Fair Value Measurements

3 Months Ended

Mar. 31, 2012

Fair Value Measurements

Fair Value Measurements

(9) Fair Value Measurements

The fair value of a financial instrument is the amount at which the instrument could be exchanged in an orderly transaction between market participants to sell the asset or transfer the liability. The inputs used by the Company to measure fair value are classified into the following fair value hierarchy:

Level 1: Quoted prices in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability through corroboration with market data at the measurement date.

Level 3: Unobservable inputs that reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date.

The Company adopted the updated guidance of the Financial Accounting Standards Board, (“FASB”), related to fair value measurements and disclosures, which requires a reporting entity to disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and to describe the reasons for the transfers. In addition, in the reconciliation for fair value measurements using significant unobservable inputs, or Level 3, a reporting entity should disclose separately information about purchases, sales, issuances and settlements. The updated guidance also requires that an entity should provide fair value measurement disclosures for each class of assets and liabilities and disclosures about the valuation techniques and inputs used to measure fair value for both recurring and non-recurring fair value measurements for Level 2 and Level 3 fair value measurements. The guidance was effective for the Company January 1, 2010, except for the disclosures about purchases, sales, issuances and settlements in the roll forward activity in Level 3 fair value measurements, which became effective for the Company January 1, 2011. The Company adopted the additional guidance with respect to the roll forward activity in Level 3 fair value measurements on January 1, 2011.

In determining the fair value of assets and liabilities that are measured on a recurring basis atMarch 31, 2012 and December 31, 2011, the Company utilized Level 2 inputs to perform such measurements related to the supplemental executive retirement plan,which were commensurate with the market approach, and utilized Level 3 inputs, which utilizes unobservable data, to measure the fair value of the contingent purchase price payable (in thousands):

		March 31,		December 31,
		2012		2011
Assets:
	Supplemental executive retirement savings plan investments - Level 2	$	8,331	$	6,516
Liabilities:
	Contingent purchase price payable - Level 3	$	3,100	$	3,100

The fair value of the supplemental executive retirement savings plan investments, which are included in prepaid and other current assets, was determined using the calculated net asset values obtained from the plan administrator and observable inputs of similar public mutual fund investments. In determining the fair value of the contingent purchase price payable,management prepared an estimate of the expected earnings of the centers acquired from NSC under various scenarios and weighted the probable outcome of each scenario using a range of expected probability of 25% to 40%.  Management discounted the results of such analysis using a discount rate of 1.6%. There have been no changes to the fair value of the contingent purchase price payable since its establishment. There were no transfers to or from Levels 1 and 2 during the three months ended March 31, 2012.

Cash and cash equivalents, receivables and payables are reflected in the financial statements at cost, which approximates fair value. The fair value of fixed rate long-term debt, with a carrying value of $98,869,000, was$106,048,000at March 31, 2012. The fair value of variable rate long-term debt approximates its carrying value of $348,689,000 at March 31, 2012. The fair value of fixed rate long-term debt, with a carrying value of $101,188,000, was $105,302,000 at December 31, 2011. The fair value of variable rate long-term debt approximated its carrying value of $357,575,000 at December 31, 2011. The fair value of fixed rate debt (Level 2) is determined based on an estimation of discounted future cash flows of the debt at rates currently quoted or offered to the Company for similar debt instruments of comparable maturities by its lenders.