FAIR VALUE MEASUREMENTS:

9 Months Ended

Sep. 30, 2013

8. FAIR VALUE MEASUREMENTS:

Accounting guidance provides for valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). A fair value hierarchy using three broad levels prioritizes the inputs to valuation techniques used to measure fair value. The following is a brief description of those three levels:

· Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

· Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

· Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.

The carrying value and fair value of our notes and debentures for the periods presented (in thousands):

	As of September 30, 2013				As of December 31, 2012
	Carrying Value		Fair Value		Carrying Value		Fair Value
Level 2:
9.25% Senior Second Lien Notes due 2017	$	491,709	$	531,875	$	490,517	$	552,500
8.375% Senior Notes due 2018	235,129		237,506		234,853		265,886
6.125% Senior Unsecured Notes due 2022	500,000		503,125		500,000		533,125
5.375% Senior Unsecured Notes due 2021	600,000		574,500		—		—
Term Loan A	55,000		54,753		263,875		262,556
Term Loan B	398,000		394,178		580,850		589,125
Deerfield Bank Credit Facility	24,694		24,898		19,950		19,950

Not included in the table above are the fair values and carrying values for our 3.0% Notes, which as discussed further in Note 4. Notes Payable and Commercial Bank Financing, were converted and settled in cash in October 2013 for $10.5 million. We believe the fair value of 3.0% Notes approximates the carrying value based on discounted cash flows using Level 3 inputs described above, as of December 31, 2012. The fair values and carrying values of the outstanding amounts under the Cunningham Bank Credit Facility totaling $21.5 million, are also not include in the table above. The outstanding balance was repaid in full on October 1, 2013. We believe the fair value approximates the carrying value based on discounted cash flows using Level 2 inputs.

Additionally, Cunningham, one of our consolidated VIEs has investments in marketable securities which are recorded at fair value using Level 1 inputs described above. As of September 30, 2013 and December 31, 2012, $9.0 million and $6.4 million, respectively, were included in other assets in our consolidated balance sheets.

The carrying amounts of working capital items such as, cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, approximate fair value due to their short-term nature.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References+ Details