Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2013

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Note 11—Fair Value of Financial Instruments

        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 following table presents information about the Company's assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2013 and December 31, 2012 and indicate the fair value hierarchy of the valuation techniques utilized to determine such values. For some assets, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. When this is the case, the asset is categorized based on the level of the most significant input to the fair value measurement. The Company's assessment of the significance of a particular input to the fair value measurement requires judgment and considers factors specific to the assets being valued.

	March 31, 2013
	Fair Value Measurements Using
							Total Fair Value
(in thousands)	Level 1		Level 2		Level 3
Assets:
Interest rate cap	$	—	$	9	$	—	$	9
Liabilities:
Interest rate swaps	$	—	$	5,546	$	—	$	5,546

	December 31, 2012
	Fair Value Measurements Using
							Total Fair Value
(in thousands)	Level 1		Level 2		Level 3
Assets:
Interest rate cap	$	—	$	12	$	—	$	12
Liabilities:
Interest rate swaps	$	—	$	6,615	$	—	$	6,615

        Below is a summary of the Company's valuation techniques for Level 1 and Level 2 financial assets and liabilities:

        Equity securities—Changes in the fair value of trading securities are recorded in other income (loss) and determined using observable market prices. For the three months ended March 31, 2013, a gain of $109 thousand was recorded related to trading securities held at the reporting date. Realized losses of $4 thousand on the sale of available-for-sale securities were recorded in other income (loss) during the three months ended March 31, 2013 and were determined using the specific identification method.

        Interest rate cap—The fair value of the interest rate cap was determined using quoted dealer prices for similar contracts in active over-the-counter markets.

        Interest rate swaps—The fair value of interest rate swaps were determined using quoted dealer prices for similar contracts in active over-the-counter markets.

        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.

        Debt—Debt associated with the Company's 2011 term loan A and term loan B in the amount of $656.6 million and $978.2 million, respectively, at March 31, 2013 and $757.0 million and $1.128 billion, respectively, at December 31, 2012 was carried at cost. There were no borrowings outstanding under the Revolver at March 31, 2013 and December 31, 2012. Debt associated with the Company's 2020 Notes in the amount of $496.6 million and $496.5 million at March 31, 2013 and December 31, 2012, respectively, and the 2021 Notes in the amount of $450.0 million at March 31, 2013 was carried at cost. The estimated fair value of the Company's term loan A, term loan B, 2020 Notes and 2021 Notes was $657.0 million, $983.3 million, $543.1 million and $461.2 million at March 31, 2013, respectively, based on similar transactions and yields in an active market for similarly rated debt (Level 2).