FINANCIAL INSTRUMENTS

9 Months Ended

Sep. 30, 2013

NOTE 6. FINANCIAL INSTRUMENTS

At September 30, 2013 and December 31, 2012, the Company’s financial instruments consisted of cash and cash equivalents, receivables, franchise notes receivable, accounts payable, certain accrued liabilities and long-term debt. The carrying amount of cash and cash equivalents, receivables, accounts payable and accrued liabilities approximates their respective fair values because of the short maturities of these instruments. Based on the interest rates currently available and their underlying risk, the carrying value of the franchise notes receivable approximates their respective fair values. These fair values are reflected net of reserves for uncollectible amounts. As considerable judgment is required to determine these estimates and assumptions, changes in the assumptions or methodologies may have an effect on these estimates. The Company determined the estimated fair values of its debt by using currently available market information. The fair value measurement for debt is classified as a Level 2 input on the fair value hierarchy, as defined in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. The actual and estimated fair values of the Company’s financial instruments are as follows:

	September 30, 2013				December 31, 2012
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
	(unaudited)
	(in thousands)
Cash and cash equivalents	$	77,678	$	77,678	$	158,541	$	158,541
Receivables, net	152,452		152,452		129,641		129,641
Franchise notes receivable, net	8,276		8,276		7,589		7,589
Accounts payable	161,736		161,736		125,165		125,165
Long-term debt (including current portion)	1,096,092		1,098,832		1,098,562		1,101,309