IBRC annual report for 2011 - Irish Bank Resolution Corporation ...

Irish Bank Resolution Corporation LimitedAnnual Report & Accounts 20118. Gain on liability management exercise 2011 2010€m €mGain on repurchases/restructurings under the Group's liabilitymanagement exercise ('LME') - 1,589During the prior year the Group repurchased or restructured certain subordinated liabilities as part of its ongoing capitalmanagement activities. €270m nominal of Tier 1, €45m of Upper Tier 2 and €1,575m of Lower Tier 2 securities wererepurchased, exchanged or restructured (note 42).The net LME gain of €1,589m resulted from consideration and fees paid of €309m extinguishing securities with a carrying valueof €1,898m. The gain included costs and fees incurred as part of the liability management exercise.9. Other operating income/(expense) 2011 2010€m €m(Decrease)/increase in value of assets designated at fair value held in respect ofliabilities to customers under investment contracts (3) 46Decrease/(increase) in value of liabilities designated at fair value held in respect ofliabilities to customers under investment contracts 3 (46)Net losses on disposal of available-for-sale financial assets (2) (110)Rental income 7 10Other 4 (4)9 (104)During the year a decrease in the value of Irish property investments held in respect of liabilities to customers under investmentcontracts has been largely offset by positive foreign exchange and fair value movements on UK property investments. Theincrease in the prior year was primarily attributable to increases in UK property values.The Group recognised losses of €2m (2010: €165m) on the disposal of asset backed securities and investments in banksubordinated debt during the year. The prior year losses were partially offset by gains of €55m on the sale of €1.5bn ofgovernment bonds.Other includes the net amount of operating income and expenses relating to the Group’s investment properties. Included in thenet amount are payroll and related expenses of €13m (2010: €10m) in respect of 275 (2010: 275) staff who are directlyemployed in the running of a US hotel, which is classified as a held for sale investment property (note 23), and which isindependently managed by an international hotel management group.61