Fair Value

FASB ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. FASB ASC 820 establishes a fair value hierarchy that prioritizes the inputs used in measuring fair value into three broad levels as follows:


•	Level 1 — Quoted prices in active markets for identical assets or liabilities.


•	Level 2 — Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly.


•	Level 3 — Unobservable inputs based on our own assumptions.



	Fair Value at										Fair Value at
Asset / (Liability) (dollars in thousands)	June 30, 2015										December 31, 2014
Asset / (Liability) (dollars in thousands)	Level 1		Level 2			Level 3		Total			Level 1		Level 2			Level 3		Total
Commodity futures natural gas contracts	$	—	$	(2,318	)	$	—	$	(2,318	)	$	—	$	(2,868	)	$	—	$	(2,868	)
Currency contracts	—		116			—		116			—		403			—		403
Interest rate agreement	—		(11		)	—		(11		)	—		—			—		—
Net derivative asset (liability)	$	—	$	(2,213	)	$	—	$	(2,213	)	$	—	$	(2,465	)	$	—	$	(2,465	)

The fair values of our commodity futures natural gas contracts and currency contracts are determined using observable market inputs. The fair value of our interest rate agreement is based on the market standard methodology of netting the discounted expected future fixed cash payments and the discounted future variable cash receipts. The variable cash receipts are based on an expectation of future interest rates derived from observed market interest rate forward curves. Since these inputs are observable in active markets over the terms that the instruments are held, the derivatives are classified as Level 2 in the hierarchy. We also evaluate Company and counterparty risk in determining fair values. The commodity futures natural gas contracts, interest rate agreement and currency contracts are hedges of either recorded assets or liabilities or anticipated transactions. Changes in values of the underlying hedged assets and liabilities or anticipated transactions are not reflected in the above table.

The total derivative position is recorded on the Condensed Consolidated Balance Sheets as follows:



Asset / (Liability) (dollars in thousands)	June 30, 2015			December 31, 2014
Prepaid and other current assets	$	116		$	403
Derivative liability	(2,296		)	(2,653		)
Other long-term liabilities	(33		)	(215		)
Net derivative asset (liability)	$	(2,213	)	$	(2,465	)