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Fair Value Measurements
6 Months Ended
Jun. 27, 2014
Fair Value Disclosures [Abstract]  
Fair Value Measurements
Fair Value Measurements
Recurring Fair Value Measurements
In accordance with accounting principles generally accepted in the U.S., certain assets and liabilities are required to be recorded at fair value on a recurring basis. For the Company, the only assets and liabilities that are adjusted to fair value on a recurring basis are derivative financial instruments.
Derivative Financial Instruments
The Company is directly and indirectly affected by changes in certain market conditions. These changes in market conditions may adversely impact the Company's financial performance and are referred to as "market risks." The Company, when deemed appropriate, uses derivatives as a risk management tool to mitigate the potential impact of certain market risks. The primary market risk managed by the Company through the use of derivative instruments is foreign currency exchange rate risk related to intercompany interest payments. The Company does not enter into derivative contracts for trading purposes.
The Company has entered into forward contracts to buy or sell a quantity of a currency at a predetermined future date, and at a predetermined rate or price to mitigate uncertainty and volatility, and to cover underlying exposures to certain payments in currencies other than the functional currency. The Company has not designated these contracts for hedge accounting treatment and, therefore, the gains and losses on these contracts are recorded in other income (loss), net in the condensed consolidated statement of operations. For the three months ended June 27, 2014 and June 28, 2013, the Company recognized gains of $0.1 million and losses of $0.1 million, respectively, related to these forward contracts. For the six months ended June 27, 2014 and June 28, 2013, the Company recognized gains of $0.1 million and $0.1 million, respectively, related to these forward contracts.
Derivatives are carried at fair value in the condensed consolidated balance sheet in the line item accrued expenses and other current liabilities. As of June 27, 2014 and December 31, 2013, the fair value of outstanding derivatives totaled liabilities of $0.1 million and $0.2 million, respectively. The fair value of foreign exchange contracts is determined using quoted prices for similar contracts obtained from financial institutions and is classified as a Level 2 measurement in the fair value hierarchy.
Nonrecurring Fair Value Measurements
In addition to assets and liabilities that are recorded at fair value on a recurring basis, the Company records assets and liabilities at fair value on a nonrecurring basis as required by accounting principles generally accepted in the U.S. Generally, adjustments made to record assets at fair value on a nonrecurring basis are the result of impairment charges.
The Company did not record any impairment charges related to assets measured at fair value on a nonrecurring basis during the three or six months ended June 27, 2014. During the first quarter of 2013, the Company recorded losses of approximately $1.6 million in other operating charges related to the reclassification of land and buildings to assets held for sale. These losses, incurred as part of the Company's restructuring activities in the European Engineered Products segment, represented the difference between the carrying value prior to the reclassification and the fair value. The fair value was determined based on the selling price less costs incurred to sell and was classified as Level 1 in the fair value hierarchy. The assets were sold during the second quarter of 2013 and no additional losses were recorded from the sale of the assets.
Other Fair Value Disclosures
The carrying amounts of cash and cash equivalents, receivables, accounts payable and accrued expenses, and loans and notes payable approximate their fair values because of the relatively short-term maturities of these instruments.
The fair value of our long-term debt is estimated using Level 2 inputs based on dealer quoted prices for our debt instruments based on recent transactions obtained from various sources. As of June 27, 2014, the carrying amount and fair value of our Senior Secured Notes, were $375.0 million and $375.0 million, respectively. As of December 31, 2013, the carrying amount and fair value of our Senior Secured Notes, were $375.0 million and $375.0 million, respectively.