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FAIR VALUE MEASUREMENTS
6 Months Ended
Sep. 30, 2015
FAIR VALUE MEASUREMENTS
(8)

FAIR VALUE MEASUREMENTS

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The company measures on a recurring basis and records at fair value investments held by participants in the supplemental plan. The following table provides the fair value hierarchy for the plan assets measured at fair value as of September 30, 2015:

 

(In thousands)    Total     Quoted prices in
active markets
(Level 1)
    Significant
observable
inputs
(Level 2)
    

Significant    
unobservable    
inputs    

(Level 3)    

 

 

 

Equity securities:

         

Common stock

   $             3,382        3,382        ---         ---       

Preferred stock

     ---        ---        ---         ---       

Foreign stock

     223        223        ---         ---       

American depository receipts

     1,487        1,487        ---         ---       

Preferred American depository receipts

     12        12        ---         ---       

Real estate investment trusts

     68        68        ---         ---       

Debt securities:

         

Government debt securities

     1,691        1,069        622         ---       

Open ended mutual funds

     1,839        1,839        ---         ---       

Cash and cash equivalents

     592        120        472         ---       

 

 

Total

   $ 9,294        8,200        1,094         ---       

Other pending transactions

     (158     (158     ---         ---       

 

 

Total fair value of plan assets

   $ 9,136        8,042        1,094         ---       

 

 

The following table provides the fair value hierarchy for the plan assets measured at fair value as of March 31, 2015:

 

(In thousands)    Total     Quoted prices in
active markets
(Level 1)
    Significant
observable
inputs
(Level 2)
    

Significant    
unobservable    
inputs    

(Level 3)    

 

 

 

Equity securities:

         

Common stock

   $ 3,859        3,859        ---         ---       

Preferred stock

     ---        ---        ---         ---       

Foreign stock

     201        201        ---         ---       

American depository receipts

     1,685        1,685        ---         ---       

Preferred American depository receipts

     15        15        ---         ---       

Real estate investment trusts

     59        59        ---         ---       

Debt securities:

         

Government debt securities

     1,926        1,377        549         ---       

Open ended mutual funds

     1,916        1,916        ---         ---       

Cash and cash equivalents

     377        72        305         ---       

 

 

Total

   $             10,038        9,184        854         ---       

Other pending transactions

     (123     (123     ---         ---       

 

 

Total fair value of plan assets

   $ 9,915        9,061        854         ---       

 

 

 

Other Financial Instruments

The company’s primary financial instruments consist of cash and cash equivalents, trade receivables and trade payables with book values that are considered to be representative of their respective fair values. The company periodically utilizes derivative financial instruments to hedge against foreign currency denominated assets and liabilities, currency commitments, or to lock in desired interest rates. These transactions are generally spot or forward currency contracts or interest rate swaps that are entered into with major financial institutions. Derivative financial instruments are intended to reduce the company’s exposure to foreign currency exchange risk and interest rate risk. The company enters into derivative instruments only to the extent considered necessary to address its risk management objectives and does not use derivative contracts for speculative purposes. The derivative instruments are recorded at fair value using quoted prices and quotes obtainable from the counterparties to the derivative instruments.

Cash Equivalents. The company’s cash equivalents, which are securities with maturities less than 90 days, are held in money market funds or time deposit accounts with highly rated financial institutions. The carrying value for cash equivalents is considered to be representative of its fair value due to the short duration and conservative nature of the cash equivalent investment portfolio.

Spot Derivatives. Spot derivative financial instruments are short-term in nature and generally settle within two business days. The fair value of spot derivatives approximates the carrying value due to the short-term nature of this instrument, and as a result, no gains or losses are recognized.

The company had 49 outstanding spot contracts at September 30, 2015, which had a notional aggregate value of $1 million. The company had two foreign exchange spot contracts outstanding at March 31, 2015, which had a notional value of $2.3 million and settled by April 1, 2015.

Forward Derivatives. Forward derivative financial instruments are usually longer-term in nature but generally do not exceed one year. The accounting for gains or losses on forward contracts is dependent on the nature of the risk being hedged and the effectiveness of the hedge. Forward contracts are valued using counterparty quotations, and we validate the information obtained from the counterparties in calculating the ultimate fair values using the market approach and obtaining broker quotations. As such, these derivative contracts are classified as Level 2.

At September 30, 2015, the company had 16 Norwegian kroner (NOK) forward contracts outstanding, which are generally intended to hedge the company’s foreign exchange exposure relating to its NOK denominated notes payable as disclosed in Note (5). The forward contracts have expiration dates between November 10, 2015 and July 28, 2016. The combined change in fair value of the forward contracts was $0.8 million, all of which was recorded as a foreign exchange loss during the six months ended September 30, 2015, because the forward contracts did not qualify as hedge instruments. All changes in fair value of the forward contracts were recorded in earnings. The company did not have any forward contracts outstanding at March 31, 2015.

The following table provides the fair value hierarchy for the company’s other financial instruments measured as of September 30, 2015:

 

(In thousands)    Total          Quoted prices in
active markets
(Level 1)
     Significant
observable
inputs
(Level 2)
    

Significant    
unobservable    
inputs    

(Level 3)    

 

 

 

Money market cash equivalents

   $           2,490             2,490             ---         ---       

 

 

Total fair value of assets

   $ 2,490             2,490             ---         ---       

 

 

 

The following table provides the fair value hierarchy for the company’s other financial instruments measured as of March 31, 2015:

 

(In thousands)    Total          Quoted prices in
active markets
(Level 1)
     Significant
observable
inputs
(Level 2)
    

Significant    
unobservable    
inputs    

(Level 3)    

 

 

 

Money market cash equivalents

   $           3,007             3,007             ---         ---       

 

 

Total fair value of assets

   $ 3,007             3,007             ---         ---       

 

 

For disclosures related to assets and liabilities measured at fair value on a nonrecurring basis refer to Note (15).