Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2013

Estimated fair value of assets and liabilities


	June 30, 2013						December 31, 2012
			Assets (liabilities)						Assets (liabilities)
	Notional		Carrying		Estimated		Notional		Carrying		Estimated
(In millions)	amount		amount (net)		fair value		amount		amount (net)		fair value
Assets
Loans	$	(a)	$	226,586	$	229,999	$	(a)	$	236,678	$	239,084
Other commercial mortgages		(a)		2,202		2,154		(a)		2,222		2,249
Loans held for sale		(a)		875		872		(a)		1,180		1,181
Other financial instruments(c)		(a)		1,778		2,287		(a)		1,858		2,276
Liabilities
Borrowings and bank
deposits(b)(d)		(a)		(375,624)		(387,973)		(a)		(397,300)		(414,533)
Investment contract benefits		(a)		(3,246)		(3,817)		(a)		(3,321)		(4,150)
Guaranteed investment contracts		(a)		(1,546)		(1,549)		(a)		(1,644)		(1,674)
Insurance - credit life(e)		2,197		(116)		(99)		2,277		(120)		(104)

These financial instruments do not have notional amounts.
See Note 6.
Principally cost method investments.
Fair values exclude interest rate and currency derivatives designated as hedges of borrowings. Had they been included, the fair value of borrowings at June 30, 2013 and December 31, 2012 would have been reduced by $3,469 million and $7,937 million, respectively.
Net of reinsurance of $2,000 million at both June 30, 2013 and December 31, 2012.

Loan commitments

	Notional amount at
	June 30,		December 31,
(In millions)	2013		2012

Ordinary course of business lending commitments(a)	$	3,935	$	3,708
Unused revolving credit lines(b)
Commercial(c)		15,870		17,929
Consumer - principally credit cards		276,784		271,387

Excluded investment commitments of $1,542 million and $1,276 million as of June 30, 2013 and December 31, 2012, respectively.
Excluded inventory financing arrangements, which may be withdrawn at our option, of $13,013 million and $12,813 million as of June 30, 2013 and December 31, 2012, respectively.
Included commitments of $11,048 million and $12,923 million as of June 30, 2013 and December 31, 2012, respectively, associated with secured financing arrangements that could have increased to a maximum of $14,093 million and $15,731 million at June 30, 2013 and December 31, 2012, respectively, based on asset volume under the arrangement.

Fair value of derivatives by contract type

	June 30, 2013				December 31, 2012
	Fair value				Fair value
(In millions)	Assets		Liabilities		Assets		Liabilities

Derivatives accounted for as hedges
Interest rate contracts	$	4,875	$	1,621	$	8,443	$	719
Currency exchange contracts		1,438		1,466		827		1,762
Other contracts		-		-		-		-
		6,313		3,087		9,270		2,481

Derivatives not accounted for as hedges
Interest rate contracts		348		172		452		195
Currency exchange contracts		1,133		1,489		1,457		358
Other contracts		46		18		35		26
		1,527		1,679		1,944		579

Gross derivatives recognized in statement of
financial position
Gross derivatives		7,840		4,766		11,214		3,060
Gross accrued interest		1,186		(213)		1,683		14
		9,026		4,553		12,897		3,074

Amounts offset in statement of financial position
Netting adjustments(a)		(3,642)		(3,628)		(2,532)		(2,517)
Cash collateral(b)		(3,164)		(306)		(5,125)		(391)
		(6,806)		(3,934)		(7,657)		(2,908)

Net derivatives recognized in statement of
financial position
Net derivatives		2,220		619		5,240		166

Amounts not offset in statement of
financial position
Securities held as collateral(c)		(2,046)		-		(5,060)		-

Net amount	$	174	$	619	$	180	$	166

Derivatives are classified in the captions “Other assets” and “Other liabilities” and the related accrued interest is classified in “Other receivables” and “Other liabilities” in our financial statements.

