Accumulated Other Comprehensive Income (Loss)

3 Months Ended

Mar. 31, 2025

Accumulated Other Comprehensive Income (Loss)

The following table summarizes changes in Accumulated other comprehensive income (loss) for the three months ended March 31, 2025 and 2024:


	Three Months Ended
	March 31,
In millions	2025		2024
Beginning balance	$	(1,877)	$	(1,834)

Foreign currency translation adjustments during the period	(47)		(28)

Income taxes	47		(23)
Total foreign currency translation adjustments, net of tax	—		(51)


Pension and other postretirement benefit adjustments reclassified to income	(1)		1
Income taxes	—		—
Total pension and other postretirement benefit adjustments, net of tax	(1)		1

Ending balance	$	(1,878)	$	(1,884)

Pension and other postretirement benefit adjustments reclassified to income related primarily to the amortization of actuarial gains and losses. Refer to Note 7. Pension and Other Postretirement Benefits for additional information.

The outstanding balances of the Euro notes issued in May 2014, May 2015, June 2019 and May 2024, and the term loan under the Euro Credit Agreement are designated as hedges of a portion of the Company’s net investment in Euro-denominated foreign operations to reduce foreign currency risk associated with the investment in these operations. Changes in the value of this debt resulting from fluctuations in the Euro to U.S. Dollar exchange rate have been recorded as foreign currency translation adjustments within Accumulated other comprehensive income (loss). The amount of pre-tax gain (loss) related to this debt recorded in Other comprehensive income (loss) was a loss of $196 million and a gain of $97 million for the three months ended March 31, 2025 and 2024, respectively. The carrying value of the outstanding balance of Euro-denominated debt that was designated as a net investment hedge as of March 31, 2025 and December 31, 2024 was $4.6 billion and $4.4 billion, respectively. Refer to Note 8. Debt for additional information regarding the Company’s outstanding Euro debt.

As of March 31, 2025 and 2024, the ending balance of Accumulated other comprehensive income (loss) consisted of after-tax cumulative translation adjustment losses of $1.6 billion in both periods, and after-tax unrecognized pension and other postretirement benefit costs of $267 million and $326 million, respectively.

ILLINOIS TOOL WORKS INC 10-Q