Via ODiSy March 22, 2012 PHILIPPINE STOCK EXCHANGE ... - BDO

- 82 -Reclassification of CLNs from AFS to Loans and Other ReceivablesUnrealized fair value losses in equity of CLNs linked to ROP bonds reclassified fromAFS to Loans and Other Receivables at reclassification dates amounted to P627 andP624 in the BDO Unibank Group and Parent Bank financial statements, respectively, in2008. The effective interest rates on reclassified investments range from 5.44% to12.54%, 1.64% to 12.55%, and 4.3% to 12.55% in the BDO Unibank Group financialstatements, in 2011, 2010 and 2009, respectively, and 5.44% to 12.54% in 2011 and2.78% to 12.55% in 2010 and 1.1% to 12.55% in 2009 in the Parent Bank financialstatements. Interest income recognized in profit or loss on reclassified securitiesamounted to P178 and P254 in 2011 and 2010, respectively, in the BDO UnibankGroup financial statements and P167 and P125 in 2011 and 2010, respectively, in theParent Bank financial statements.Additional unrealized fair value gain (losses) recognized in other comprehensive incomein the period following the reclassification had the CLNs not been reclassified to Loansand Other Receivables would have amounted to (P371), P444 and P643 in 2011, 2010and 2009, respectively, in the BDO Unibank Group financial statements and (P371),P469 and P623 in 2011, 2010 and 2009, respectively, in the Parent Bank financialstatements. Additional trading gain (loss) to be recognized in profit or loss had theembedded derivatives not been reclassified totaled to (P208), P152 and P1,597 in 2011,2010 and 2009, respectively, in the BDO Unibank Group financial statements and(P202), P148 and P1,274 in 2011, 2010 and 2009, respectively, in the Parent Bankfinancial statements.In 2011, the BDO Unibank Group unwound the outstanding CLDs and CLNs withcertain financial institutions amounting to P437 and P5,454, respectively. On the otherhand, the Parent Bank unwound the outstanding CLNs with certain financialinstitutions amounting to P5,009. The BDO Unibank Group and Parent Bankrecognized loss amounting to P13 and P7, respectively, in the unwinding of CLNs andis presented as part of the Trading gain – net under Other Operating Income in the2011 statement of income. Also, the unwinding of CLN by the Parent Bank resulted toreversal of net unrealized loss amounting to (P25) and is presented as part of Tradingnet under Other Operating Income in the 2011 statement of income.After the reclassification, amortization of unrealized fair value losses on outstandingCLDs and CLNs previously recognized directly in the statements of comprehensiveincome amounted to P157 and P82 in 2011 and 2010, respectively, for the BDOUnibank Group and P157 and P98 in 2011 and 2010, respectively, for the Parent Bank.