Note 14: Other Comprehensive Income (Loss)
The changes in accumulated other comprehensive income (loss) by component and related tax effects in the first six months of 2017 were as follows:
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(In Millions) |
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Unrealized Holding Gains (Losses) on Available-for-Sale Investments |
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Unrealized Holding Gains (Losses) on Derivatives |
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Prior Service Credits (Costs) |
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Actuarial Gains (Losses) |
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Foreign Currency Translation Adjustment |
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Total |
December 31, 2016 |
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$ |
2,164 |
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$ |
(259 |
) |
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$ |
(40 |
) |
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$ |
(1,240 |
) |
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$ |
(519 |
) |
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$ |
106 |
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Other comprehensive income (loss) before reclassifications1
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1,059 |
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|
445 |
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— |
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217 |
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1 |
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1,722 |
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Amounts reclassified out of accumulated other comprehensive income |
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(1,046 |
) |
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16 |
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(12 |
) |
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40 |
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|
507 |
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(495 |
) |
Tax effects |
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(4 |
) |
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(130 |
) |
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2 |
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(27 |
) |
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— |
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(159 |
) |
Other comprehensive income (loss) |
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9 |
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331 |
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(10 |
) |
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230 |
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508 |
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1,068 |
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July 1, 2017 |
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$ |
2,173 |
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$ |
72 |
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$ |
(50 |
) |
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$ |
(1,010 |
) |
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$ |
(11 |
) |
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$ |
1,174 |
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1 |
In the second quarter of 2017, we froze future benefit accruals for our Ireland pension plan. |
The amounts reclassified out of accumulated other comprehensive income (loss) into the consolidated condensed statements of income for each period were as follows:
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Income Before Taxes Impact
(In Millions) |
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Three Months Ended |
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Six Months Ended |
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Comprehensive Income Components |
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Jul 1,
2017 |
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Jul 2,
2016 |
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Jul 1,
2017 |
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Jul 2,
2016 |
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Location |
Unrealized holding gains (losses)1 on available-for-sale investments:
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$ |
783 |
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$ |
403 |
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$ |
1,046 |
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$ |
488 |
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Gains (losses) on equity investments, net |
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|
783 |
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|
403 |
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1,046 |
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|
488 |
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Unrealized holding gains (losses) on derivatives: |
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Foreign currency contracts |
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(27 |
) |
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(17 |
) |
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(47 |
) |
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(59 |
) |
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Cost of sales |
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2 |
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7 |
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(14 |
) |
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(3 |
) |
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Research and development |
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(1 |
) |
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3 |
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(6 |
) |
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(1 |
) |
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Marketing, general and administrative |
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12 |
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11 |
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16 |
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11 |
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Gains (losses) on equity investments, net |
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(3 |
) |
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(17 |
) |
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35 |
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17 |
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Interest and other, net |
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(17 |
) |
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(13 |
) |
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(16 |
) |
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(35 |
) |
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Amortization of pension and postretirement benefit components: |
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Prior service credits (costs) |
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14 |
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(2 |
) |
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12 |
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(4 |
) |
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Actuarial gains (losses) |
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(18 |
) |
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(14 |
) |
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(40 |
) |
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(26 |
) |
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(4 |
) |
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(16 |
) |
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(28 |
) |
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(30 |
) |
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Currency translation adjustment |
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(507 |
) |
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— |
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(507 |
) |
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— |
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Interest and other, net |
Total amounts reclassified out of accumulated other comprehensive income (loss) |
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$ |
255 |
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$ |
374 |
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$ |
495 |
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$ |
423 |
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1 |
We determine the cost of the investment sold based on an average cost basis at the individual security level. |
The amortization of pension and postretirement benefit components are included in the computation of net periodic benefit cost. For further information, see "Note 18: Retirement Benefit Plans" in Part II, Item 8 of our 2016 Form 10-K.
We estimate that we will reclassify approximately $76 million (before taxes) of net derivative gains included in accumulated other comprehensive income (loss) into earnings within the next 12 months.
During the second quarter of 2017, we reclassified approximately $507 million (before taxes) of currency translation adjustment losses included in accumulated other comprehensive income (loss) into earnings as a result of our divestiture of ISecG. For more information see "Note 9: Acquisitions and Divestitures."
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