FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2012

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

NOTE 2—FAIR VALUE MEASUREMENTS

        ASC 820, Fair Value Measurements and Disclosures, provides guidance for measuring the fair value of assets and liabilities and requires expanded disclosures about fair value measurements. ASC 820 indicates that fair value should be determined based on the assumptions marketplace participants would use in pricing the asset or liability and provides additional guidelines to consider in determining the market-based measurement.

        ASC 820 requires fair value measurements to be classified and disclosed in one of the following categories:

Level 1:	Unadjusted quoted market prices for identical assets and liabilities.
Level 2:	Inputs other than Level 1 that are observable, either directly or indirectly, for the asset or liability through corroboration with market data for substantially the full term of the asset or liability.
Level 3:	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities (management's own assumptions about what market participants would use in pricing the asset or liability at the measurement date).

        The fair value of our cash equivalents approximates the carrying value at September 30, 2012 and December 31, 2011. In addition, funds held for construction represents monies invested in money market funds and also approximate the carrying value at September 30, 2012 and December 31, 2011. The fair value of cash equivalents and funds held for construction were determined based on Level 1 inputs.

        Pursuant to the provisions of our Credit Facility (see Note 10), any outstanding borrowings bear interest based on the prevailing interest rates. As such, the carrying value of any outstanding borrowings is presumed to approximate fair value. There were no amounts outstanding at September 30, 2012 and December 31, 2011. The fair values of our 11.5% Senior Secured Second Lien Notes (see Note 10) were $600.6 million at September 30, 2012 and $473.2 million at December 31, 2011, compared to carrying values of $556.2 million and $548.9 million at September 30, 2012 and December 31, 2011, respectively. The fair values of our Senior Secured Second Lien Notes were determined based on Level 2 inputs including quoted market prices and bond terms and conditions.

        Our Senior Secured Second Lien Notes were stated at carrying value as long-term debt in our consolidated balance sheets as of September 30, 2012 and December 31, 2011.