Fair Value Measurements

3 Months Ended

Mar. 31, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

CTS uses interest rate swaps to convert our line of credit’s variable rate of interest into a fixed rate and foreign currency forward contracts to hedge the effect of foreign currency changes on certain revenues and costs denominated in foreign currencies. These derivative financial instruments are measured at fair value on a recurring basis.  The table below summarizes CTS’ financial assets (liabilities) that were measured at fair value at March 31, 2016, and the realized gain (loss) recorded during the three month period ended March 31, 2016:

				Quoted
				Prices
				in Active		Significant					Realized
	Carrying			Markets for		Other			Significant		Gain (Loss) for
	Value at			Identical		Observable			Unobservable		Three Months Ended
	March 31,			Instruments		Inputs			Inputs		March 31,
	2016			(Level 1)		(Level 2)			(Level 3)		2016
Interest rate swaps	$	(674	)	$	—	$	(674	)	$	—	$	233
Foreign currency hedges	$	379		$	—	$	379		$	—	$	(2	)

The table below summarizes the financial liability that was measured at fair value on a recurring basis as of December 31, 2015, and the loss recorded during the year ended December 31, 2015:

Quoted

Prices

in Active

Significant

Realized

Carrying

Markets for

Other

Significant

Gain (Loss) for

Value at

Identical

Observable

Unobservable

Year Ended

December 31,

Instruments

Inputs

Inputs

December 31,

2015

(Level 1)

(Level 2)

(Level 3)

2015

Interest rate swaps

$

(768

)

$

—

$

(768

)

$

—

$

(768

)

The fair value of our interest rate swaps and foreign currency hedges were measured using standard valuation models using market-based observable inputs over the contractual terms, including forward yield curves, among others. There is a readily determinable market for these derivative instruments, but that market is not active and therefore they are classified within level 2 of the fair value hierarchy.

The table below provides a reconciliation of the recurring financial assets (liabilities) for our derivative instruments:

				Foreign
	Interest			Currency
	Rate Swaps			Hedges
Balance at January 1, 2015	$	(1,020	)	$	—
Total gains (losses) for the period:
Included in earnings	768			—
Included in other comprehensive income	(516		)	—
Balance at December 31, 2015	$	(768	)	$	—
Total gains (losses) for the period:
Included in earnings	233			(2		)
Included in other comprehensive income	(139		)	381
Balance at March 31, 2016	$	(674	)	$	379

CTS' long-term debt consists of the Revolving Credit Facility which is recorded at its carrying value. There is a readily determinable market for CTS' long-term debt and it is classified within Level 2 of the fair value hierarchy as the market is not deemed to be active. The fair value of long-term debt approximates carrying value and was determined by valuing a similar hypothetical coupon bond and attributing that value to our long-term debt under the Revolving Credit Facility.