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Accumulated Other Comprehensive Income (Loss)
 9 Months Ended
Sep. 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

 

Nine Months Ended

 

 

September 30,

 

September 30,

(In millions)

 

2019

 

2018

 

2019

 

2018

Securities and Derivatives

 

 

 

 

 

 

 

 

Beginning balance

$

803

$

(50)

$

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

 

803

 

(50)

 

18

 

383

Appreciation (depreciation) on securities and derivatives

 

298

 

4

 

1,305

 

(567)

Tax (expense) benefit

 

(68)

 

(1)

 

(284)

 

115

Net appreciation (depreciation) on securities and derivatives

 

230

 

3

 

1,021

 

(452)

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

 

(10)

 

(1)

 

(17)

 

27

Tax (expense)

 

3

 

-

 

4

 

(6)

Net losses (gains) reclassified from AOCI to net income

 

(7)

 

(1)

 

(13)

 

21

Other comprehensive income (loss), net of tax

 

223

 

2

 

1,008

 

(431)

Ending balance

$

1,026

$

(48)

$

1,026

$

(48)

 

 

 

 

 

 

 

 

 

Translation of foreign currencies

 

 

 

 

 

 

 

 

Beginning balance

$

(285)

$

(176)

$

(221)

$

(65)

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

 

-

 

-

 

-

 

(4)

Adjusted beginning balance

 

(285)

 

(176)

 

(221)

 

(69)

Translation of foreign currencies

 

(125)

 

(31)

 

(188)

 

(136)

Tax (expense) benefit

 

(3)

 

2

 

(4)

 

-

Net translation of foreign currencies

 

(128)

 

(29)

 

(192)

 

(136)

Ending balance

$

(413)

$

(205)

$

(413)

$

(205)

 

 

 

 

 

 

 

 

 

Postretirement benefits liability

 

 

 

 

 

 

 

 

Beginning balance

$

(1,483)

$

(1,617)

$

(1,508)

$

(1,345)

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

 

-

 

-

 

-

 

(290)

Adjusted beginning balance

 

(1,483)

 

(1,617)

 

(1,508)

 

(1,635)

Reclassification adjustment for amortization of net losses from past experience and prior service costs (interest expense and other)

 

16

 

19

 

47

 

53

Reclassification adjustment for settlement (interest expense and other)

 

-

 

-

 

10

 

-

Tax benefit (expense)

 

(3)

 

(6)

 

(12)

 

(13)

Net adjustments reclassified from AOCI to net income

 

13

 

13

 

45

 

40

Valuation update

 

(1)

 

-

 

(9)

 

(12)

Tax (expense) benefit

 

-

 

-

 

1

 

3

Net change due to valuation update

 

(1)

 

-

 

(8)

 

(9)

Other comprehensive income, net of tax

 

12

 

13

 

37

 

31

Ending balance

$

(1,471)

$

(1,604)

$

(1,471)

$

(1,604)

 

 

 

 

 

 

 

 

 

(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.