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Other Comprehensive Income
 9 Months Ended
Sep. 28, 2014
Equity [Abstract]  
Other Comprehensive Income

NOTE 10 – Other Comprehensive Income

Shareholders’ equity includes certain items classified as Accumulated Other Comprehensive Income (“AOCI”), 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. These hedges are designated as cash flow hedges, and CTS has deferred income statement recognition of gains and losses until the hedged transaction occurs. Amounts reclassified to income from AOCI for hedges are included in interest expense. Further information related to CTS’ interest rate swaps is included in NOTE 13 – Fair Value Measurement.

 

  •   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 4 – 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 income. Transfer of foreign currency translation gains and (losses) from AOCI to income are included in Total other income (expense).

 

The components of other comprehensive loss for the three months ended September 28, 2014 are as follows (in thousands):

 

     As of
June 29, 2014		     Gain (Loss)
recognized
in
OCI		     Gain (Loss)
reclassified
from AOCI
to income		      Three months
ended
September 28,
2014		     As of
September 28, 2014		  

Changes in fair market value of hedges:

            

Gross

    $ (1,170 )   $ 124     $ 123      $ 247     $ (923 )

Income tax (benefit)

      (447 )     47       47        94       (353 )
  

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Net

      (723 )     77       76        153       (570 )

Changes in unrealized pension cost:

            

Gross

      (135,180 )     1,575       —          1,575       (133,605 )

Income tax (benefit)

      (53,896 )     539       —          539       (53,357 )
  

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Net

      (81,284 )     1,036       —          1,036       (80,248 )

Cumulative translation adjustment:

            

Gross

      1,470       (590 )     —           (590 )     880  

Income tax (benefit)

      (1,155 )      391        —           391        (764 ) 
  

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Net

      2,625        (981 )      —           (981 )      1,644   
  

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Total accumulated other comprehensive (loss) income

    $ (79,382 )   $ 132     $ 76       $ 208     $ (79,174 )
  

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

The components of other comprehensive loss for the three months ended September 29, 2013 are as follows (in thousands):

 

     As of
June 30, 2013		     Gain (Loss)
recognized
in
OCI		     Gain (Loss)
reclassified
from AOCI
to income		      Three months
ended
September 29,
2013		     As of
September 29, 2013		  

Changes in fair market value of hedges:

            

Gross

    $ (650 )   $ (428 )   $ 81       $ (347 )   $ (997 )

Income tax (benefit)

      (253 )     (168 )      31         (137 )     (390 )
  

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Net

      (397 )     (260 )     50         (210 )     (607 )

Changes in unrealized pension cost:

            

Gross

      (194,629 )     —          1,943         1,943        (192,686 )

Income tax (benefit)

      (76,660 )     —          771         771        (75,889 )
  

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Net

      (117,969 )     —          1,172         1,172        (116,797 ) 

Cumulative translation adjustment:

            

Gross

      (473 )      914        —           914        441   

Income tax (benefit)

      (182 )      (430 )      —           (430 )      (612 ) 
  

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Net

      (291 )      1,344        —           1,344       1,053   
  

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Total accumulated other comprehensive (loss) income

    $ (118,657 )    $ 1,084      $ 1,222       $ 2,306      $ (116,351 ) 
  

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

 

 

The components of other comprehensive loss for the nine months ended September 28, 2014 are as follows (in thousands):

 

     As of
December 31,
2013		     Gain (Loss)
Recognized
in
OCI		     Gain (Loss)
reclassified
from AOCI
to income		      Nine months
ended
September 29,
2014		     As of
September 28, 2014		  

Changes in fair market value of hedges :

            

Gross

    $ (998 )   $ (288 )   $ 363      $ 75     $ (923 )

Income tax (benefit)

      (402 )     (90 )     139        49       (353 )
  

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Net

      (596 )     (198 )     224        26       (570 )

Changes in unrealized pension cost:

            

Gross

      (138,133 )     4,356 (1)      172        4,528       (133,605 )

Income tax (benefit)

      (55,028 )     1,605       66         1,671       (53,357 )
  

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Net

      (83,105 )     2,751       106        2,857       (80,248 ) 

Cumulative translation adjustment:

            

Gross

      949       (69 )     —           (69 )     880  

Income tax (benefit)

      (855 )      91        —           91        (764 ) 
  

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Net

      1,804        (160 )      —           (160 )      1,644   
  

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Total accumulated other comprehensive (loss) income

    $ (81,897 )   $ 2,393     $ 330       $ 2,723     $ (79,174 )
  

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

The components of other comprehensive loss for the nine months ended September 29, 2013 are as follows (in thousands):

 

     As of
December 31,
2012		     Gain (Loss)
recognized
in
OCI		     Gain (Loss)
reclassified
from AOCI
to income		      Nine months
ended
September 29,
2013		     As of
September 29, 2013		  

Changes in fair market value of hedges :

            

Gross

    $ (1,606 )   $ 373      $ 236       $ 609      $ (997 )

Income tax (benefit)

      (626 )      144        92         236        (390 )
  

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Net

      (980 )     229        144         373        (607 )

Changes in unrealized pension cost:

            

Gross

      (199,241 )     —          6,555         6,555        (192,686 )

Income tax (benefit)

      (78,398 )     —          2,509         2,509        (75,889 )
  

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Net

      (120,843 )     —          4,046         4,046        (116,797 ) 

Cumulative translation adjustment:

            

Gross

      575        (134 )     —           (134 )     441   

Income tax (benefit)

      (644 )      32        —           32        (612 ) 
  

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Net

      1,219        (166 )      —           (166 )      1,053   
  

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Total accumulated other comprehensive (loss) income

    $ (120,604 )   $ 63      $ 4,190       $ 4,253      $ (116,351 )
  

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

 

(1) The actuarial loss reclassified to income for 2014 was recognized in Cost of goods sold of $1,557, Selling, general and administrative expenses of $2,129, and Research and development expenses of $670, in CTS’ Consolidated Statements of Comprehensive Earnings.