Fair Value Disclosures

The following table shows the Company’s assets and liabilities accounted for at fair value on a recurring basis:

Fair Value Measurements at Reporting Date Using

Quoted Prices in

Active Markets for

Identical Assets

Significant Other

Observable Inputs

Significant

Unobservable Inputs

Description

December 31, 2014

(Level 1)

(Level 2)

(Level 3)

Liabilities:

Contingent consideration payable

1.4

—

1.4

The fair value of the derivative instruments have been determined based on the market equivalents at the balance sheet date, taking into account current commodity forward rates, therefore, they are classified within Level 2 of the valuation hierarchy. Our valuation techniques and Level 3 inputs used to estimate the fair value of the contingent consideration payable in connection with our acquisition of Rahu Catalytics Limited ("Rahu") are described below. There were no transfers into or out of Levels 1, 2 or 3 in 2014 or 2013.

The following table summarizes changes in Level 3 liabilities measure at fair value on a recurring basis:



	Contingent Consideration
Fair Value at December 31, 2013	$	1.4
Accretion expense	0.2
Foreign exchange	(0.2		)
Fair Value at December 31, 2014	$	1.4

We acquired Rahu on December 22, 2011. The purchase price included contingent consideration of up to an additional €20.0 million ($24.3 million at December 31, 2014) based on achieving certain volume targets over a fifteen year period ending on December 31, 2026. We estimated the fair value of the contingent consideration liability using probability-weighted expected future cash flows and applied a discount rate that appropriately captured a market participant's view of the risk associated with the liability. The liability for contingent consideration is included in Other non-current liabilities in the Consolidated Balance Sheet. The valuation of contingent consideration is classified utilizing Level 3 inputs consistent with reasonably available assumptions which would be made by other market participants. There are many factors that could impact the likelihood that we will pay the contingent consideration, and therefore, affect its value. Such factors include the overall economic conditions and our ability to drive sales volumes as planned. Subsequent to the date of acquisition the estimated fair value of the contingent consideration was reduced to €1.0 million ($1.4 million)after an evaluation of new information available in the fourth quarter of 2013. The change was reflected within Other income in the 2013 Consolidated Statement of Operations. A change in a market participant view of risks could also impact the value of the contingent consideration.

We also hold financial instruments consisting of cash, accounts receivable, and accounts payable. The carrying amounts of cash, accounts receivable and accounts payable approximate fair value due to the short-term maturities of these instruments. Revolver debt had a carrying value of $12.5 million at December 31, 2014 and is the approximate fair value due to the the short-term nature of the instrument. There was no long-term debt outstanding as of December 31, 2014 or 2013. Derivative instruments are recorded at fair value as indicated above.

We utilize a “relief from royalty” methodology in estimating fair values for indefinite-lived tradenames. The methodology estimates the fair value of each trade name by determining the present value of the royalty payments that are avoided as a result of owning the tradename and includes judgmental assumptions about sales growth that are consistent with the assumptions used to determine the fair value of reporting units in our goodwill testing. The fair value measurements were calculated using unobservable inputs, classified as Level 3, requiring significant management judgment due to the absence of quoted market prices or observable inputs for assets of a similar nature.

Accounts receivable potentially subjects us to a concentration of credit risk. We maintain significant accounts receivable balances with several large customers. At December 31, 2014 and 2013 the accounts receivable balance from our largest customer represented 2% of the Company’s net accounts receivable, respectively. Generally, we do not obtain security from our customers in support of accounts receivable.

Sales to the top three customers in the Battery Technologies segment represented approximately 49%, 48% and 52% of Battery Technologies’ net sales in 2014, 2013 and 2012, respectively. The loss of one or more of these customers could have a material adverse effect on Battery Technologies’ business, results of operations or financial position.