Fair Value And Derivative Financial Instruments

9 Months Ended

Sep. 30, 2011

Fair Value and Derivative Financial Instruments [Abstract]

Fair Value And Derivative Financial Instruments

NOTE G – FAIR VALUE AND DERIVATIVE FINANCIAL INSTRUMENTS

1. Fair Value

Within the framework for measuring fair value, Financial Accounting Standards Board Accounting Standards Codification ("FASB ASC") 820, Fair Value Measurements and Disclosures, establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard defines the three levels of inputs used to measure fair value as follows:

• Level 1: Inputs are unadjusted quoted prices for identical assets or liabilities in active markets, which primarily consist of financial instruments traded on exchange or futures markets.

• Level 2: Inputs are other than quoted prices in active markets (included in Level 1), which are directly or indirectly observable as of the financial reporting date, including derivative instruments transacted primarily in over-the-counter markets.

• Level 3: Unobservable inputs, which include inputs derived through extrapolation or interpolation that cannot be corroborated by observable market data.

As of September 30, 2011 and December 31, 2010, we had no outstanding assets or liabilities measured at fair value on a recurring basis.

2. Derivative Financial Instruments

The nature of our business involves market and financial risks. Specifically, we are exposed to commodity price risks and interest rate fluctuations on any outstanding borrowings under our Revolving Credit Facility. We have elected, from time to time, to manage commodity price risks and interest rate fluctuations with commodity swap, interest rate swap, and interest rate cap instruments. We were not party to any derivative financial instruments at December 31, 2010 or at any time during the nine months ended September 30, 2011. Consequently, we incurred no realized or unrealized gains or losses related to derivative financial instruments during the nine months ended September 30, 2011.

During the nine months ended September 30, 2010, we were party to an interest rate swap which matured on June 30, 2010. The interest rate swap was not designated as a hedge; consequently, the change in the fair value during the nine months ended September 30, 2010, was recognized in earnings as an unrealized gain of $2.1 million and is reflected separately in our Condensed Consolidated Statements of Operations and Comprehensive Income.