Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

Earnings Before Income Taxes

Earnings before income taxes from continuing operations consist of the following for the years ended December 31:

($ in thousands)	2013			2012			2011
Domestic	$	(5,396	)	$	(6,184	)	$	(3,773	)
Non-U.S.		23,459			20,628			16,089
Total	$	18,063		$	14,444		$	12,316

Significant Components of Income Tax Provision/(Benefit)

Significant components of income tax provision/(benefit) from continuing operations are as follows for the years ended December 31:

($ in thousands)	2013		2012			2011
Current:
Federal	$	661	$	39		$	100
State		671		534			385
Non-U.S.		4,804		5,839			3,572
Total Current		6,136		6,412			4,057
Deferred:
Federal		7,091		(1,423	)		(119	)
State		877		(350	)		(815	)
Non-U.S.		1,962		(3,687	)		(2,070	)
Total Deferred		9,930		(5,460	)		(3,004	)
Total provision for Income Taxes	$	16,066	$	952		$	1,053

Significant Components of Deferred Tax Assets and Liabilities

Significant components of the CTS’ deferred tax assets and liabilities at December 31 are:

($ in thousands)	2013			2012
Postretirement benefits	$	1,877		$	2,283
Inventory reserves		1,934			3,919
Loss carry-forwards		36,373			46,944
Credit carry-forwards		15,028			14,092
Nondeductible accruals		6,126			7,900
Research expenditures		28,606			26,475
Prepaid charges		727			4,280
Pensions		—			3,512
Other		5,476			7,974
Gross deferred tax assets		96,147			117,379
Depreciation		11,168			12,313
Pensions		19,177			—
Unrealized foreign exchange gain		350			1,103
Subsidiaries’ unremitted earnings		2,774			—
Other		696			933
Gross deferred tax liabilities		34,165			14,349
Net deferred tax assets		61,982			103,030
Deferred tax asset valuation allowance		(14,323	)		(13,087	)
Total net deferred tax assets	$	47,659		$	89,943

Reconciliation of Effective Income Taxes Rate

The following table reconciles taxes at the United States statutory rate to the effective income tax rate from continuing operations for the years ended December 31:

	2013			2012			2011
Taxes at the U.S. statutory rate		35.00	%		35.00	%		35.00	%
State income taxes, net of federal income tax benefit		0.95	%		(0.02	)%		(3.00	)%
Non-U.S. income taxed at rates different than the U.S. statutory rate		(9.86	)%		(8.99	)%		(20.11	)%
Benefit of scheduled tax credits		(3.88	)%		—	%		(4.38	)%
Foreign source income		60.94	%		5.64	%		—	%
Non-deductible expenses		(2.42	)%		(0.97	)%		(1.32	)%
Non-U.S. adjustments to valuation allowances		8.18	%		(5.72	)%		(1.03	)%
Nontaxable foreign gain		—	%		(11.47	)%		—	%
Change in unrecognized tax benefits		0.69	%		(8.97	)%		5.63	%
Other		(0.65	)%		2.09	%		(2.27	)%
Effective income tax rate		88.95	%		6.59	%		8.52	%

Reconciliation of Unrecognized Tax Benefits

A reconciliation of the beginning and ending unrecognized tax benefits is provided below:

($ in thousands)	2013			2012
Balance at January 1	$	4,130		$	5,279
Increase related to current year tax positions		35			35
Increase related to prior year tax positions		35			182
Decrease as a result of lapse of statute of limitations		(36	)		(881	)
Decrease related to settlements with taxing authorities		(121	)		(485	)
Balance at December 31	$	4,043		$	4,130