Derivative Financial Instruments

Automotive The following table presents the notional amounts of derivative financial instruments in our automotive operations:



	Fair Value Level	June 30, 2018		December 31, 2017
Derivatives not designated as hedges(a)
Foreign currency	2	$	4,459	$	4,022
Commodity	2	632		606
PSA warrants(b)	2	46		48
Total derivative financial instruments		$	5,137	$	4,676

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(a)	The fair value of these derivative instruments at June 30, 2018 and December 31, 2017 and the gains/losses included in our condensed consolidated income statements for the three and six months ended June 30, 2018 and 2017 were insignificant, unless otherwise noted.


(b)	The fair value of the PSA warrants located in Other assets was $888 million and $764 million at June 30, 2018 and December 31, 2017. We recorded gains of $27 million and $153 million in Interest income and other non-operating income, net in the three and six months ended June 30, 2018.

We estimate the fair value of the PSA warrants using a Black-Scholes formula. The significant inputs to the model include the PSA stock price and the estimated dividend yield. The estimated dividend yield is adjusted based on the terms of the Master Agreement with PSA Group dated March 5, 2017 (the Agreement). Refer to Exhibit 2.1 of our 2017 Form 10-K for additional details. Under the terms of the Agreement upon exercise of the warrants we are entitled to receive any dividends by PSA between the issuance date and the conversion date.

GM Financial The following table presents the notional amounts of GM Financial's derivative financial instruments:



	Fair Value Level	June 30, 2018		December 31, 2017
Derivatives designated as hedges(a)
Fair value hedges – interest rate contracts(b)(c)	2	$	11,154	$	11,110
Cash flow hedges
Interest rate contracts	2	1,108		2,177
Foreign currency	2	2,122		1,574
Derivatives not designated as hedges(a)
Interest rate contracts(c)(d)	2	89,753		81,938
Foreign currency	2	1,884		1,201
Total derivative financial instruments		$	106,021	$	98,000

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(a)	The fair value of these derivative instruments at June 30, 2018 and December 31, 2017 and the gains/losses included in our condensed consolidated income statements and statements of comprehensive income for the three and six months ended June 30, 2018 and 2017 were insignificant, unless otherwise noted.


(b)	The fair value of these derivative instruments located in Other liabilities was $460 million and $290 million at June 30, 2018 and December 31, 2017. The fair value of these derivative instruments located in Other assets was insignificant at June 30, 2018 and December 31, 2017.


(c)	Amounts accrued for interest payments in a net receivable position are included in Other assets.


(d)	The fair value of these derivative instruments located in Other assets was $534 million and $329 million at June 30, 2018 and December 31, 2017. The fair value of these derivative instruments located in Other liabilities was $563 million and $207 million at June 30, 2018 and December 31, 2017.

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.

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:



	June 30, 2018
	Carrying Amount of Hedged Items		Cumulative Amount of Fair Value Hedging Adjustments(a)
GM Financial long-term debt	$	15,452	$	685

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(a)	Includes $167 million of hedging adjustments remaining on hedged items for which hedge accounting has been discontinued.