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Hedging Activities
 6 Months Ended
Sep. 30, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Hedging Activities
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 fluctuations primarily through the use of foreign currency forward-exchange contracts. These contracts are typically used to offset the potential earnings effects from intercompany foreign currency loans. These programs reduce but do not entirely eliminate foreign currency rate risk.
At September 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 quarter and six months ended September 30, 2015 and 2014.
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 September 30, 2015 and March 31, 2015, the total notional value of these contracts was $1,894 million and $1,755 million. These contracts will mature from October 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 gains of $67 million and $22 million for the second quarter and first six months of 2016 and net losses of $30 million and $50 million for the second quarter and first six months of 2015 were recorded within operating expenses. However, the gains and 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
September 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
$
17

$
—

$
76

 
$
14

$
—

$
76

Foreign exchange contracts (non-current)
Other assets
69

—

323

 
53

—

323

Total
 
$
86

$
—

 
 
$
67

$
—

 
Derivatives not designated for hedge accounting
 
 
 
 
 
 
 
 
Foreign exchange contracts (current)
Prepaid expenses and other
$
26

$
—

$
1,769

 
$
7

$
—

$
493

Foreign exchange contracts (current)
Other accrued liabilities
—

7

125

 
—

79

1,262

Total
 
$
26

$
7

 
 
$
7

$
79

 

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