Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2015

Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level hierarchy has been established for valuing assets and liabilities based on how transparent (observable) the inputs are that are used to determine fair value, with the inputs considered most observable categorized as Level 1 and those that are the least observable categorized as Level 3. Hierarchy levels are defined as follows:



Level 1:		Quoted prices in active markets for identical assets and liabilities;
Level 2:		Quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and
Level 3:		Unobservable inputs that are supported by little or no market data which require the reporting entity to develop its own assumptions.

The Company had no assets or liabilities measured at fair value on a recurring basis as of March 31, 2015 or December 31, 2014. The following methods and assumptions were used to estimate the fair value for which the fair value option was not elected:

Cash and cash equivalents, receivables and accounts payable—The carrying amounts reported in the balance sheet approximate fair value. Cash equivalents represent highly-liquid instruments and constitute Level 1 fair value measurements.

Debt—All of the Company's outstanding debt is carried at cost. There were no borrowings outstanding under the revolver at March 31, 2015 or December 31, 2014. The estimated fair value of the Company's debt is based on observable market data (Level 2). The carrying amounts and fair values of the Company's debt (excluding capital lease obligations, equipment financing agreements and debt discount and debt issuance costs on the revolver of $1.4 million and $0.2 million, respectively, as of March 31, 2015 and $1.5 million and $0.3 million, respectively, as of December 31, 2014) are presented below (in thousands):



	March 31, 2015				December 31, 2014
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
2011 term loan B (1)	$	953,405	$	591,798	$	951,583	$	755,936
9.50% senior secured notes (2)	$	950,318	$	579,575	$	949,537	$	759,025
11.0%/12.0% senior secured PIK toggle notes (3)	$	342,891	$	33,250	$	342,631	$	113,750
9.875% senior notes (4)	$	378,951	$	22,310	$	378,664	$	77,600
8.50% senior notes (5)	$	377,062	$	22,038	$	442,481	$	85,500

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(1)	Net of debt discount and debt issuance costs of $11.1 million and $13.7 million, respectively, as of March 31, 2015 and $11.9 million and $14.7 million, respectively, as of December 31, 2014.


(2)	Net of debt discount and debt issuance costs of $2.6 million and $17.1 million, respectively, as of March 31, 2015 and $2.7 million and $17.8 million, respectively, as of December 31, 2014.


(3)	Net of debt issuance costs of $7.1 million and $7.4 million as of March 31, 2015 and December 31, 2014, respectively.


(4)	Net of debt discount and debt issuance costs of $2.1 million and $6.9 million, respectively, as of March 31, 2015 and $2.2 million and $7.1 million, respectively, as of December 31, 2014.


(5)	Net of debt issuance costs of $6.2 million and $7.5 million as of March 31, 2015 and December 31, 2014, respectively.

- 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.

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