Capital One 2012 Annual Report Download - page 233

CAPITAL ONE FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Income Statement Presentation and AOCI
The following tables summarize the impact of derivatives and the related hedged items on our consolidated
statements of income and AOCI.
Fair Value Hedges and Free-Standing Derivatives
The net gains (losses) recognized in earnings related to derivatives in fair value hedging relationships and free-
standing derivatives are presented below for 2012, 2011 and 2010.
Year Ended December 31,
(Dollars in millions) 2012 2011 2010
Derivatives designated as accounting hedges:
Fair value interest rate contracts:
Gain (loss) recognized in earnings on derivatives(1) .......................... $1 $ 348 $ 338
Gain (loss) recognized in earnings on hedged items(1) ........................ (37) (333) (288)
Net fair value hedge ineffectiveness gain (loss) ................................. (36) 15 50
Derivatives not designated as accounting hedges:
Interest rate contracts covering:
MSRs(1) ............................................................ 44 (21)
Customer accommodation(1) ............................................ 39 23 25
Other interest rate exposures(1) .......................................... (60) (275)(2) 5
Total .......................................................... (17) (248) 9
Foreign exchange contracts(1) ........................................... (15) 30 4
Other contracts(1) .................................................... (4) 21 38
Total gain (loss) on derivatives not designated as accounting hedges ................ (36) (197) 51
Net derivatives gain (loss) recognized in earnings ............................... $(72) $(182) $ 101
(1) Amounts are recorded in our consolidated statements of income in other non-interest income.
(2) Includes $277 million in mark-to-market losses recorded during 2011 on interest-rate swap transactions related to the ING Direct
acquisition discussed above.
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