Accumulated Other Comprehensive (Loss) Income

9 Months Ended

Sep. 30, 2020

Equity [Abstract]

Accumulated Other Comprehensive (Loss) Income

NOTE 13 – 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 a portion of our revolving credit facility's outstanding balance from a 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 gains for the three and nine months ended September 30, 2020 were $2,326 and $1,947, respectively and transaction losses for the three and nine months ended September 30, 2019 were $2,473 and $2,828, 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, 2020 are as follows:

							Loss
	As of			Gain (Loss)			Reclassified			As of
	June 30,			Recognized			from AOCI			September 30,
	2020			in OCI			to Earnings			2020
Changes in fair market value of hedges:
Gross	$	(4,239	)	$	525		$	656		$	(3,058	)
Income tax benefit (expense)		978			(122	)		(150	)		706
Net		(3,261	)		403			506			(2,352	)
Changes in unrealized pension cost:
Gross		(120,906	)		—			1,606			(119,300	)
Income tax benefit (expense)		33,278			—			(367	)		32,911
Net		(87,628	)		—			1,239			(86,389	)
Cumulative translation adjustment:
Gross		(2,266	)		99			—			(2,167	)
Income tax benefit		—			—			—			—
Net		(2,266	)		99			—			(2,167	)
Total accumulated other comprehensive (loss) income	$	(93,155	)	$	502		$	1,745		$	(90,908	)

The components of accumulated other comprehensive (loss) income for the three months ended September 30, 2019, are as follows:

							(Gain) Loss
	As of			Gain (Loss)			Reclassified			As of
	June 30,			Recognized			from AOCI			September 30,
	2019			in OCI			to Earnings			2019
Changes in fair market value of hedges:
Gross	$	1,036		$	(529	)	$	(426	)	$	81
Income tax (expense) benefit		(234	)		119			96			(19	)
Net		802			(410	)		(330	)		62
Changes in unrealized pension cost:
Gross		(129,810	)		—			1,313			(128,497	)
Income tax benefit (expense)		35,297			—			(296	)		35,001
Net		(94,513	)		—			1,017			(93,496	)
Cumulative translation adjustment:
Gross		(2,287	)		(89	)		—			(2,376	)
Income tax benefit (expense)		95			(3	)		—			92
Net		(2,192	)		(92	)		—			(2,284	)
Total accumulated other comprehensive (loss) income	$	(95,903	)	$	(502	)	$	687		$	(95,718	)

The components of accumulated other comprehensive (loss) income for the nine months ended September 30, 2020, are as follows:

							Loss
	As of			Loss			Reclassified			As of
	December 31,			Recognized			from AOCI			September 30,
	2019			in OCI			to Earnings			2020
Changes in fair market value of hedges:
Gross	$	659		$	(4,647	)		930		$	(3,058	)
Income tax (expense) benefit		(150	)		1,059			(203	)		706
Net		509			(3,588	)		727			(2,352	)
Changes in unrealized pension cost:
Gross		(124,140	)		—			4,840			(119,300	)
Income tax benefit (expense)		34,018			—			(1,107	)		32,911
Net		(90,122	)		—			3,733			(86,389	)
Cumulative translation adjustment:
Gross		(2,211	)		44			—			(2,167	)
Income tax benefit (expense)		98			(98	)		—			—
Net		(2,113	)		(54	)		—			(2,167	)
Total accumulated other comprehensive (loss) income	$	(91,726	)	$	(3,642	)	$	4,460		$	(90,908	)

The components of accumulated other comprehensive (loss) income for the nine months ended September 30, 2019, are as follows:

							Loss
	As of			Gain			Reclassified			As of
	December 31,			Recognized			from AOCI			September 30,
	2018			in OCI			to Earnings			2019
Changes in fair market value of hedges:
Gross	$	1,316		$	(181	)	$	(1,054	)	$	81
Income tax (expense) benefit		(298	)		41			238			(19	)
Net		1,018			(140	)		(816	)		62
Changes in unrealized pension cost:
Gross		(132,454	)		—			3,957			(128,497	)
Income tax benefit (expense)		35,893			—			(892	)		35,001
Net		(96,561	)		—			3,065			(93,496	)
Cumulative translation adjustment:
Gross		(2,291	)		(85	)		—			(2,376	)
Income tax benefit		95			(3	)		—			92
Net		(2,196	)		(88	)		—			(2,284	)
Total accumulated other comprehensive (loss) income	$	(97,739	)	$	(228	)	$	2,249		$	(95,718	)