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Comprehensive Income
Accumulated other comprehensive loss in the Condensed Consolidated Balance Sheets includes foreign currency cumulative translation adjustments; prior service costs and credits and net actuarial gains and losses for defined benefit plans; and unrealized derivative gains and losses, all net of tax. Changes in the components of Accumulated other comprehensive loss, all net of tax, for the three months and nine months ended September 28, 2019 and September 29, 2018 were as follows:
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Three Months Ended |
|
Nine Months Ended |
(in millions) |
Sep 28, 2019 |
|
Sep 29, 2018 |
|
Sep 28, 2019 |
|
Sep 29, 2018 |
Net earnings (loss) |
$ |
(239.3 |
) |
|
$ |
70.0 |
|
|
$ |
(198.1 |
) |
|
$ |
221.9 |
|
Other comprehensive income (loss): |
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Foreign currency cumulative translation adjustment |
(13.4 |
) |
|
0.0 |
|
|
1.8 |
|
|
(9.7 |
) |
Net change in unamortized prior service credits |
3.5 |
|
|
(0.2 |
) |
|
3.2 |
|
|
(0.4 |
) |
Net change in unamortized actuarial losses |
299.2 |
|
|
2.0 |
|
|
303.9 |
|
|
6.2 |
|
Net change in unrealized derivative losses |
3.9 |
|
|
0.7 |
|
|
0.9 |
|
|
7.0 |
|
Total other comprehensive income (loss) |
293.2 |
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|
2.5 |
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|
309.8 |
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|
3.1 |
|
Comprehensive income |
$ |
53.9 |
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|
$ |
72.5 |
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$ |
111.7 |
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$ |
225.0 |
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The following table presents the changes in Accumulated other comprehensive loss by component, all net of tax, for the three months ended September 28, 2019:
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(in millions) |
Foreign currency translation |
|
Prior service credits |
|
Net actuarial losses |
|
Net derivative losses |
|
Total |
Beginning balance |
$ |
(33.7 |
) |
|
$ |
(6.4 |
) |
|
$ |
(301.5 |
) |
|
$ |
(4.9 |
) |
|
$ |
(346.5 |
) |
Other comprehensive income (loss) before reclassifications (A)
|
(13.4 |
) |
|
— |
|
|
(8.0 |
) |
|
5.7 |
|
|
(15.7 |
) |
Amounts reclassified from Accumulated other comprehensive loss (B)
|
— |
|
|
3.5 |
|
|
307.2 |
|
|
(1.8 |
) |
|
308.9 |
|
Net other comprehensive income (loss) |
(13.4 |
) |
|
3.5 |
|
|
299.2 |
|
|
3.9 |
|
|
293.2 |
|
Ending balance |
$ |
(47.1 |
) |
|
$ |
(2.9 |
) |
|
$ |
(2.3 |
) |
|
$ |
(1.0 |
) |
|
$ |
(53.3 |
) |
(A) The tax effects for the three months ended September 28, 2019 were $1.7 million for foreign currency translation, $2.7 million for net actuarial losses arising during the period and $(2.1) million for derivatives.
(B) See the table below for the tax effects for the three months ended September 28, 2019.
The following table presents the changes in Accumulated other comprehensive loss by component, all net of tax, for the nine months ended September 28, 2019:
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(in millions) |
Foreign currency translation |
|
Prior service credits |
|
Net actuarial losses |
|
Net derivative losses |
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Total |
Beginning balance |
$ |
(48.9 |
) |
|
$ |
(6.1 |
) |
|
$ |
(306.2 |
) |
|
$ |
(1.9 |
) |
|
$ |
(363.1 |
) |
Other comprehensive income (loss) before reclassifications (A)
|
(12.0 |
) |
|
— |
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|
(7.1 |
) |
|
6.3 |
|
|
(12.8 |
) |
Amounts reclassified from Accumulated other comprehensive loss (B)
|
13.8 |
|
|
3.2 |
|
|
311.0 |
|
|
(5.4 |
) |
|
322.6 |
|
Net other comprehensive income (loss) |
1.8 |
|
|
3.2 |
|
|
303.9 |
|
|
0.9 |
|
|
309.8 |
|
Ending balance |
$ |
(47.1 |
) |
|
$ |
(2.9 |
) |
|
$ |
(2.3 |
) |
|
$ |
(1.0 |
) |
|
$ |
(53.3 |
) |
(A) The tax effects for the nine months ended September 28, 2019 were $0.9 million for foreign currency translation, $2.6 million for net actuarial losses arising during the period and $(2.5) million for derivatives.
(B) See the table below for the tax effects for the nine months ended September 28, 2019.
The following table presents the changes in Accumulated other comprehensive loss by component, all net of tax, for the three months ended September 29, 2018:
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(in millions) |
Foreign currency translation |
|
Prior service credits |
|
Net actuarial losses |
|
Net derivative losses |
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Total |
Beginning balance |
$ |
(41.3 |
) |
|
$ |
(5.8 |
) |
|
$ |
(306.6 |
) |
|
$ |
(5.5 |
) |
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$ |
(359.2 |
) |
Other comprehensive income (loss) before reclassifications (A)
|
0.0 |
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|
— |
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|
0.2 |
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|
0.9 |
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|
1.1 |
|
Amounts reclassified from Accumulated other comprehensive loss (B)
|
— |
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|
(0.2 |
) |
|
1.8 |
|
|
(0.2 |
) |
|
1.4 |
|
Net other comprehensive income (loss) |
0.0 |
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|
(0.2 |
) |
|
2.0 |
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|
0.7 |
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|
2.5 |
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Ending balance |
$ |
(41.3 |
) |
|
$ |
(6.0 |
) |
|
$ |
(304.6 |
) |
|
$ |
(4.8 |
) |
|
$ |
(356.7 |
) |
(A) The tax effects for the three months ended September 29, 2018 were $(0.1) million for foreign currency translation, $0.1 million for net actuarial losses arising during the period and $(0.3) million for derivatives.
