8. Accumulated Other Comprehensive Income

Accumulated other comprehensive income (“AOCI”) 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 AOCI may be reclassified to net earnings upon the occurrence of certain events.

Our AOCI 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 AOCI 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 12 for more information on our defined benefit plans.

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

	Foreign			Cash			Unrealized			Defined
	Currency			Flow			(Losses) Gains on			Benefit
	Translation			Hedges			Securities			Plan Items
Balance at December 31, 2016	$	(323.4	)	$	32.3		$	(0.1	)	$	(142.8	)
AOCI before reclassifications		238.2			(51.1	)		-			(7.4	)
Reclassifications		-			(13.5	)		-			3.4
Balance at June 30, 2017	$	(85.2	)	$	(32.3	)	$	(0.1	)	$	(146.8	)

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

	Amount of Gain (Loss)
	Reclassified from AOCI
	Three Months Ended						Six Months Ended
	June 30,						June 30,						Location on
Component of AOCI	2017			2016			2017			2016			Statement of Earnings
Cash flow hedges
Foreign exchange forward contracts	$	5.9		$	26.3		$	17.0		$	58.4		Cost of products sold
Forward starting interest rate swaps		(0.2	)		(0.5	)		(0.3	)		(0.9	)	Interest expense
		5.7			25.8			16.7			57.5		Total before tax
		1.2			6.1			3.2			13.4		Provision for income taxes
	$	4.5		$	19.7		$	13.5		$	44.1		Net of tax
Defined benefit plans
Prior service cost	$	2.5		$	2.0		$	5.1		$	3.9		*
Unrecognized actuarial (loss)		(5.2	)		(5.0	)		(10.8	)		(10.0	)	*
		(2.7	)		(3.0	)		(5.7	)		(6.1	)	Total before tax
		(1.1	)		(1.2	)		(2.3	)		(2.3	)	Benefit for income taxes
	$	(1.6	)	$	(1.8	)	$	(3.4	)	$	(3.8	)	Net of tax
Total reclassifications	$	2.9		$	17.9		$	10.1		$	40.3		Net of tax

*	These AOCI components are included in the computation of net periodic pension expense (see Note 12).

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

	Three Months Ended June 30, 2017									Six Months Ended June 30, 2017
	Before Tax			Tax			Net of Tax			Before Tax			Tax			Net of Tax
Foreign currency cumulative translation adjustments	$	215.3		$	26.1		$	189.2		$	269.7		$	31.5		$	238.2
Unrealized cash flow hedge (losses)		(26.5	)		(1.7	)		(24.8	)		(63.1	)		(12.0	)		(51.1	)
Reclassification adjustments on cash flow hedges		(5.7	)		(1.2	)		(4.5	)		(16.7	)		(3.2	)		(13.5	)
Adjustments to prior service cost and unrecognized actuarial assumptions		0.2			0.7			(0.5	)		(3.5	)		0.5			(4.0	)
Total Other Comprehensive Income	$	183.3		$	23.9		$	159.4		$	186.4		$	16.8		$	169.6

	Three Months Ended June 30, 2016									Six Months Ended June 30, 2016
	Before Tax			Tax			Net of Tax			Before Tax			Tax			Net of Tax
Foreign currency cumulative translation adjustments	$	(78.6	)	$	-		$	(78.6	)	$	55.6		$	-		$	55.6
Unrealized cash flow hedge (losses) gains		(8.3	)		(9.1	)		0.8			(64.8	)		(21.5	)		(43.3	)
Reclassification adjustments on cash flow hedges		(25.8	)		(6.1	)		(19.7	)		(57.5	)		(13.4	)		(44.1	)
Unrealized gains on securities		-			-			-			0.4			-			0.4
Adjustments to prior service cost and unrecognized actuarial assumptions		2.0			0.9			1.1			23.4			2.3			21.1
Total Other Comprehensive Loss	$	(110.7	)	$	(14.3	)	$	(96.4	)	$	(42.9	)	$	(32.6	)	$	(10.3	)