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Fair value measurement
 12 Months Ended
Dec. 31, 2016
Fair Value Disclosures [Abstract]  
Fair value measurement
Fair value measurement
Fair value is the price that would be received from the sale of an asset or paid to transfer a liability, using assumptions that market participants would use in pricing an asset or liability. The FASB's fair value guidance establishes a three-level hierarchy of the inputs (i.e., assumptions that market participants would use in pricing an asset or liability) used to measure fair value, giving the highest priority to quoted prices in active markets and the lowest priority to unobservable inputs in measuring fair value. The categorization within the valuation hierarchy is based on the lowest level of input that is significant to the entire fair value measurement. The levels of inputs within the hierarchy used to measure fair value are as follows:
Level 1 — inputs to the fair value measurement that are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 — inputs to the fair value measurement that include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3 — inputs to the fair value measurement that are unobservable inputs for the asset or liability.
The following tables provide information regarding the Company's financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2016 and 2015:
 
Total carrying
value at
December 31,
2016
 
Quoted prices in
active markets
(Level 1)
 
Significant
other
observable
inputs (Level 2)
 
Significant
unobservable
inputs (Level 3)
 
(Dollars in thousands)
Investments in marketable securities
$
7,660

 
$
7,660

 
$
—

 
$
—

Derivative assets
1,157

 
—

 
1,157

 
—

Derivative liabilities
2,257

 
—

 
2,257

 
—

Contingent consideration liabilities
7,102

 
—

 
—

 
7,102

 
 
Total carrying
value at
December 31,
2015
 
Quoted prices in
active markets
(Level 1)
 
Significant
other
observable
inputs (Level 2)
 
Significant
unobservable
inputs (Level 3)
 
(Dollars in thousands)
Investments in marketable securities
$
6,922

 
$
6,922

 
$
—

 
$
—

Derivative assets
329

 
—

 
329

 
—

Derivative liabilities
1,298

 
—

 
1,298

 
—

Contingent consideration liabilities
20,829

 
—

 
—

 
20,829


There were no changes in the inputs used to measure fair value of financial assets or liabilities among Level 1, Level 2 or Level 3 within the fair value hierarchy during the years ended December 31, 2016 or 2015.
The following table provides information regarding changes in the Company's contingent consideration liabilities for the years ended December 31, 2016 and 2015:
 
Contingent consideration
 
2016
 
2015
 
(Dollars in thousands)
Beginning balance – January 1
$
20,829

 
$
33,433

Payment
(7,282
)
 
(8,054
)
Revaluations
(6,445
)
 
(4,550
)
Ending balance – December 31
$
7,102

 
$
20,829


The Company reduced contingent consideration liabilities and selling, general and administrative expense by $8.3 million and $4.4 million for the years ended December 31, 2016 and 2015, respectively, after determining that relevant
conditions for the payment of certain contingent consideration is unlikely to be satisfied. This reduction is included within Revaluations in the above table.
See Note 8 for a discussion of the fair value of the Company’s borrowings and Note 4 for a discussion of non-recurring fair value measurements associated with long lived assets.
Valuation Techniques
The Company’s financial assets valued based upon Level 1 inputs are comprised of investments in marketable securities held in trust, which are available to satisfy benefit obligations under Company benefit plans and other arrangements. The investment assets of the trust are valued using quoted market prices.

The Company’s financial assets and liabilities valued based upon Level 2 inputs are comprised of foreign currency forward contracts. The Company uses foreign currency forward contracts to manage foreign currency transaction exposure as well as exposure to foreign currency denominated monetary assets and liabilities. The Company measures the fair value of the foreign currency forward contracts by calculating the amount required to enter into offsetting contracts with similar remaining maturities, based on quoted market prices, and taking into account the creditworthiness of the counterparties.
The Company’s financial liabilities valued based upon Level 3 inputs are comprised of contingent consideration arrangements pertaining to the Company’s acquisitions. As of December 31, 2016, the Company recorded $7.1 million of total liabilities for contingent consideration, of which $0.6 million was recorded as the current portion of contingent consideration and $6.5 million was recorded as other liabilities in the consolidated balance sheet. The Company determines the fair value of the liabilities for contingent consideration based on discounted cash flow analysis. This fair value measurement is based on significant inputs unobservable in the market, primarily estimated sales royalties and the discount rate and, therefore, constitutes a Level 3 measurement within the fair value hierarchy.