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Accumulated Other Comprehensive Loss
 6 Months Ended
Jun. 30, 2020
Equity [Abstract]  
Accumulated Other Comprehensive Loss

NOTE O. ACCUMULATED OTHER COMPREHENSIVE LOSS

The following tables reconcile changes in AOCL by component (net of tax, dollars in millions):

 

  

 

Three months ended

 

 

 

Pension

and OPEB

liability

adjustment

 

 

Available-

for-sale

securities

and interest

rate swaps

 

 

Foreign

currency

items

 

 

Total

 

AOCL as of March 31, 2019

 

$

15

 

 

$

(16

)

 

$

(32

)

 

$

(33

)

Other comprehensive (loss) income before reclassifications

 

 

—

 

 

 

(15

)

 

 

1

 

 

 

(14

)

Amounts reclassified from AOCL

 

 

(4

)

 

 

—

 

 

 

—

 

 

 

(4

)

Income tax

 

 

1

 

 

 

3

 

 

 

—

 

 

 

4

 

Net current period other comprehensive (loss) income

 

$

(3

)

 

$

(12

)

 

$

1

 

 

$

(14

)

AOCL as of June 30, 2019

 

$

12

 

 

$

(28

)

 

$

(31

)

 

$

(47

)

AOCL as of March 31, 2020

 

$

4

 

 

$

(49

)

 

$

(36

)

 

$

(81

)

Other comprehensive loss before reclassifications

 

 

—

 

 

 

(3

)

 

 

—

 

 

 

(3

)

Amounts reclassified from AOCL

 

 

(3

)

 

 

—

 

 

 

—

 

 

 

(3

)

Income tax

 

 

1

 

 

 

1

 

 

 

—

 

 

 

2

 

Net current period other comprehensive loss

 

$

(2

)

 

$

(2

)

 

$

—

 

 

$

(4

)

AOCL as of June 30, 2020

 

$

2

 

 

$

(51

)

 

$

(36

)

 

$

(85

)

 

 

 

 

Six months ended

 

 

 

Pension

and OPEB

liability

adjustment

 

 

Available-

for-sale

securities

and interest

rate swaps

 

 

Foreign

currency

items

 

 

Total

 

AOCL as of December 31, 2018

 

$

9

 

 

$

(7

)

 

$

(32

)

 

$

(30

)

Other comprehensive (loss) income before reclassifications

 

 

—

 

 

 

(25

)

 

 

1

 

 

 

(24

)

Amounts reclassified from AOCL

 

 

(7

)

 

 

—

 

 

 

—

 

 

 

(7

)

Income tax

 

 

2

 

 

 

5

 

 

 

—

 

 

 

7

 

Reclassification of stranded tax effects

 

 

8

 

 

 

(1

)

 

 

—

 

 

 

7

 

Net current period other comprehensive income (loss)

 

$

3

 

 

$

(21

)

 

$

1

 

 

$

(17

)

AOCL as of June 30, 2019

 

$

12

 

 

$

(28

)

 

$

(31

)

 

$

(47

)

AOCL as of December 31, 2019

 

$

8

 

 

$

(26

)

 

$

(34

)

 

$

(52

)

Other comprehensive loss before reclassifications

 

 

—

 

 

 

(32

)

 

 

(2

)

 

 

(34

)

Amounts reclassified from AOCL

 

 

(8

)

 

 

—

 

 

 

—

 

 

 

(8

)

Income tax

 

 

2

 

 

 

7

 

 

 

—

 

 

 

9

 

Net current period other comprehensive loss

 

$

(6

)

 

$

(25

)

 

$

(2

)

 

$

(33

)

AOCL as of June 30, 2020

 

$

2

 

 

$

(51

)

 

$

(36

)

 

$

(85

)

 

The Company reclassified approximately $7 million, as of January 1, 2019, from AOCL to retained earnings for the stranded tax effects resulting from the U.S. Tax Cuts and Jobs Act. This reclassification had zero net effect on total stockholders' equity. The Company utilizes the portfolio securities approach when releasing income tax effects from AOCL for its investment securities.

 

 

 

Amounts reclassified from AOCL

 

 

 

AOCL Components

 

Three months ended

June 30, 2020

 

 

Three months ended

June 30, 2019

 

 

Affected line item in the Condensed

Consolidated Statements of

Comprehensive Income

Amortization of benefit items:

 

 

 

 

 

 

 

 

 

 

Prior service cost

 

$

3

 

 

$

4

 

 

Other income, net

Total reclassifications, before tax

 

$

3

 

 

$

4

 

 

Income before income taxes

Income tax expense

 

 

(1

)

 

 

(1

)

 

Income tax expense

Total reclassifications, net of tax

 

$

2

 

 

$

3

 

 

 

 

 

 

Amounts reclassified from AOCL

 

 

 

AOCL Components

 

Six months ended

June 30, 2020

 

 

Six months ended

June 30, 2019

 

 

Affected line item in the Condensed

Consolidated Statements of

Comprehensive Income

Amortization of benefit items:

 

 

 

 

 

 

 

 

 

 

Prior service cost

 

$

8

 

 

$

7

 

 

Other income, net

Total reclassifications, before tax

 

$

8

 

 

$

7

 

 

Income before income taxes

Income tax expense

 

 

(2

)

 

 

(2

)

 

Income tax expense

Total reclassifications

 

$

6

 

 

$

5

 

 

Net of tax

 

Prior service cost and actuarial loss are included in the computation of the Company’s net periodic benefit cost. See NOTE M, “Employee Benefit Plans” for additional details.