Fair Value Measurements

3 Months Ended

Mar. 31, 2017

We use interest rate swaps to convert our line revolving credit facility’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 our financial assets that were measured at fair value on a recurring basis at March 31, 2017:



			Quoted
			Prices
	Asset		in Active		Significant
	Carrying		Markets for		Other		Significant
	Value at		Identical		Observable		Unobservable
	March 31,		Instruments		Inputs		Inputs
	2017		(Level 1)		(Level 2)		(Level 3)
Interest rate swaps	$	822	$	—	$	822	$	—
Foreign currency hedges	$	522	$	—	$	522	$	—

The table below summarizes the financial assets (liabilities) that were measured at fair value on a recurring basis as of December 31, 2016:



				Quoted
	Asset			Prices
	(Liability)			in Active		Significant
	Carrying			Markets for		Other			Significant
	Value at			Identical		Observable			Unobservable
	December 31,			Instruments		Inputs			Inputs
	2016			(Level 1)		(Level 2)			(Level 3)
Interest rate swaps	$	753		$	—	$	753		$	—
Foreign currency hedges	$	(601	)	$	—	$	(601	)	$	—

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, 2016	$	(768	)	$	—
Settled in cash	—			54
Included in earnings	928			(18		)
Included in other comprehensive earnings	593			(637		)
Balance at December 31, 2016	$	753		$	(601	)
Settled in cash	—			(157		)
Included in earnings	—			157
Included in other comprehensive earnings	69			1,123
Balance at March 31, 2017	$	822		$	522

Our long-term debt consists of the Revolving Credit Facility which is recorded at its carrying value. There is a readily determinable market for our 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.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details