Accumulated Other Comprehensive (Loss) Income

Shareholders’ equity includes certain items classified as accumulated other comprehensive (loss) income (“AOCI”) in the Condensed Consolidated Balance Sheets, including:

Unrealized gains (losses) on hedges relate to interest rate swaps to convert the revolving credit facility's variable rate of interest into a fixed rate and foreign currency forward contracts used to hedge our exposure to changes in exchange rates affecting certain revenues and costs denominated in foreign currencies. These hedges are designated as cash flow hedges, and we have deferred income statement recognition of gains and losses until the hedged transactions occur, at which time amounts are reclassified into earnings. Further information related to our derivative financial instruments is included in Note 12 - Derivative Financial Instruments and Note 16 – Fair Value Measurements.

Unrealized gains (losses) on pension obligations are deferred from income statement recognition until the gains or losses are realized. Amounts reclassified to income from AOCI are included in net periodic pension income / (expense). Further information related to our pension obligations is included in Note 6 – Retirement Plans.

Cumulative translation adjustments relate to our non-U.S. subsidiary companies that have designated a functional currency other than the U.S. dollar. We are required to translate the subsidiary functional currency financial statements to dollars using a combination of historical, period-end, and average foreign exchange rates. This combination of rates creates the foreign currency translation adjustment component of other comprehensive income.

Changes in exchange rates between the functional currency and the currency in which a transaction is denominated are foreign exchange transaction gains or losses. Transaction losses for the three and nine months ended September 30, 2018 were $1,740 and $2,658, respectively and transaction gains for the three and nine months ended September 30, 2017 were $960 and $2,517, respectively, which have been included in other income (expense) in the Condensed Consolidated Statement of Earnings.

The components of accumulated other comprehensive (loss) income for the three months ended September 30, 2018, are as follows:



							Gain (Loss)
	As of			Gain (Loss)			Reclassified			As of
	June 30,			Recognized			from AOCI			September 30,
	2018			in OCI			to Income			2018
Changes in fair market value of hedges:
Gross	$	1,418		$	1,023		$	(217	)	$	2,224
Income tax (expense) benefit	(360		)	(231		)	49			(542		)
Net	1,058			792			(168		)	1,682

Changes in unrealized pension cost:
Gross	(127,055		)	—			1,491			(125,564		)
Income tax benefit (expense)	52,152			—			(334		)	51,818
Net	(74,903		)	—			1,157			(73,746		)

Cumulative translation adjustment:
Gross	(2,115		)	1			—			(2,114		)
Income tax benefit	98			—			—			98
Net	(2,017		)	1			—			(2,016		)
Total accumulated other comprehensive (loss) income	$	(75,862	)	$	793		$	989		$	(74,080	)

The components of accumulated other comprehensive (loss) income for the three months ended September 30, 2017, are as follows:



							Gain (Loss)
	As of			Gain (Loss)			Reclassified			As of
	June 30,			Recognized			from AOCI			September 30,
	2017			in OCI			to Income			2017
Changes in fair market value of hedges:
Gross	$	1,070		$	37		$	(108	)	$	999
Income tax (expense) benefit	(388		)	(14		)	40			(362		)
Net	682			23			(68		)	637

Changes in unrealized pension cost:
Gross	(148,856		)	—			1,458			(147,398		)
Income tax benefit (expense)	59,668			—			(522		)	59,146
Net	(89,188		)	—			936			(88,252		)

Cumulative translation adjustment:
Gross	(2,132		)	161			—			(1,971		)
Income tax benefit	98			3			—			101
Net	(2,034		)	164			—			(1,870		)
Total accumulated other comprehensive (loss) income	$	(90,540	)	$	187		$	868		$	(89,485	)

The components of accumulated other comprehensive (loss) income for the nine months ended September 30, 2018, are as follows:



							Gain (Loss)
	As of			Gain (Loss)			Reclassified			As of
	December 31,			Recognized			from AOCI			September 30,
	2017			in OCI			to Income			2018
Changes in fair market value of hedges:
Gross	$	289		$	2,420		$	(485	)	$	2,224
Income tax (expense) benefit	(105		)	(547		)	110			(542		)
Net	184			1,873			(375		)	1,682

Changes in unrealized pension cost:
Gross	(130,096		)	—			4,532			(125,564		)
Income tax benefit (expense)	52,837			—			(1,019		)	51,818
Net	(77,259		)	—			3,513			(73,746		)

Cumulative translation adjustment:
Gross	(1,985		)	(129		)	—			(2,114		)
Income tax benefit (expense)	100			(2		)	—			98
Net	(1,885		)	(131		)	—			(2,016		)
Total accumulated other comprehensive (loss) income	$	(78,960	)	$	1,742		$	3,138		$	(74,080	)

The components of accumulated other comprehensive (loss) income for the nine months ended September 30, 2017, are as follows:



							Gain (Loss)
	As of			Gain (Loss)			Reclassified			As of
	December 31,			Recognized			from AOCI			September 30,
	2016			in OCI			to Income			2017
Changes in fair market value of hedges:
Gross	$	116		$	856		$	27		$	999
Income tax expense	(42		)	(311		)	(9		)	(362		)
Net	74			545			18			637

Changes in unrealized pension cost:
Gross	(151,618		)	—			4,220			(147,398		)
Income tax benefit (expense)	60,672			—			(1,526		)	59,146
Net	(90,946		)	—			2,694			(88,252		)

Cumulative translation adjustment:
Gross	(2,414		)	443			—			(1,971		)
Income tax benefit	92			9			—			101
Net	(2,322		)	452			—			(1,870		)
Total accumulated other comprehensive (loss) income	$	(93,194	)	$	997		$	2,712		$	(89,485	)