NOTE 7 — Financial Instruments

Our financial instruments are classified and disclosed in one of the following three categories:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability;

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

The following table summarizes the valuation of our financial instrument pricing levels as of September 30, 2013 and December 31, 2012:

	Total		Level 1		Level 2		Level 3
September 30, 2013
Available-for-sale securities	$	257,000	$	257,000	$	—	$	—

December 31, 2012
Available-for-sale securities	$	239,000	$	239,000	$	—	$	—

Our investments in available-for-sale securities consist of mutual funds. These investments are included in other assets on our consolidated balance sheets.

We previously had an interest rate swap agreement effectively converting a portion of the outstanding borrowings under our revolving credit agreement to a fixed-rate, thereby hedging against the impact of potential interest rate changes on future interest expense. The interest rate swap expired in April 2012. We recognized $0 and $83,000, net of income taxes, in unrealized gains on our interest rate swap during the three and nine-month periods ended September 30, 2012, respectively.

The carrying amounts of other financial instruments reported in our consolidated balance sheets for current assets and current liabilities approximates their fair values because of the short maturity of these instruments.

At September 30, 2013 and December 31, 2012, there was $52,500,000 and $58,500,000, respectively, outstanding under our revolving credit agreement. The borrowings under our revolving credit agreement bear interest at the variable rate described in NOTE 4 — Credit Facility and therefore we believe approximate fair value. We consider the inputs utilized to determine the fair value of borrowings under our revolving credit agreement to be Level 2 inputs.