Discover 2015 Annual Report Download - page 165

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-149-
The following tables summarize the impact of the derivative instruments on income and OCI, and indicates where
within the consolidated financial statements such impact is reported (dollars in millions):
Amount of (Loss) Gain Recognized in OCI
For the Years Ended December 31,
Location 2015 2014 2013
Derivatives designated as hedges
Interest rate swaps—cash flow/net investment hedges
Total (loss) gain recognized in OCI after amounts reclassified into
earnings, pre-tax ............................................................................ OCI $ (22) $ (27) $ 13
Total (loss) gain recognized in OCI ............................................ $ (22) $ (27) $ 13
Amount of Gain (Loss) Recognized in Income
For the Years Ended December 31,
Location 2015 2014 2013
Derivatives designated as hedges
Interest rate swaps—cash flow hedges
Amount reclassified from OCI into income .......................................... Interest Income $ — $ — $ 4
Amount reclassified from OCI into income .......................................... Interest Expense (46) (38)(12)
Total amount reclassified from OCI into income ............................... (46) (38) (8)
Interest rate swaps—fair value hedges
Adjustments—ineffectiveness ............................................................. (11) (13)(46)
Adjustments—other .......................................................................... 32 38 41
Gain (loss) on interest rate swaps ................................................... Interest Expense 21 25 (5)
Adjustments—ineffectiveness ............................................................. 17 19 51
Adjustments—other .......................................................................... (6) (2) (6)
Gain on hedged item .................................................................... Interest Expense 11 17 45
Total (loss) gain on derivatives designated as hedges recognized
in income ............................................................................... $ (14) $ 4 $ 32
Derivatives not designated as hedges
Gain (loss) on forward contracts ........................................................ Other Income $ 2 $ 5 $ (1)
Loss on interest rate swaps ................................................................ Other Income — (1) (1)
Gain (loss) on forward delivery contracts ............................................ Other Income 2 (6) 4
Gain on interest rate lock commitments ............................................... Other Income 71 87 121
Total gains on derivatives not designated as hedges recognized in
income .................................................................................. $ 75 $ 85 $ 123
Collateral Requirements and Credit-Risk Related Contingency Features
The Company has master netting arrangements and minimum collateral posting thresholds with its counterparties
for its fair value and cash flow hedge interest rate swaps, foreign exchange forward contracts and forward delivery
contracts. The Company has not sought a legal opinion in relation to the enforceability of its master netting
arrangements and, as such, does not report any of these positions on a net basis. Collateral is required by either the
Company or its subsidiaries or the counterparty depending on the net fair value position of these derivatives held with
that counterparty. The Company may also be required to post collateral with a counterparty for its fair value and cash
flow hedge interest rate swaps depending on the credit rating it or Discover Bank receives from specified major credit