LILLY ELI & CO | 2013 | FY | 3

Note 17:    Other Comprehensive Income (Loss)
The following table summarizes the activity related to each component of other comprehensive income (loss):
(Amounts presented net of taxes)
Foreign Currency Translation Gains (Losses)
 
Unrealized Net Gains (Losses) on Securities
 
Defined Benefit Pension and Retiree Health Benefit Plans
 
Effective Portion of Cash Flow Hedges
 
Accumulated Other Comprehensive Loss
Beginning balance at January 1, 2011
$
510.7

 
$
128.9

 
$
(3,175.8
)
 
$
(133.9
)
 
$
(2,670.1
)
 
 
 
 
 
 
 
 
 
 
Unrealized gain (loss)
 
 
(59.4
)
 
 
 
32.6

 
 
Net amount reclassed to net income
 
 
(54.7
)
 
 
 
(5.8
)
 
 
Net other comprehensive income (loss)
(244.8
)
 
(114.1
)
 
(856.4
)
 
26.8

 
(1,188.5
)
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2011
265.9

 
14.8

 
(4,032.2
)
 
(107.1
)
 
(3,858.6
)
 
 
 
 
 
 
 
 
 
 
Unrealized gain (loss)
 
 
104.1

 
 
 
—

 
 
Net amount reclassed to net income
 
 
(46.4
)
 
 
 
5.9

 
 
Net other comprehensive income (loss)
160.9

 
57.7

 
(163.0
)
 
5.9

 
61.5

 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2012
426.8

 
72.5

 
(4,195.2
)
 
(101.2
)
 
(3,797.1
)
 
 
 
 
 
 
 
 
 
 
Other comprehensive income (loss) before reclassifications
36.2

 
138.9

 
1,387.1

 
(86.5
)
 
1,475.7

Net amount reclassified from accumulated other comprehensive loss
 
 
(6.2
)
 
319.0

 
5.9

 
318.7

Net other comprehensive income (loss)
36.2

 
132.7

 
1,706.1

 
(80.6
)
 
1,794.4

 
 
 
 
 
 
 
 
 
 
Ending Balance at December 31, 2013
$
463.0

 
$
205.2

 
$
(2,489.1
)
 
$
(181.8
)
 
$
(2,002.7
)

The tax effect on the unrealized net gains (losses) on securities was an expense of $71.6 million in 2013, an expense of $30.8 million in 2012, and a benefit of $64.4 million in 2011. The tax effect related to our defined benefit pension and retiree health benefit plans (Note 15) was an expense of $886.1 million in 2013, an expense of $34.4 million in 2012, and a benefit of $383.8 million in 2011. The tax effect on the effective portion of cash flow hedges was a benefit of $43.2 million for the year ended December 31, 2013, and was not significant for the years ended December 31, 2012 and 2011. Income taxes were not provided for foreign currency translation.
Generally, the assets and liabilities of foreign operations are translated into U.S. dollars using the current exchange rate. For those operations, changes in exchange rates generally do not affect cash flows; therefore, resulting translation adjustments are made in shareholders' equity rather than in income.
 
Reclassifications Out of Accumulated Other Comprehensive Loss
 
Details about Accumulated Other
Comprehensive Loss Components
Year Ended
Affected Line Item in the Consolidated Statements of Operations
December 31, 2013
Amortization of defined benefit items:
 
 
Prior service benefits, net
$
(31.9
)
(1) 
Actuarial losses
515.2

(1) 
Total before tax
483.3

 
Tax benefit
(164.3
)
 
Net of tax
319.0

 
 
 
 
Other, net of tax
(0.3
)
Other—net, (income) expense
Total reclassifications for the period (net of tax)
$
318.7

 

1
These accumulated other comprehensive loss components are included in the computation of net periodic pension cost (see Note 15).

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