hedged transaction affects earnings; amounts recorded to earnings for these contracts were not material during the first quarters of 2016 and 2015.

We also have a number of forward contracts to primarily hedge the Euro against cash flows denominated in British pounds and other European currencies. At June 30, 2015 and March 31, 2015, the total notional value of these contracts was $2,002 million and $1,755 million. These contracts will mature from July 2015 to June 2016 and none of these contracts were designated for hedge accounting. Changes in the fair values of contracts not designated for hedge accounting are recorded directly to earnings and accordingly, net losses from the changes in the fair value of these contracts of $45 million and $20 million were recorded within operating expenses during the first quarters of 2016 and 2015. However, the losses from these contracts are largely offset by changes in the value of the underlying intercompany foreign currency loans.

Information regarding the fair value of derivatives on a gross basis is as follows:

	Balance Sheet Caption	June 30, 2015						March 31, 2015
		Fair Value of Derivative				U.S. Dollar Notional		Fair Value of Derivative				U.S Dollar Notional
(In millions)		Asset		Liability				Asset		Liability
Derivatives designated for hedge accounting
Foreign exchange  contracts (current)	Prepaid expenses and other	$	13	$	—	$	76	$	14	$	—	$	76
Foreign exchange  contracts (non-current)	Other assets	50		—		323		53		—		323
Total		$	63	$	—			$	67	$	—
Derivatives not designated for hedge accounting
Foreign exchange  contracts (current)	Prepaid expenses and other	$	1	$	—	$	248	$	7	$	—	$	493
Foreign exchange  contracts (current)	Other accrued liabilities	—		51		1,754		—		79		1,262
Total		$	1	$	51			$	7	$	79

Refer to Financial Note 12, "Fair Value Measurements," for more information on these recurring fair value measurements.