FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2013

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

(8) FAIR VALUE MEASUREMENTS

Accounting guidance for fair value measurements establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value.  These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

As of September 30, 2013 and December 31, 2012, the Company holds contingent consideration that is required to be measured at fair value on a recurring basis.  The contingent consideration arrangement involves the purchase of the Good Sam Travel- Assist program from a current marketing partner which requires the Company to pay an agreed upon percentage of acquisition and renewal revenue over a five year period ending on July 31, 2017.  The contingent consideration approximates the projected amount that would have been received by the marketing partner over the next five years if the prior marketing agreement was extended.  This fair value measurement was based on significant inputs not observable in the market and thus represents a Level 3 measurement as defined in ASC 820.

The Company’s liability at September 30, 2013 and December 31, 2012, measured at fair value on a recurring basis subject to the disclosure requirements from accounting guidance, was as follows:

			Fair Value Measurements at Reporting Date Using
(in thousands)			Quoted Prices in Active Markets for Identical Assets	Significant Other Observable Inputs	Significant Unobservable Inputs
Description	Amount		(Level 1)	(Level 2)	(Level 3)
As of September 30, 2013:
Contingent consideration	(1,961	)	—	—	(1,961	)
As of December 31, 2012:
Contingent consideration	(2,693	)	—	—	(2,693	)

The fair value of the contingent consideration was calculated using a discounted cash flow model.

There have been no transfers of assets or liabilities between the fair value measurement levels and there were no material re-measurements to fair value during 2013 and 2012 of assets and liabilities that are not measured at fair value on a recurring basis.

The following table presents the reported carrying value and fair value information for the Company’s Senior Secured Notes and the CW Credit Facility.  The fair values shown below for the Senior Secured Notes is based on quoted prices in the market for identical assets (Level 1), and the CW Credit Facility is based on indirect observable inputs (Level 2) (in thousands):

	9/30/2013				12/31/2012
	Carrying Value		Fair Value		Carrying Value		Fair Value
Senior Secured Notes	$	321,385	$	349,992	$	320,598	$	348,364
CW Credit Facility	—		—		11,872		11,872