FAIR VALUE MEASUREMENTS

12 Months Ended

Dec. 31, 2013

The fair value amounts for cash and equivalents, accounts receivable, net, accounts payable and accrued expenses approximate carrying amounts due to the short maturities of these instruments. The estimated fair value of our long-term debt and capital lease obligations at December 31, 2013 and 2012 was based on expected future payments discounted using current interest rates offered to us on debt of the same remaining maturity and characteristics, including credit quality, and did not vary materially from carrying value.

Fair value is defined as an exit price representing the amount that would be received to sell an asset or paid to transfer a liability at the measurement date in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. ASC 820, “Fair Value Measurements and Disclosures,” establishes a three-tier fair value hierarchy as a basis for such assumptions which prioritizes the inputs used in measuring fair value as follows:


•	Level 1 – Quoted prices in active markets for identical assets or liabilities;


•	Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and


•	Level 3 – Unobservable inputs for the asset or liability in which there is little or no market data.

Recurring Fair Value Measurement

During 2013, our investment in a privately-held conferencing company changed from a historical cost investment to an available-for-sale asset when that company’s shares began trading publicly on a foreign stock exchange. The fair value of this investment was based on the quoted price of our shares on that foreign exchange at the measurement date of December 31, 2013; therefore, the fair value of this investment was based on Level 1 inputs. As of December 31, 2013, the balance of this investment is included as a component of “Prepaid expenses and other current assets” on our consolidated balance sheets. As of December 31, 2012, we had no assets or liabilities that were recorded at fair value on a recurring basis.

As further discussed in Note 12, we recorded a contingent consideration liability in connection with our Powwownow acquisition. The fair value of the liability was estimated using internal forecasts with inputs that are not observable in the market, and thus represents a Level 3 fair value measurement. The inputs in the Level 3 measurement are not supported by market activity, as they are probability assessments of expected future sales related to our acquisition of Powwownow during the earn-out period.

We have segregated all financial assets and liabilities that are measured at fair value on a recurring basis into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date in the table below (in thousands):



	December 31, 2013
	Fair Value		Level 1		Level 2		Level 3
Current Assets:
Available-for-sale securities	$	3,537	$	3,537	$	—	$	—
Total	$	3,537	$	3,537	$	—	$	—

	Fair Value		Level 1		Level 2		Level 3
Long-term Liabilities:
Earn-out liability	$	3,841	$	—	$	—	$	3,841
Total	$	3,841	$	—	$	—	$	3,841

Non-recurring Fair Value Measurement

We are required to record certain assets and liabilities at fair value on a non-recurring basis. Generally, assets and liabilities recorded at fair value on a non-recurring basis are the result of impairment charges.

During the year ended December 31, 2013, we measured certain non-financial assets at fair value due to impairment made by market conditions. The following table depicts the non-recurring fair value measurements discussed below by asset category and the level within the fair value hierarchy in which the related assumptions were derived (in thousands):



	December 31, 2013
	Fair Value		Level 1		Level 2		Level 3		Total Losses

Land, building and improvements	$	786	$	—	$	786	$	—	$	964
Total	$	786	$	—	$	786	$	—	$	964

During the year ended December 31, 2013, we wrote down one of our facilities in Europe with a carrying amount of $1.8 million, including land, building and improvements, to its fair value of $0.8 million, based on quoted prices for similar assets in the market.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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