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Accumulated Other Comprehensive (Loss) Income
 6 Months Ended
Jun. 30, 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 Condensed 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)/gains for the three and six month periods ended June 30, 2016 were ($1,260) and ($1,491), respectively, and for the three and six month periods ended June 28, 2015 were $125 and ($1,563), respectively, which are included in other income/(expenses) in the Condensed Consolidated Statement of Earnings.














The components of accumulated other comprehensive (loss) income for the three months ended June 30, 2016, are as follows:
 
 
 
 
 
 
Gain (Loss)
 
 
 
As of
 
Gain (Loss)
 
reclassified
 
As of
 
March 31,
 
Recognized
 
from AOCI
 
June 30,

2016
 
in OCI
 
to income
 
2016
Changes in fair market value of hedges:
 
 
 
 
 
 
 
Gross
$
(295
)
 
$
(337
)
 
$
229

 
$
(403
)
Income tax expense (benefit)
110

 
127

 
(86
)
 
151

Net
(185
)
 
(210
)
 
143

 
(252
)


 

 

 

Changes in unrealized pension cost:
 
 
 
 
 
 
 
Gross
(160,268
)
 
—

 
1,505

 
(158,763
)
Income tax expense (benefit)
63,818

 
—

 
(558
)
 
63,260

Net
(96,450
)
 
—

 
947

 
(95,503
)



 

 


 


Cumulative translation adjustment:
 

 
 
 
 

 
 

Gross
(1,685
)
 
(310
)
 
—

 
(1,995
)
Income tax expense (benefit)
108

 
(7
)
 
—

 
101

Net
(1,577
)
 
(317
)
 
—

 
(1,894
)
Total accumulated other comprehensive (loss) income
$
(98,212
)
 
$
(527
)
 
$
1,090

 
$
(97,649
)
 
The components of accumulated other comprehensive (loss) income for the three months ended June 28, 2015, are as follows:
 
 
 
 
 
Gain (Loss)
 
 
 
As of
 
Gain (Loss)
 
reclassified
 
As of
 
March 29,
 
Recognized
 
from AOCI
 
June 28,

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

 
 
 
 
Gross
$
(1,157
)
 
$
(82
)
 
$
192

 
$
(1,047
)
Income tax expense (benefit)
435

 
31

 
(72
)
 
394

Net
(722
)
 
(51
)
 
120

 
(653
)


 

 

 

Changes in unrealized pension cost:
 
 
 
 
 
 
 
Gross
(167,361
)
 
1,199

 
—

 
(166,162
)
Income tax expense (benefit)
64,451

 
(494
)
 
—

 
63,957

Net
(102,910
)
 
705

 
—

 
(102,205
)
 
 
 
 
 
 
 
 
Cumulative translation adjustment:
 

 
 
 
 

 
 

Gross
(491
)
 
1,064

 
—

 
573

Income tax expense (benefit)
(42
)
 
427

 
—

 
385

Net
(533
)
 
1,491

 
—

 
958

Total accumulated other comprehensive (loss) income
$
(104,165
)
 
$
2,145

 
$
120

 
$
(101,900
)









The components of accumulated other comprehensive (loss) income for the six months ended June 30, 2016, are as follows:
 
 

 

Gain (Loss)

 
 
As of

Gain (Loss)

reclassified

As of
 
December 31,

Recognized

from AOCI

June 30,

2015

in OCI

to income

2016
Changes in fair market value of hedges:
 

 

 

 
Gross
$
(768
)

$
(95
)

$
460


$
(403
)
Income tax expense (benefit)
289


36


(174
)

151

Net
(479
)

(59
)

286


(252
)








Changes in unrealized pension cost:
 

 

 

 
Gross
(161,719
)

—


2,956


(158,763
)
Income tax expense (benefit)
64,361


—


(1,101
)

63,260

Net
(97,358
)

—


1,855


(95,503
)

 









Cumulative translation adjustment:



 

 


 

Gross
(1,279
)

(716
)

—


(1,995
)
Income tax expense (benefit)
111


(10
)

—


101

Net
(1,168
)

(726
)

—


(1,894
)
Total accumulated other comprehensive (loss) income
$
(99,005
)

$
(785
)

$
2,141


$
(97,649
)

The components of accumulated other comprehensive (loss) income for the six months ended June 28, 2015, are as follows:
 
 
 
 
 
Gain (Loss)
 
 
 
As of

Gain (Loss)

reclassified

As of
 
December 31,

Recognized

from AOCI

June 28,
 
2014

in OCI

to income

2015
Changes in fair market value of hedges:
 

 

 

 
Gross
$
(1,020
)

$
(409
)

$
382


$
(1,047
)
Income tax expense (benefit)
384


154


(144
)

394

Net
(636
)

(255
)

238


(653
)








Changes in unrealized pension cost:
 

 

 

 
Gross
(169,291
)

3,129


—


(166,162
)
Income tax expense (benefit)
65,124


(1,167
)

—


63,957

Net
(104,167
)

1,962


—


(102,205
)











Cumulative translation adjustment:
 


 


 


 

Gross
245


328


—


573

Income tax expense (benefit)
325


60


—


385

Net
$
570


$
388


$
—


$
958

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

$
2,095


$
238


$
(101,900
)