Capital One 2013 Annual Report Download - page 227

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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 the years ended December 31, 2013, 2012 and 2011:
Table 10.3: Gains and Losses on Fair Value Hedges and Free-Standing Derivatives
Year Ended December 31,
(Dollars in millions) 2013 2012 2011
Derivatives designated as accounting hedges(1):
Fair value interest rate contracts:
Gains (losses) recognized in earnings on derivatives .......................... $(550) $ 1 $ 348
Gains (losses) recognized in earnings on hedged items ........................ 507 (37) (333)
Net fair value hedge ineffectiveness gains (losses) ................................ (43) (36) 15
Derivatives not designated as accounting hedges(1):
Interest rate contracts covering:
MSRs ............................................................... (12) 44
Customer accommodation ............................................... 49 39 23
Other interest rate exposures ............................................. (9) (60) (275)
Total interest rate contracts .......................................... 28 (17) (248)
Foreign exchange contracts .............................................. (5) (15) 30
Other contracts(2) ...................................................... (20) (4) 21
Total gains (losses) on derivatives not designated as accounting hedges ............... 3(36) (197)
Net derivative gains (losses) recognized in earnings .............................. $ (40) $(72) $(182)
(1) Amounts are recorded in our consolidated statements of income in other non-interest income.
(2) Includes derivative instruments used to hedge mortgage pipeline and certain free-standing derivatives.
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