NOTE 9 - FAIR VALUE MEASUREMENTS
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6 Months Ended |
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Jun. 30, 2011
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Fair Value Disclosures [Text Block] |
NOTE
9 – FAIR VALUE MEASUREMENTS
We
utilize a three-tier fair value hierarchy, which prioritizes
the inputs used in measuring fair value. These tiers are:
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.
Our
condensed consolidated balance sheets include the following
financial instruments: cash and cash equivalents,
receivables, trade accounts payable, capital leases,
long-term debt and other liabilities. We consider
the carrying amounts of cash and cash equivalents,
receivables, other current assets and current liabilities to
approximate their fair value because of the relatively short
period of time between the origination of these instruments
and their expected realization or
payment. Additionally, we consider the carrying
amount of our capital lease obligations to approximate their
fair value because the weighted average interest rate used to
formulate the carrying amounts approximates current market
rates.
At
June 30, 2011, based on Level 2 inputs primarily related to
comparable market prices, we determined the fair values of
our senior secured term loan and our senior unsecured notes,
both issued on April 6, 2010, to be $280.7 million and $199.5
million, respectively. The carrying amount of the
senior secured term loan and the senior unsecured notes at
June 30, 2011 was $281.4 million and $200.0 million,
respectively.
The
Company maintains interest rate swaps which are required to
be recorded at fair value on a recurring basis. At June 30,
2011 the fair value of these swaps of a liability of $8.4
million was determined using Level 2 inputs. More
specifically, the fair value was determined by calculating
the value of the difference between the fixed interest rate
of the interest rate swaps and the counterparty’s
forward LIBOR curve, which would be the input used in the
valuations. The forward LIBOR curve is readily
available in the public markets or can be derived from
information available in the public markets.
On
January 1, 2009, the Company adopted, without material impact
on its consolidated financial statements, the provisions of
FASB ASC Topic 820 related to nonfinancial assets and
nonfinancial liabilities that are not required or permitted
to be measured at fair value on a recurring basis, which
include those measured at fair value including goodwill
impairment testing, indefinite-lived intangible assets
measured at fair value for impairment assessment,
nonfinancial long-lived assets measured at fair value for
impairment assessment, asset retirement obligations initially
measured at fair value, and those initially measured at fair
value in a business combination.
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