NOTE 12 FAIR VALUE

Authoritative guidelines require the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows:

Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities.

Level 2: Observable inputs other than those included in Level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.

Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.

As of December 31, 2018, the fair values of our financial assets and liabilities were categorized as follows:


	Total		Level 1		Level 2		Level 3
Assets
Foreign exchange contracts (1)	$	259	$	—	$	259	$	—
Total assets at fair value	$	259	$	—	$	259	$	—
Liabilities
Foreign exchange contracts (1)	$	331	$	—	$	331	$	—
Cross currency swap contract (1)		1,040		—		1,040		—
Total liabilities at fair value	$	1,371	$	—	$	1,371	$	—

As of December 31, 2017, the fair values of our financial assets and liabilities were categorized as follows:


	Total		Level 1		Level 2		Level 3
Assets
Foreign exchange contracts (1)	$	663	$	—	$	663	$	—
Total assets at fair value	$	663	$	—	$	663	$	—
Liabilities
Foreign exchange contracts (1)	$	1,604	$	—	$	1,604	$	—
Cross currency swap contract (1)		16,309		—		16,309		—
Total liabilities at fair value	$	17,913	$	—	$	17,913	$	—

(1)

Market approach valuation technique based on observable market transactions of spot and forward rates.

The carrying amounts of our other current financial instruments such as cash and equivalents, accounts and notes receivable, notes payable and current maturities of long‑term obligations approximate fair value due to the short‑term maturity of the instrument. We consider our long‑term obligations a Level 2 liability and utilize the market approach valuation technique based on interest rates that are currently available to us for issuance of debt with similar terms and maturities. The estimated fair value of our long‑term obligations was $1.1 billion as of December 31, 2018 and December 31, 2017. As discussed in Note 20 – Acquisitions, we have a contingent consideration obligation to the selling shareholders of Reboul SAS (“Reboul”) in connection with the Reboul Acquisition (as defined herein) based on 2018 earnings before net interest, taxes, depreciation and amortization (“EBITDA”). We consider this a Level 3 liability; however, we estimated the aggregate fair value for this contingent consideration arrangement to be zero as of December 31, 2018.