| Accumulated Other Comprehensive Income (Loss) |
Accumulated Other Comprehensive Income (Loss) The changes in AOCI, net of tax, by component for the three and six months ended June 30, 2014 and 2013 are as follows: | | | | | | | | | | | | | | | | | | | | | | | | | Three months ended June 30, 2014 (U.S. dollars in thousands) | Unrealized Gains (Losses) on Investments (1) | | OTTI Losses Recognized in AOCI | | Foreign Currency Translation Adjustments | | Underfunded Pension Liability | | Cash Flow Hedge | | Total | Balance, beginning of period, net of tax | $ | 1,032,941 |
| | $ | (85,894 | ) | | $ | 10,661 |
| | $ | (13,270 | ) | | $ | 2,223 |
| | $ | 946,661 |
| OCI before reclassifications | 363,348 |
| | — |
| | (3,621 | ) | | (8 | ) | | — |
| | 359,719 |
| Amounts reclassified from AOCI | (74,337 | ) | | 1,640 |
| | — |
| | — |
| | 110 |
| | (72,587 | ) | Tax benefit (expense) | (20,774 | ) | | (4 | ) | | (5,981 | ) | | — |
| | — |
| | (26,759 | ) | Net current period OCI - net of tax | 268,237 |
| | 1,636 |
| | (9,602 | ) | | (8 | ) | | 110 |
| | 260,373 |
| Balance, end of period, net of tax | $ | 1,301,178 |
| | $ | (84,258 | ) | | $ | 1,059 |
| | $ | (13,278 | ) | | $ | 2,333 |
| | $ | 1,207,034 |
| | | | | | | | | | | | | Three months ended June 30, 2013 (U.S. dollars in thousands) | | | | | | | | | | | | Balance, beginning of period, net of tax | $ | 1,474,553 |
| | $ | (116,189 | ) | | $ | 65,480 |
| | $ | (20,506 | ) | | $ | 1,784 |
| | $ | 1,405,122 |
| OCI before reclassifications | (701,365 | ) | | — |
| | (25,524 | ) | | (91 | ) | | — |
| | (726,980 | ) | Amounts reclassified from AOCI | (55,408 | ) | | 14,440 |
| | — |
| | — |
| | 110 |
| | (40,858 | ) | Tax benefit (expense) | 71,671 |
| | (2 | ) | | 1,806 |
| | — |
| | — |
| | 73,475 |
| Net current period OCI - net of tax | (685,102 | ) | | 14,438 |
| | (23,718 | ) | | (91 | ) | | 110 |
| | (694,363 | ) | Balance, end of period, net of tax | $ | 789,451 |
| | $ | (101,751 | ) | | $ | 41,762 |
| | $ | (20,597 | ) | | $ | 1,894 |
| | $ | 710,759 |
| | | | | | | | | | | | | Six months ended June 30, 2014 (U.S. dollars in thousands) | | | | | | | | | | | | Balance, beginning of period, net of tax | $ | 822,432 |
| | $ | (89,190 | ) | | $ | 14,541 |
| | $ | (13,239 | ) | | $ | 2,113 |
| | $ | 736,657 |
| OCI before reclassifications | 628,599 |
| | — |
| | (9,521 | ) | | (39 | ) | | — |
| | 619,039 |
| Amounts reclassified from AOCI | (96,975 | ) | | 5,049 |
| | — |
| | — |
| | 220 |
| | (91,706 | ) | Tax benefit (expense) | (52,878 | ) | | (117 | ) | | (3,961 | ) | | — |
| | — |
| | (56,956 | ) | Net current period OCI - net of tax | 478,746 |
| | 4,932 |
| | (13,482 | ) | | (39 | ) | | 220 |
| | 470,377 |
| Balance, end of period, net of tax | $ | 1,301,178 |
| | $ | (84,258 | ) | | $ | 1,059 |
| | $ | (13,278 | ) | | $ | 2,333 |
| | $ | 1,207,034 |
| | | | | | | | | | | | | Six months ended June 30, 2013 (U.S. dollars in thousands) | | | | | | | | | | | | Balance, beginning of period, net of tax | $ | 1,591,210 |
| | $ | (121,371 | ) | | $ | 69,399 |
| | $ | (20,892 | ) | | $ | 1,674 |
| | $ | 1,520,020 |
| OCI before reclassifications | (789,054 | ) | | — |
| | (30,576 | ) | | 295 |
