Fair Value Measurements

9 Months Ended

Sep. 30, 2012

Fair Value Measurements [Abstract]

FAIR VALUE MEASUREMENTS

2. FAIR VALUE MEASUREMENTS

The Company has developed valuation techniques based upon observable and unobservable inputs to calculate the fair value of non-current monetary assets and liabilities. Observable inputs reflect market data obtained from independent sources while unobservable inputs reflect internal market assumptions. These two types of inputs create the following fair value hierarchy:

• Level 1- Quoted prices for identical instruments in active markets;

• Level 2- Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations whose inputs are observable or whose significant value drivers are observable; and

• Level 3- Significant inputs to the valuation model are unobservable.

The fair values of cash and cash equivalents, restricted cash, net accounts receivable, and payable, other short-term monetary assets and liabilities and capital leases approximate carrying values due to their nature. The fair value of the Company’s 2010 Senior Secured Credit Facility (“Senior Credit Facility”), convertible notes and other long-term obligations of $493,951 at September 30, 2012, were estimated based primarily on quoted market prices (Level 1). The carrying values of these liabilities totaled $563,201 at September 30, 2012.

Fair Value Measurements on a Recurring Basis

Financial assets and liabilities are classified within the fair value hierarchy in their entirety based on the lowest level of input that is significant to the fair value measurements. The Company’s assessment of the significance of a particular input to the fair value measurements requires judgment and may affect the valuation of the assets and liabilities being measured, as well as their level within the fair value hierarchy.

The following table presents the balances of assets and liabilities measured at fair value on a recurring basis as of September 30, 2012 and December 31, 2011, at each hierarchical level:

	September 30, 2012										December 31, 2011
	Total			Level 1		Level 2			Level 3		Total			Level 1		Level 2			Level 3
Liabilities:
Other long-term liabilities
Interest rate swaps	$	(10,687	)	$	—	$	(10,687	)	$	—	$	(8,478	)	$	—	$	(8,478	)	$	—

The Company uses derivative financial instruments to hedge variable interest rate debt to manage interest rate risk. To the extent that derivative financial instruments are outstanding as of a period end, the fair value of those instruments, represented by the estimated amount the Company would receive or pay to terminate the agreement, is reported on the balance sheet.

Derivative contracts, included in Other long-term liabilities at September 30, 2012 and December 31, 2011, were comprised of forward floating-to-fixed interest rate swaps that are valued using models based on readily observable market parameters for all substantial terms and are classified within Level 2.

See “Note 10 – Subsequent Events” for a description of the amendment to the Company’s Senior Credit Facility effective November 1, 2012 and its expected effect on the Company’s forward floating-to-fixed interest rate swaps.