Accumulated Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Sep. 30, 2018

Reconciliation of Transactions Affecting Accumulated Other Comprehensive Income (Loss) Included in Shareholders' Equity

Shareholders’ equity is affected by transactions and valuations of asset and liability positions that require adjustments to accumulated other comprehensive income (loss). The reconciliation of the transactions affecting accumulated other comprehensive income (loss) included in shareholders’ equity is as follows:


Three Months Ended September 30 (Dollars in Millions)	Unrealized Gains (Losses) on Investment Securities Available-For- Sale			Unrealized Gains (Losses) on Investment Securities Transferred From Available-For-Sale to Held-To- Maturity			Unrealized Gains (Losses) on Derivative Hedges			Unrealized Gains (Losses) on Retirement Plans			Foreign Currency Translation			Total
2018
Balance at beginning of period	$	(1,183	)	$	17		$	176		$	(1,244	)	$	(81	)	$	(2,315	)
Changes in unrealized gains and losses		(411	)		–			40			–			–			(371	)
Foreign currency translation adjustment (a)		–			–			–			–			7			7
Reclassification to earnings of realized gains and losses		(10	)		(2	)		(2	)		34			–			20
Applicable income taxes		107			–			(10	)		(9	)		(2	)		86
Balance at end of period	$	(1,497	)	$	15		$	204		$	(1,219	)	$	(76	)	$	(2,573	)
2017
Balance at beginning of period	$	(174	)	$	21		$	51		$	(1,077	)	$	(67	)	$	(1,246	)
Changes in unrealized gains and losses		24			–			(3	)		–			–			21
Foreign currency translation adjustment (a)		–			–			–			–			2			2
Reclassification to earnings of realized gains and losses		(9	)		(3	)		4			29			–			21
Applicable income taxes		(7	)		1			–			(11	)		–			(17	)
Balance at end of period	$	(166	)	$	19		$	52		$	(1,059	)	$	(65	)	$	(1,219	)

(a)

Represents the impact of changes in foreign currency exchange rates on the Company’s investment in foreign operations and related hedges.


Nine Months Ended September 30 (Dollars in Millions)	Unrealized Gains (Losses) on Investment Securities Available-For- Sale			Unrealized Gains (Losses) on Investment Securities Transferred From Available-For-Sale to Held-To- Maturity			Unrealized Gains (Losses) on Derivative Hedges			Unrealized Gains (Losses) on Retirement Plans			Foreign Currency Translation			Total
2018
Balance at beginning of period	$	(357	)	$	17		$	71		$	(1,066	)	$	(69	)	$	(1,404	)
Revaluation of tax related balances (a)		(77	)		4			15			(229	)		(13	)		(300	)
Changes in unrealized gains and losses		(1,399	)		–			159			(1	)		–			(1,241	)
Foreign currency translation adjustment (b)		–			–			–			–			12			12
Reclassification to earnings of realized gains and losses		(25	)		(7	)		(1	)		103			–			70
Applicable income taxes		361			1			(40	)		(26	)		(6	)		290
Balance at end of period	$	(1,497	)	$	15		$	204		$	(1,219	)	$	(76	)	$	(2,573	)
2017
Balance at beginning of period	$	(431	)	$	25		$	55		$	(1,113	)	$	(71	)	$	(1,535	)
Changes in unrealized gains and losses		479			–			(33	)		–			–			446
Foreign currency translation adjustment (b)		–			–			–			–			11			11
Reclassification to earnings of realized gains and losses		(47	)		(10	)		28			87			–			58
Applicable income taxes		(167	)		4			2			(33	)		(5	)		(199	)
Balance at end of period	$	(166	)	$	19		$	52		$	(1,059	)	$	(65	)	$	(1,219	)

(a)

Represents the impact of the reduced federal statutory tax rate for corporations included in 2017 tax reform legislation, reclassified out of accumulated other comprehensive income and into retained earnings as of the beginning of the period.

(b)

Represents the impact of changes in foreign currency exchange rates on the Company’s investment in foreign operations and related hedges.

Impact to Net Income for Items Reclassified out of Accumulated Other Comprehensive Income and into Earnings

Additional detail about the impact to net income for items reclassified out of accumulated other comprehensive income (loss) and into earnings is as follows:


	Impact to Net Income												Affected Line Item in the Consolidated Statement of Income
	Three Months Ended September 30						Nine Months Ended September 30
(Dollars in Millions)	2018			2017			2018			2017
Unrealized gains (losses) on investment securities available-for-sale
Realized gains (losses) on sale of investment securities	$	10		$	9		$	25		$	47		Total securities gains (losses), net
		(2	)		(4	)		(6	)		(18	)	Applicable income taxes
		8			5			19			29		Net-of-tax
Unrealized gains (losses) on investment securities transferred from available-for-sale to held-to-maturity
Amortization of unrealized gains		2			3			7			10		Interest income
		–			(1	)		(1	)		(4	)	Applicable income taxes
		2			2			6			6		Net-of-tax
Unrealized gains (losses) on derivative hedges
Realized gains (losses) on derivative hedges		2			(4	)		1			(28	)	Interest expense
		(1	)		2			(1	)		11		Applicable income taxes
		1			(2	)		–			(17	)	Net-of-tax
Unrealized gains (losses) on retirement plans
Actuarial gains (losses) and prior service cost (credit) amortization		(34	)		(29	)		(103	)		(87	)	Employee benefits expense
		8			11			26			33		Applicable income taxes
		(26	)		(18	)		(77	)		(54	)	Net-of-tax
Total impact to net income	$	(15	)	$	(13	)	$	(52	)	$	(36	)