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Accumulated Other Comprehensive (Loss) Income
 3 Months Ended
Mar. 31, 2017
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 revolving credit facility'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 we have 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 income / (expense).  Further information related to our 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. We are 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 gains for the three months ended March 31, 2017 were $395 and transaction losses for the three months ended March 31, 2016 were $231, which have been included in other income (expense) in the Condensed Consolidated Statement of Earnings.

The components of accumulated other comprehensive (loss) income for the three months ended March 31, 2017, are as follows:

 
 
 
 
 
Gain (Loss)
 
 
 
As of
 
Gain (Loss)
 
Reclassified
 
As of
 
December 31,
 
Recognized
 
from AOCI
 
March 31,

2016
 
in OCI
 
to Income
 
2017
Changes in fair market value of hedges:
 
 
 
 
 
 
 
Gross
$
116

 
$
1,042

 
$
150

 
$
1,308

Income tax benefit
(42
)
 
(378
)
 
(54
)
 
(474
)
Net
74

 
664

 
96

 
834



 

 

 

Changes in unrealized pension cost:
 
 
 
 
 
 
 
Gross
(151,618
)
 
—

 
1,296

 
(150,322
)
Income tax expense (benefit)
60,672

 
—

 
(480
)
 
60,192

Net
(90,946
)
 
—

 
816

 
(90,130
)



 

 


 


Cumulative translation adjustment:
 

 
 
 
 

 
 

Gross
(2,414
)
 
86

 
—

 
(2,328
)
Income tax expense
92

 
2

 
—

 
94

Net
(2,322
)
 
88

 
—

 
(2,234
)
Total accumulated other comprehensive (loss) income
$
(93,194
)
 
$
752

 
$
912

 
$
(91,530
)
 
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 expense (benefit)
289

 
(91
)
 
(88
)
 
110

Net
(479
)
 
151

 
143

 
(185
)


 

 

 

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

 
1,451

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

 
—

 
(543
)
 
63,818

Net
(97,358
)
 
—

 
908

 
(96,450
)
 
 
 
 
 
 
 
 
Cumulative translation adjustment:
 

 
 
 
 

 
 

Gross
(1,279
)
 
(406
)
 
—

 
(1,685
)
Income tax expense (benefit)
111

 
(3
)
 
—

 
108

Net
(1,168
)
 
(409
)
 
—

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

 
$
(98,212
)