Fair Value Measurement

12 Months Ended

Dec. 31, 2014

Fair Value Measurement

3. Fair Value Measurement

At December 31, 2014, our financial instruments consist of cash, accounts receivable, accounts payable, accrued liabilities and our revolving credit facility. The carrying value of these instruments approximates fair value as a result of the short duration of such instruments or due to the variability of the interest cost associated with such instruments. The fair values of our derivative assets and liabilities measured on a recurring basis as of December 31 are categorized as follows (in thousands):

	2014								2013
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Derivative assets 1	$	232	$	—	$	232	$	—	$	259	$	—	$	259	$	—
Derivative liabilities 1	$	562	$	—	$	562	$	—	$	105	$	—	$	105	$	—

¹  Based on observable market transactions of spot and forward rates.

Our derivative assets and liabilities represent foreign exchange contracts that are measured at fair value using observable market inputs such as forward rates, interest rates, our own credit risk and our counterparties’ credit risks. Based on these inputs, the derivative assets and liabilities are classified as Level 2.

The following table summarizes the notional amount of our open foreign exchange contracts at December 31 (in thousands):

	2014				2013
	U.S. $ Equivalent		U.S. Equivalent Fair Value		U.S. $ Equivalent		U.S. Equivalent Fair Value
Commitments to buy or sell currencies	$	24,206	$	23,411	$	11,157	$	11,311

We consider the impact of our credit risk on the fair value of the contracts, as well as the ability to execute obligations under the contract.

The following table summarizes the fair value and presentation in the consolidated balance sheets for derivatives not designated as accounting hedges at December 31 (in thousands):

	Asset Derivatives
	2014			2013
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Foreign exchange contracts	Other current assets	$	232	Other current assets	$	259
	Liability Derivatives
	2014			2013
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Foreign exchange contracts	Accrued liabilities	$	562	Accrued liabilities	$	105

The following table summarizes the effect of derivative instruments on the consolidated statements of income (loss) for derivatives not designated as accounting hedges at December 31 (in thousands):

		2014			2013
	Location of Loss Recognized in Income on Derivatives	Amount of Loss Recognized in Income on Derivatives
Foreign exchange contracts	Cost of Revenues	$	(484	)	$	(264	)

The carrying amounts and fair values of our long-term debt at December 31 are as follows (in thousands):

	2014				2013
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt	$	250,000	$	257,500	$	250,000	$	250,000

The following methods were used to estimate the fair value of each class of financial instruments:

Long-term debt.    The fair value of long-term debt obligations is based on quoted market prices or on rates available on debt with similar terms and maturities.

There were no fair value measurements of our long-lived assets and definite-lived intangible assets measured on a non-recurring basis as of December 31, 2014 or 2013.