Allstate 2011 Annual Report Download - page 230

The following table provides a summary of the impacts of the Company’s foreign currency contracts in cash flow
hedging relationships in the Consolidated Statements of Operations and the Consolidated Statements of Financial
Position for the years ended December 31. Amortization of net gains from accumulated other comprehensive income
related to cash flow hedges is expected to be $2 million during the next twelve months.
($ in millions)
Effective portion 2010 2009
Gain (loss) recognized in OCI on derivatives during the period $ 3 $ (35)
Loss recognized in OCI on derivatives during the term of the hedging
relationship (22) (23)
Gain reclassified from AOCI into income (net investment income) — 2
Gain (loss) reclassified from AOCI into income (realized capital gains and
losses) 2(3)
Ineffective portion and amount excluded from effectiveness testing
Gain recognized in income on derivatives (realized capital gains and losses) — —
For cash flow hedges, unrealized net pre-tax gains and losses included in accumulated other comprehensive
income were $(22) million and $(23) million as of December 31, 2010 and 2009, respectively. The net pre-tax changes in
accumulated other comprehensive income due to cash flow hedges were $1 million, $(34) million and $44 million in
2010, 2009 and 2008, respectively.
The following tables present gains and losses from valuation, settlements and hedge ineffectiveness reported on
derivatives used in fair value hedging relationships and derivatives not designated as accounting hedging instruments
in the Consolidated Statements of Operations for the years ended December 31.
2010
($ in millions)
Total gain
(loss)
Realized Life and Interest recognized
Net capital annuity credited to Operating in net
investment gains and contract contractholder costs and income on
income losses benefits funds expenses derivatives
Derivatives in fair value accounting hedging
relationships
Interest rate contracts $ (139) $ 9 $ — $ 11 $ — $ (119)
Foreign currency and interest rate contracts — (2) — (18) — (20)
Subtotal (139) 7 — (7) — (139)
Derivatives not designated as accounting
hedging instruments
Interest rate contracts — (496) — — — (496)
Equity and index contracts — (91) — 113 18 40
Embedded derivative financial instruments — (3) (28) 34 — 3
Foreign currency contracts — (10) — — (3) (13)
Credit default contracts — (8) — — — (8)
Other contracts — — — 3 — 3
Subtotal — (608) (28) 150 15 (471)
Total $ (139) $ (601) $ (28) $ 143 $ 15 $ (610)
150
Notes