The netting of derivative receivables and payables is permitted when a legally enforceable master netting agreement exists. Amounts included fair value adjustments related to our own and counterparty non-performance risk. At June 30, 2013 and December 31, 2012, the cumulative adjustment for non-performance risk was a gain (loss) of $(14) million and $(15) million, respectively.
Excludes excess cash collateral received and posted of $47 million and $28 million at June 30, 2013, respectively, and $42 million and $10 million at December 31, 2012, respectively.
Excludes excess securities collateral received of $22 million and $359 million at June 30, 2013 and December 31, 2012, respectively.

Fair value hedges

	Three months ended June 30,
		2013				2012
(In millions)		Gain (loss)		Gain (loss)		Gain (loss)		Gain (loss)
		on hedging		on hedged		on hedging		on hedged
		derivatives		items		derivatives		items

Interest rate contracts	$	(2,932)	$	2,945	$	2,232	$	(2,312)
Currency exchange contracts		2		(1)		(63)		60

Fair value hedges resulted in $14 million and $(82) million of ineffectiveness in the three months ended June 30, 2013 and 2012, respectively. In both the three months ended June 30, 2013 and 2012, there were insignificant amounts excluded from the assessment of effectiveness.

	Six months ended June 30,
		2013				2012
(In millions)		Gain (loss)		Gain (loss)		Gain (loss)		Gain (loss)
		on hedging		on hedged		on hedging		on hedged
		derivatives		items		derivatives		items

Interest rate contracts	$	(3,841)	$	3,826	$	785	$	(962)
Currency exchange contracts		(7)		7		(111)		100

Fair value hedges resulted in $(15) million and $(187) million of ineffectiveness in the six months ended June 30, 2013 and 2012, respectively. In both the six months ended June 30, 2013 and 2012, there were insignificant amounts excluded from the assessment of effectiveness.

Cash flow hedges

					Gain (loss) reclassified
	Gain (loss) recognized in AOCI				from AOCI into earnings
	for the three months ended June 30,				for the three months ended June 30,
	2013		2012		2013		2012
(In millions)

Cash flow hedges
Interest rate contracts	$	20	$	(52)	$	(92)	$	(124)
Currency exchange contracts		272		(345)		164		(265)
Commodity contracts		0		0		0		0
Total	$	292	$	(397)	$	72	$	(389)

					Gain (loss) reclassified
	Gain (loss) recognized in AOCI				from AOCI into earnings
	for the six months ended June 30,				for the six months ended June 30,
	2013		2012		2013		2012
(In millions)

Cash flow hedges
Interest rate contracts	$	9	$	(79)	$	(194)	$	(264)
Currency exchange contracts		238		340		119		352
Total	$	247	$	261	$	(75)	$	88

The total pre-tax amount in AOCI related to cash flow hedges of forecasted transactions was a $515 million loss at June 30, 2013. We expect to transfer $330 million to earnings as an expense in the next 12 months contemporaneously with the earnings effects of the related forecasted transactions. In both the three and six months ended June 30, 2013 and 2012, we recognized insignificant gains and losses related to hedged forecasted transactions and firm commitments that did not occur by the end of the originally specified period. At June 30, 2013 and 2012, the maximum term of derivative instruments that hedge forecasted transactions was 19 years and 20 years, respectively.

Net investment hedges

	Gain (loss) recognized				Gain (loss) reclassified
	in CTA for the				from CTA for the
	three months ended June 30,				three months ended June 30,
(In millions)	2013		2012		2013		2012

Net investment hedges
Currency exchange contracts	$	412	$	1,853	$	15	$	(2)

	Gain (loss) recognized				Gain (loss) reclassified
	in CTA for the				from CTA for the
	six months ended June 30,				six months ended June 30,
(In millions)	2013		2012		2013		2012

Net investment hedges
Currency exchange contracts	$	2,517	$	351	$	(109)	$	(12)