Fair Value

9 Months Ended

Sep. 30, 2011

Fair Value [Abstract]

FAIR VALUE

3. FAIR VALUE

The tables below set forth our financial assets and liabilities measured at fair value on a recurring basis using a market-based approach at September 30, 2011. These assets and liabilities have been categorized according to the three-level fair value hierarchy established by ASC 820, which prioritizes the inputs used in measuring fair value, as follows:

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

• Level 2 — Observable market based inputs or unobservable inputs that are corroborated by market data.

• Level 3 — Unobservable inputs that are not corroborated by market data.

As of September 30, 2011, our interest rate exchange agreement liabilities, net, were valued at $66.7 million using Level 2 inputs, as follows (dollars in thousands):

	Fair Value as of September 30, 2011
	Level 1		Level 2		Level 3		Total
Assets
Interest rate exchange agreements	$	—	$	—	$	—	$	—
Liabilities
Interest rate exchange agreements	$	—	$	66,726	$	—	$	66,726
Interest rate exchange agreements — liabilities, net	$	—	$	66,726	$	—	$	66,726

As of December 31, 2010, our interest rate exchange agreement liabilities, net, were valued at $45.4 million using Level 2 inputs, as follows (dollars in thousands):

	Fair Value as of December 31, 2010
	Level 1		Level 2		Level 3		Total
Assets
Interest rate exchange agreements	$	—	$	2,298	$	—	$	2,298
Liabilities
Interest rate exchange agreements	$	—	$	47,661	$	—	$	47,661
Interest rate exchange agreements — liabilities, net	$	—	$	45,363	$	—	$	45,363

The fair value of our interest rate exchange agreements is the estimated amount that we would receive or pay to terminate such agreements, taking into account market interest rates and the remaining time to maturities. As of September 30, 2011, based upon mark-to-market valuation, we recorded on our consolidated balance sheet, an accumulated current liability of $18.5 million and an accumulated long-term liability of $48.2 million. As of December 31, 2010, based upon mark-to-market valuation, we recorded on our consolidated balance sheet, a long-term asset of $2.3 million, an accumulated current liability of $18.0 million and an accumulated long-term liability of $29.7 million. As a result of the mark-to-market valuations on these interest rate exchange agreements, we recorded a net loss on derivatives of $17.2 million and $12.6 million for the three months ended September 30, 2011 and 2010, respectively. As a result of the mark-to-market valuations on these interest rate exchange agreements, we recorded a net loss on derivatives of $21.4 million and $32.5 million for the nine months ended September 30, 2011 and 2010, respectively.