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FAIR VALUE MEASUREMENTS
 12 Months Ended
Dec. 31, 2012
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS
The Company's financial instruments consist of cash and cash equivalents, marketable securities, receivables, trade payables, auction rate securities, derivative financial instruments and long-term debt. The estimated fair value of cash and cash equivalents, receivables, and trade payables approximate their carrying value due to the short maturity of these instruments and are deemed to be Level 2 in the fair value hierarchy. The fair value of the Company's unsecured senior notes (due 2020 and 2021) at December 31, 2012 were $816.0 million and $623.5 million, respectively, based on quoted market prices or available market data. The fair value of the Company's secured senior notes at December 31, 2011 was $538.5 million based on quoted market prices. The senior unsecured and senior secured notes fair value is Level 2 in the fair value hierarchy.
The Company's assets and liabilities measured at fair value on a recurring basis at December 31, 2012 and 2011 were as follows (in thousands):
December 31, 2012
 
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
 
Significant Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 
Balance at December 31, 2012
Assets:
 
 
 
 
 
 
 
Auction rate securities (i)
$
—

 
$
—

 
$
4,354

 
$
4,354

Derivative instruments (ii)
$
—

 
$
165

 
$
—

 
$
165

Marketable securities (iii)
$
11,778

 
$
—

 
$
—

 
$
11,778

Liabilities:
 
 
 
 
 
 
 
Derivative financial instruments (ii)
$
—

 
$
1,242

 
$
—

 
$
1,242


December 31, 2011
 
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
 
Significant Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 
Balance at December 31, 2011
Assets:
 
 
 
 
 
 
 
Auction rate securities (i)
$
—

 
$
—

 
$
4,245

 
$
4,245

Marketable securities (iii)
$
111

 
$
—

 
$
—

 
$
111


________________________________________________
(i)
The auction rate securities are classified as available-for-sale and the fair value of these securities was estimated utilizing a probability discounted cash flow analysis. As of December 31, 2012, all of the Company's auction rate securities continue to have AAA underlying ratings. The Company attributes the $0.3 million decline in the fair value of the securities from the original cost basis to external liquidity issues rather than credit issues. The Company assessed the decline in value to be temporary because it does not intend to sell and it is more likely than not that the Company will not have to sell the securities before their maturity. During the year ended December 31, 2012, the Company recorded an unrealized pre-tax gain of $0.1 million on its auction rate securities which is included in other comprehensive income.
(ii)
The fair value of derivatives is recorded based on the present value of cash flows using a crude oil forward rate curve.
(iii)
The fair value of marketable securities is recorded based on quoted market prices and changes in fair value were included in other comprehensive income.
The following table presents the changes in the Company's auction rate securities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the years ended December 31, 2012 and 2011 (in thousands):
 
2012
 
2011
Balance at January 1,
$
4,245

 
$
5,437

Sale of auction rate securities at par
—

 
(1,000
)
Unrealized gain (loss) included in other comprehensive income
109

 
(192
)
Balance at December 31,
$
4,354

 
$
4,245