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Fair Value Measurements
9 Months Ended
Sep. 30, 2016
Fair Value Disclosures [Abstract]  
Fair Value Measurements
Fair Value Measurements.
Due to its foreign operations, the company is exposed to the effects of foreign currency exchange rate fluctuations on the U.S. dollar, principally related to intercompany account balances. The company uses derivative financial instruments to reduce its exposure to market risks from changes in foreign currency exchange rates on such balances. The company enters into foreign exchange forward contracts, generally having maturities of 3 months or less, which have not been designated as hedging instruments. At September 30, 2016 and 2015, the notional amount of these contracts was $432.5 million and $409.3 million, respectively. At September 30, 2016 and 2015, the fair value of such contracts was a net gain of $0.1 million and a net loss of $0.8 million, respectively, of which $0.9 million and $0.6 million, respectively, has been recognized in “Prepaid expenses and other current assets” and $0.8 million and $1.4 million, respectively, has been recognized in “Other accrued liabilities” in the company’s consolidated balance sheet. For the nine months ended September 30, 2016 and 2015, changes in the fair value of these instruments was a loss of $19.8 million and a gain of $13.7 million, respectively, which has been recognized in earnings in “Other income (expense), net” in the company’s consolidated statement of income. The fair value of these forward contracts is based on quoted prices for similar but not identical financial instruments; as such, the inputs are considered Level 2 inputs.
Financial assets with carrying values approximating fair value include cash and cash equivalents and accounts receivable. Financial liabilities with carrying values approximating fair value include accounts payable and other accrued liabilities. The carrying amounts of these financial assets and liabilities approximate fair value due to their short maturities. The fair value of long-term debt is based on market prices (Level 2 inputs). At September 30, 2016 and December 31, 2015, the fair value of the company's Senior Notes due 2017 was $216.8 million and $213.2 million, respectively. At September 30, 2016, the fair value of the company's Convertible Senior Notes due 2021, which were issued in March and April of 2016, was $259.2 million.