Accumulated Other Comprehensive Income

12 Months Ended

Dec. 31, 2014

Equity [Abstract]

Accumulated Other Comprehensive Income

12. Accumulated Other Comprehensive Income

OCI refers to certain gains and losses that under GAAP are included in comprehensive income but are excluded from net earnings as these amounts are initially recorded as an adjustment to stockholders’ equity. Amounts in OCI may be reclassified to net earnings upon the occurrence of certain events.

Our OCI is comprised of foreign currency translation adjustments, unrealized gains and losses on cash flow hedges, unrealized gains and losses on available-for-sale securities, and amortization of prior service costs and unrecognized gains and losses in actuarial assumptions on our defined benefit plans. Foreign currency translation adjustments are reclassified to net earnings upon sale or upon a complete or substantially complete liquidation of an investment in a foreign entity. Unrealized gains and losses on cash flow hedges are reclassified to net earnings when the hedged item affects net earnings. Unrealized gains and losses on available-for-sale securities are reclassified to net earnings if we sell the security before maturity or if the unrealized loss is considered to be other-than-temporary. Amounts related to defined benefit plans that are in OCI are reclassified over the service periods of employees in the plan. The reclassification amounts are allocated to all employees in the plans and, therefore, the reclassified amounts may become part of inventory to the extent they are considered direct labor costs. See Note 14 for more information on our defined benefit plans.

The following table shows the changes in the components of OCI, net of tax (in millions):

	Foreign Currency Translation			Cash Flow Hedges			Unrealized Gains on Securities			Defined Benefit Plan Items
Balance December 31, 2013	$	401.1		$	33.1		$	0.5		$	(67.6	)
OCI before reclassifications		(241.5	)		55.9			(0.5	)		(80.0	)
Reclassifications		–			(18.9	)		(0.4	)		4.2
Balance December 31, 2014	$	159.6		$	70.1		$	(0.4	)	$	(143.4	)

The following table shows the reclassification adjustments from OCI (in millions):

	Amount of Gain / (Loss) Reclassified from OCI									Location on Statement of Earnings
	For the Years Ended December 31,
Component of OCI	2014			2013			2012
Cash flow hedges
Foreign exchange forward contracts	$	33.3		$	8.0		$	(12.0	)	Cost of products sold
Foreign exchange options		–			(0.2	)		(0.4	)	Cost of products sold
Cross-currency interest rate swaps		–			–			0.2		Interest expense
		33.3			7.8			(12.2	)	Total before tax
		14.4			3.4			(8.9	)	Provision for income taxes
	$	18.9		$	4.4		$	(3.3	)	Net of tax
Investments	$	0.4		$	–		$	–		Interest income
Realized gains on securities		–			–			–		Provision for income taxes
	$	0.4		$	–		$	–		Net of tax
Defined benefit plans
Prior service cost	$	3.9		$	3.9		$	2.9		*
Unrecognized actuarial (loss)		(11.1	)		(16.6	)		(13.3	)	*
		(7.2	)		(12.7	)		(10.4	)	Total before tax
		(3.0	)		(4.8	)		(3.9	)	Provision for income taxes
	$	(4.2	)	$	(7.9	)	$	(6.5	)	Net of tax
Total reclassifications	$	15.1		$	(3.5	)	$	(9.8	)	Net of tax

* These OCI components are included in the computation of net periodic pension expense (see Note 14).

The following table shows the tax effects on each component of OCI recognized in our consolidated statements of comprehensive income (in millions):

	Before Tax								Tax								Net of Tax
For the Years Ended December 31,	2014			2013			2012		2014			2013			2012		2014			2013			2012
Foreign currency cumulative translation adjustments	$	(241.5	)	$	(44.4	)	$	46.1	$	–		$	–		$	–	$	(241.5	)	$	(44.4	)	$	46.1
Unrealized cash flow hedge gains		60.5			63.6			15.2		4.6			30.2			4.3		55.9			33.4			10.9
Reclassification adjustments on foreign currency hedges		(33.3	)		(7.8	)		12.2		(14.4	)		(3.4	)		8.9		(18.9	)		(4.4	)		3.3
Reclassification adjustments on securities		(0.4	)		–			–		–			–			–		(0.4	)		–			–
Unrealized gains/(losses) on securities		(0.5	)		0.1			0.4		–			–			–		(0.5	)		0.1			0.4
Adjustments to prior service cost and unrecognized actuarial assumptions		(104.8	)		50.3			20.3		(29.0	)		11.8			8.5		(75.8	)		38.5			11.8
Total Other Comprehensive Gain/(Loss)	$	(320.0	)	$	61.8		$	94.2	$	(38.8	)	$	38.6		$	21.7	$	(281.2	)	$	23.2		$	72.5