Accumulated Other Comprehensive (Loss) Income

12 Months Ended

Dec. 31, 2023

Accumulated Other Comprehensive (Loss) Income

Stockholders’ equity includes certain items classified as AOCI, including:

•Unrealized (loss) gain on anticipated sales hedging transactions relates to derivative instruments used to hedge the exposure related to currency exchange rates for forecasted Euro sales. These hedges are designated as cash flow hedges, and the Company defers income statement recognition of gains and losses until the hedged transaction occurs. See Note 11, Derivative Instruments for more details.

•Foreign currency translation adjustments relate to the Company’s non-U.S. subsidiary companies that have designated a functional currency other than the U.S. Dollar. The Company translates the subsidiary functional currency financial statements to U.S. 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 AOCI.

The changes in each component of AOCI during the three years ended December 31, 2023, 2022 and 2021 were as follows (in millions):


	Unrealized (loss) gain on sales hedging		Foreign currency translation adjustments		Total
Balance at December 31, 2020	$	(28)	$	(41)	$	(69)
Other comprehensive income (loss) before reclassifications	55		(6)		49
Amounts reclassified from AOCI(1)	2		—		2
Tax effect	(11)		—		(11)
Other comprehensive income (loss), net of tax	46		(6)		40
Balance at December 31, 2021	18		(47)		(29)
Other comprehensive income (loss) before reclassifications	50		(8)		42
Amounts reclassified from AOCI(1)	(87)		—		(87)
Tax effect	8		—		8
Other comprehensive (loss), net of tax	(29)		(8)		(37)
Balance at December 31, 2022	(11)		(55)		(66)
Other comprehensive (loss) income before reclassifications	(7)		6		(1)
Amounts reclassified from AOCI(1)	15		—		15
Tax effect	(2)		—		(2)
Other comprehensive income, net of tax	6		6		12
Balance at December 31, 2023	$	(5)	$	(49)	$	(54)

(1) See Note 11, Derivative Instruments regarding timing of reclassifications to operating results.