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Accumulated Other Comprehensive Income (Loss)
 6 Months Ended
Jun. 30, 2019
Accumulated Other Comprehensive Income (Loss) [Abstract]  
Accumulated Other Comprehensive Income (Loss)

Note 12 – Accumulated Other Comprehensive Income (Loss) (“AOCI”)

 

AOCI includes the Company’s share from entities accounted for using the equity method. AOCI excludes amounts required to adjust future policy benefits for the run-off settlement annuity business and a portion of deferred acquisition costs associated with the corporate-owned life insurance business. Generally, tax effects in AOCI are established at the currently enacted tax rate and reclassified to net income in the same period that the related pre-tax AOCI reclassifications are recognized. Changes in the components of AOCI were as follows:

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

(In millions)

 

2019

 

2018

 

2019

 

2018

 

 

 

 

 

 

 

 

 

Securities and Derivatives

 

 

 

 

 

 

 

 

Beginning balance

$

460

$

99

$

18

$

328

Reclassification adjustment to retained earnings related to U.S. tax reform legislation (1)

 

-

 

-

 

-

 

65

Reclassification adjustment to retained earnings related to new financial instruments guidance (1)

 

-

 

-

 

-

 

(4)

Reclassification adjustment from retained earnings related to new hedging guidance (1)

 

-

 

-

 

-

 

(6)

Adjusted beginning balance

 

460

 

99

 

18

 

383

Appreciation (depreciation) on securities and derivatives

 

442

 

(186)

 

1,007

 

(571)

Tax (expense) benefit

 

(94)

 

39

 

(216)

 

116

Net appreciation (depreciation) on securities and derivatives

 

348

 

(147)

 

791

 

(455)

Reclassification adjustment for losses (gains) included in shareholders’ net income (net realized investment losses (gains))

 

(6)

 

(2)

 

(7)

 

28

Tax (expense) benefit

 

1

 

-

 

1

 

(6)

Net losses (gains) reclassified from AOCI to net income

 

(5)

 

(2)

 

(6)

 

22

Other comprehensive (loss), net of tax

 

343

 

(149)

 

785

 

(433)

Ending balance

$

803

$

(50)

$

803

$

(50)

 

 

 

 

 

 

 

 

 

Translation of foreign currencies

 

 

 

 

 

 

 

 

Beginning balance

$

(245)

$

(24)

$

(221)

$

(65)

Reclassification adjustment to retained earnings related to U.S. tax reform legislation (1)

 

-

 

-

 

-

 

(4)

Adjusted beginning balance

 

(245)

 

(24)

 

(221)

 

(69)

Translation of foreign currencies

 

(40)

 

(151)

 

(63)

 

(105)

Tax (expense)

 

-

 

(1)

 

(1)

 

(2)

Net translation of foreign currencies

 

(40)

 

(152)

 

(64)

 

(107)

Ending balance

$

(285)

$

(176)

$

(285)

$

(176)

 

 

 

 

 

 

 

 

 

Postretirement benefits liability

 

 

 

 

 

 

 

 

Beginning balance

$

(1,497)

$

(1,622)

$

(1,508)

$

(1,345)

Reclassification adjustment to retained earnings related to U.S. tax reform legislation (1)

 

-

 

-

 

-

 

(290)

Adjusted beginning balance

 

(1,497)

 

(1,622)

 

(1,508)

 

(1,635)

Reclassification adjustment for amortization of net losses from past experience and prior service costs (selling, general and administrative expenses)

 

16

 

17

 

31

 

34

Reclassification adjustment for settlement (selling, general and administrative expenses)

 

-

 

-

 

10

 

-

Tax benefit (expense)

 

5

 

(3)

 

(9)

 

(7)

Net adjustments reclassified from AOCI to net income

 

21

 

14

 

32

 

27

Valuation update

 

(8)

 

(12)

 

(8)

 

(12)

Tax (expense) benefit

 

1

 

3

 

1

 

3

Net change due to valuation update

 

(7)

 

(9)

 

(7)

 

(9)

Other comprehensive income, net of tax

 

14

 

5

 

25

 

18

Ending balance

$

(1,483)

$

(1,617)

$

(1,483)

$

(1,617)

 

 

 

 

 

 

 

 

 

(1) See Note 2 in Cigna’s 2018 Form 10-K for further information about the Company’s adoption of new accounting standards in 2018.