(B) See the table below for the tax effects for the three months ended September 29, 2018.
The following table presents the changes in Accumulated other comprehensive loss by component, all net of tax, for the nine months ended September 29, 2018:
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(in millions) |
Foreign currency translation |
|
Prior service credits |
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Net actuarial losses |
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Net derivative losses |
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Total |
Beginning balance |
$ |
(31.6 |
) |
|
$ |
(5.6 |
) |
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$ |
(310.8 |
) |
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$ |
(11.8 |
) |
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$ |
(359.8 |
) |
Other comprehensive income (loss) before reclassifications (A)
|
(9.7 |
) |
|
— |
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|
0.6 |
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|
3.6 |
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|
(5.5 |
) |
Amounts reclassified from Accumulated other comprehensive loss (B)
|
— |
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|
(0.4 |
) |
|
5.6 |
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3.4 |
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|
8.6 |
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Net other comprehensive income (loss) |
(9.7 |
) |
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(0.4 |
) |
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6.2 |
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|
7.0 |
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|
3.1 |
|
Ending balance |
$ |
(41.3 |
) |
|
$ |
(6.0 |
) |
|
$ |
(304.6 |
) |
|
$ |
(4.8 |
) |
|
$ |
(356.7 |
) |
(A) The tax effects for the nine months ended September 29, 2018 were $2.2 million for foreign currency translation, $0.0 million for net actuarial losses arising during the period and $(1.8) million for derivatives.
(B) See the table below for the tax effects for the nine months ended September 29, 2018.
The following table presents reclassification adjustments out of Accumulated other comprehensive loss during the three months and nine months ended September 28, 2019 and September 29, 2018:
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Three Months Ended |
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Nine Months Ended |
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Details about Accumulated other comprehensive income (loss) components (in millions) |
|
Sep 28,
2019 |
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Sep 29,
2018 |
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Sep 28,
2019 |
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Sep 29,
2018 |
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Affected line item in the statement where net income is presented |
Amount of loss reclassified into earnings on foreign currency: |
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Foreign currency cumulative translation adjustment |
|
$ |
— |
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|
$ |
— |
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$ |
(13.9 |
) |
|
$ |
— |
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Net earnings (loss) from discontinued operations, net of tax
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|
— |
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— |
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(13.9 |
) |
|
— |
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Net earnings (loss) from discontinued operations, net of tax
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|
— |
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— |
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0.1 |
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— |
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Net earnings (loss) from discontinued operations, net of tax
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$ |
— |
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$ |
— |
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$ |
(13.8 |
) |
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$ |
— |
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Net earnings (loss) from discontinued operations, net of tax
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Amortization of defined benefit items: |
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Prior service credits |
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$ |
0.1 |
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$ |
0.2 |
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$ |
0.5 |
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$ |
0.5 |
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Other income (expense), net |
Net actuarial losses |
|
(0.6 |
) |
|
(2.6 |
) |
|
(5.7 |
) |
|
(7.7 |
) |
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Other income (expense), net |
Net actuarial losses |
|
(294.1 |
) |
|
— |
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|
(294.1 |
) |
|
— |
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|
Pension settlement charge (A)
|
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|
(294.6 |
) |
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(2.4 |
) |
|
(299.3 |
) |
|
(7.2 |
) |
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Earnings (loss) before income taxes |
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|
(16.1 |
) |
|
0.8 |
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|
(14.9 |
) |
|
2.0 |
|
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Income tax provision (A)
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|
$ |
(310.7 |
) |
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$ |
(1.6 |
) |
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$ |
(314.2 |
) |
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$ |
(5.2 |
) |
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Net earnings (loss) from continuing operations (A)
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Amount of gain (loss) reclassified into earnings on derivative contracts: |
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Interest rate contracts |
|
$ |
(0.1 |
) |
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$ |
(0.2 |
) |
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$ |
(0.4 |
) |
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$ |
(0.7 |
) |
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Interest expense |
Foreign exchange contracts |
|
2.6 |
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|
0.7 |
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|
8.0 |
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|
(3.8 |
) |
|
Cost of sales |
|
|
2.5 |
|
|
0.5 |
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|
7.6 |
|
|
(4.5 |
) |
|
Earnings (loss) before income taxes |
|
|
(0.7 |
) |
|
(0.3 |
) |
|
(2.2 |
) |
|
1.1 |
|
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Income tax provision |
|
|
$ |
1.8 |
|
|
$ |
0.2 |
|
|
$ |
5.4 |
|
|
$ |
(3.4 |
) |
|
Net earnings (loss) from continuing operations |
(A) In the third quarter of 2019, the Company fully exited its qualified defined benefit pension plans and as a result, recorded a pre-tax settlement charge of $294.1 million. The income tax impact of the settlement action was a net provision of $17.2 million, consisting of an income tax benefit of $74.2 million associated with the pension settlement charge netted against an income tax charge of $91.4 million resulting from the release of disproportionate tax effects in Accumulated Other Comprehensive Income.
Refer to Note 14 – Postretirement Benefits and Note 13 – Income Taxes in the Notes to Condensed Consolidated Financial Statements for further information on the pension settlement and related income tax consequences, respectively.
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