v3.26.1
Derivative Instruments
 3 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments Derivative Instruments
The notional balances and fair values of the Company’s derivatives are presented below. The derivative instruments are presented on a gross basis in the Company’s consolidated balance sheets. Refer to Note 12 regarding the valuation of derivative instruments.
 
June 30, 2026March 31, 2026
Notional
balances		AssetsLiabilitiesNotional
balances		AssetsLiabilities
(U.S. dollars in millions)
Interest rate swaps$76,720 $330 $370 $74,630 $228 $442 
Cross currency swaps8,705 214 234 10,807 341 219 
Gross derivative assets/liabilities544 604 569 661 
Collateral posted/held18 3 24 (2)
Counterparty netting adjustment(476)(476)(419)(419)
Net derivative assets/liabilities$86 $131 $174 $240 
 
The income statement impact of derivative instruments is presented below. There were no derivative instruments designated as part of a hedge accounting relationship during the periods presented.
 
Three months ended June 30,
20262025
(U.S. dollars in millions)
Interest rate swaps$(2)$18 
Cross currency swaps(41)726 
Total gain/(loss) on derivative instruments$(43)$744 
 
The fair value of derivative instruments is subject to fluctuations in market interest rates and foreign currency exchange rates. Since the Company has elected not to apply hedge accounting, the volatility in the changes in fair value of these derivative instruments is recognized in earnings. All periodic interest settlements of derivative instruments are presented within cash flows from operating activities in the consolidated statements of cash flows. The final notional exchange of cross currency swaps are presented within cash flows from financing activities along with the paydowns of the related foreign currency-denominated debt.
These derivative instruments also contain an element of credit risk in the event the counterparties are unable to meet the terms of the agreements. However, the Company minimizes the risk exposure by limiting the counterparties to major financial institutions that meet established credit guidelines. In the event of default, all counterparties are subject to legally enforceable master netting agreements. In Canada, HCFI is a party to credit support annexes that require posting of cash collateral to mitigate counterparty credit risk on derivative positions. Posted collateral is recognized in other assets and held collateral is recognized in other liabilities.