| | — |
| | (819,335 | ) | Amounts reclassified from AOCI | (97,102 | ) | | 19,625 |
| | — |
| | — |
| | 220 |
| | (77,257 | ) | Tax benefit (expense) | 84,397 |
| | (5 | ) | | 2,939 |
| | — |
| | — |
| | 87,331 |
| Net current period OCI - net of tax | (801,759 | ) | | 19,620 |
| | (27,637 | ) | | 295 |
| | 220 |
| | (809,261 | ) | Balance, end of period, net of tax | $ | 789,451 |
| | $ | (101,751 | ) | | $ | 41,762 |
| | $ | (20,597 | ) | | $ | 1,894 |
| | $ | 710,759 |
|
____________ | | (1) | Included in these amounts are the impact of Shadow Adjustments. During the year ended December 31, 2013, the initial impact of $44.7 million was recorded. During the six months ended June 30, 2014, additional impacts of $474.5 million were recorded, resulting in a total cumulative impact of shadow adjustments on future policy benefit reserves of $519.2 million at June 30, 2014. |
The reclassifications out of AOCI along with the associated income statement line items affected by component, and the total related tax (expense) benefit for the three and six months ended June 30, 2014 and 2013 are as follows: | | | | | | | | | | | | | | | | | | | Gross Amount Reclassified From AOCI | Details About AOCI Components (U.S. dollars in thousands) | Three months ended June 30, 2014 | | Three months ended June 30, 2013 | | Six months ended June 30, 2014 | | Six months ended June 30, 2013 | | Affected Line Item in the Statement of Income | Unrealized gains and losses on investments: | | | | | | | | | | | $ | (107,470 | ) | | $ | (56,969 | ) | | $ | (132,384 | ) | | $ | (102,391 | ) | | Net realized gains (losses) on investments sold | | 33,133 |
| | 1,561 |
| | 35,409 |
| | 5,289 |
| | OTTI on investments | | $ | (74,337 | ) | | $ | (55,408 | ) | | $ | (96,975 | ) | | $ | (97,102 | ) | | Total before tax | | 1,477 |
| | (3,560 | ) | | 1,930 |
| | (3,286 | ) | | Provision (benefit) for income tax | | $ | (72,860 | ) | | $ | (58,968 | ) | | $ | (95,045 | ) | | $ | (100,388 | ) | | Net of tax | OTTI losses recognized in OCI: | | | | | | | | | | | $ | 1,386 |
| | $ | 13,612 |
| | $ | 3,344 |
| | $ | 17,887 |
| | Net realized gains (losses) on investments sold | | 254 |
| | 828 |
| | 1,705 |
| | 1,738 |
| | OTTI on investments transferred to (from) OCI | | $ | 1,640 |
| | $ | 14,440 |
| | $ | 5,049 |
| | $ | 19,625 |
| | Total before tax | | (4 | ) | | (2 | ) | | (117 | ) | | (5 | ) | | Provision (benefit) for income tax | | $ | 1,636 |
| | $ | 14,438 |
| | $ | 4,932 |
| | $ | 19,620 |
| | Net of tax | Gains and losses on cash flow hedges: | | | | | | | | | | Interest rate contracts | $ | 110 |
| | $ | 110 |
| | $ | 220 |
| | $ | 220 |
| | Interest Expense | | — |
| | — |
| | — |
| | — |
| | Provision (benefit) for income tax | | $ | 110 |
| | $ | 110 |
| | $ | 220 |
| | $ | 220 |
| | Net of tax | | | | | | | | | | | Total reclassifications for the period, gross of tax | $ | (72,587 | ) | | $ | (40,858 | ) | | $ | (91,706 | ) | | $ | (77,257 | ) | | | Tax benefit (expense) | 1,473 |
| | (3,562 | ) | | 1,813 |
| | (3,291 | ) | | | Total reclassifications for the period, net of tax | $ | (71,114 | ) | | $ | (44,420 | ) | | $ | (89,893 | ) | | $ | (80,548 | ) | | |
|