Changes in Accumulated Other Comprehensive Income

12 Months Ended

Dec. 31, 2020

Changes in Accumulated Other Comprehensive Income

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME

AOCI is a balance sheet item in Shareholders’ equity on the Consolidated Balance Sheets. It is comprised of items that have not been recognized in earnings but may be recognized in earnings in the future when certain events occur. Changes in each component for the three years ended December 31 were as follows:


(Millions), net of tax	Net Unrealized Gains (Losses) on Debt Securities		Foreign Currency Translation Adjustment Gains (Losses)		Net Unrealized Pension and Other Postretirement Benefit Gains (Losses)		Accumulated Other Comprehensive (Loss) Income
Balances as of December 31, 2017	$	—	$	(1,961)	$	(467)	$	(2,428)
Net unrealized losses	(10)		—		—		(10)
Net translation on investments in foreign operations	—		(500)		—		(500)
Net hedges of investments in foreign operations	—		328		—		328
Pension and other postretirement benefits	—		—		11		11
Other	2		—		—		2
Net change in accumulated other comprehensive (loss) income	(8)		(172)		11		(169)
Balances as of December 31, 2018	(8)		(2,133)		(456)		(2,597)
Net unrealized gains	41		—		—		41
Net translation on investments in foreign operations	—		84		—		84
Net hedges of investments in foreign operations	—		(140)		—		(140)
Pension and other postretirement benefits	—		—		(125)		(125)
Net change in accumulated other comprehensive (loss) income	41		(56)		(125)		(140)
Balances as of December 31, 2019	33		(2,189)		(581)		(2,737)
Net unrealized gains	32		—		—		32
Amounts reclassified into earnings	—		(3)		—		(3)
Net translation on investments in foreign operations	—		215		—		215
Net hedges of investments in foreign operations	—		(252)		—		(252)
Pension and other postretirement benefits	—		—		(150)		(150)
Net change in accumulated other comprehensive (loss) income	32		(40)		(150)		(158)
Balances as of December 31, 2020	$	65	$	(2,229)	$	(731)	$	(2,895)

The following table shows the tax impact for the years ended December 31 for the changes in each component of AOCI presented above:


	Tax expense (benefit)
(Millions)	2020		2019		2018
Net unrealized investment securities	$	9	$	12	$	(2)
Net translation on investments in foreign operations	17		24		(44)
Net hedges of investments in foreign operations	(79)		(43)		107
Pension and other postretirement benefits	(28)		(38)		9
Total tax impact	$	(81)	$	(45)	$	70

The following table presents the effects of reclassifications out of AOCI and into the Consolidated Statements of Income associated with the sale or liquidation of a business, net of taxes for the years ended December 31:


		Gains (losses) recognized in earnings
Description (Millions)	Income Statement Line Item	2020		2019		2018
Foreign currency translation adjustments
Reclassification of translation adjustments and related hedges	Other expenses	$	3	$	—	$	1
Related income tax	Income tax provision	—		—		(1)
Reclassification of foreign currency translation adjustments		$	3	$	—	$	—