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Accumulated Other Comprehensive (Loss) Income
 3 Months Ended
Mar. 31, 2016
Equity [Abstract]  
Accumulated Other Comprehensive (Loss) Income
Accumulated Other Comprehensive (Loss) Income

Shareholders’ equity includes certain items classified as accumulated other comprehensive (loss) income (“AOCI”) in the Consolidated Balance Sheets, including:
 
Unrealized gains (losses) on hedges relate to interest rate swaps to convert the line of credit’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 CTS has deferred income statement recognition of gains and losses until the hedged transaction occurs, at which time amounts are reclassified into earnings.  Further information related to CTS’ derivative financial instruments is included in Note 11 - Derivative Financial Instruments and Note 15 – 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 expense.  Further information related to CTS’ pension obligations is included in NOTE 5 – Retirement Plans.
 
Cumulative translation adjustment relates to our non-U.S. subsidiary companies that have designated a functional currency other than the U.S. dollar. CTS is 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 (loss) 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 month periods ended March 31, 2016, and March 29, 2015, were $231 and $1,688, respectively, which is included in other expense in the Condensed Consolidated Statement of Earnings.
















The components of accumulated other comprehensive (loss) income for the three months ended March 31, 2016, are as follows:
 
 
 
 
 
 
Gain (Loss)
 
 
 
As of
 
Gain (Loss)
 
reclassified
 
As of
 
December 31,
 
Recognized
 
from AOCI
 
March 31,

2015
 
in OCI
 
to income
 
2016
Changes in fair market value of hedges:
 
 
 
 
 
 
 
Gross
$
(768
)
 
$
242

 
$
231

 
$
(295
)
Income tax (benefit)
289

 
(91
)
 
(88
)
 
110

Net
(479
)
 
151

 
143

 
(185
)


 

 

 

Changes in unrealized pension cost:
 
 
 
 
 
 
 
Gross
(161,719
)
 
—

 
1,451

 
(160,268
)
Income tax (benefit)
64,361

 


 
(543
)
 
63,818

Net
(97,358
)
 
—

 
908

 
(96,450
)



 

 


 


Cumulative translation adjustment:
 

 
 
 
 

 
 

Gross
(1,279
)
 
(406
)
 
—

 
(1,685
)
Income tax (benefit)
111

 
(3
)
 
—

 
108

Net
(1,168
)
 
(409
)
 
—

 
(1,577
)
Total accumulated other comprehensive (loss) income
$
(99,005
)
 
$
(258
)
 
$
1,051

 
$
(98,212
)
 
The components of other comprehensive (loss) income for the three months ended March 29, 2015, are as follows:
 
 
 
 
 
Gain (Loss)
 
 
 
As of
 
Gain (Loss)
 
reclassified
 
As of
 
December 31,
 
Recognized
 
from AOCI
 
March 29,

2014
 
in OCI
 
to income
 
2015
Changes in fair market value of hedges:
 
 

 
 
 
 
Gross
$
(1,020
)
 
$
(327
)
 
$
190

 
$
(1,157
)
Income tax (benefit)
384

 
123

 
(72
)
 
435

Net
(636
)
 
(204
)
 
118

 
(722
)


 

 

 

Changes in unrealized pension cost:
 
 
 
 
 
 
 
Gross
(169,291
)
 
1,930

 
—

 
(167,361
)
Income tax (benefit)
65,124

 
(673
)
 
—

 
64,451

Net
(104,167
)
 
1,257

 
—

 
(102,910
)
Cumulative translation adjustment:
 

 
 
 
 

 
 

Gross
245

 
(736
)
 
—

 
(491
)
Income tax (benefit)
325

 
(367
)
 
—

 
(42
)
Net
570

 
(1,103
)
 
—

 
(533
)
Total accumulated other comprehensive (loss) income
$
(104,233
)
 
$
(50
)
 
$
118

 
$
(104,165
)