Fair Value Measurements

3 Months Ended

Mar. 31, 2012

Fair Value Measurements [Abstract]

Fair Value Measurements

Note 9 — Fair Value Measurements

Fair value is defined as the amount at a measurement date that would be received on the sale of an asset or paid to transfer an asset in an orderly transaction between market participants at the measurement date. The Company categorizes financial assets and liabilities into the three levels of the fair value hierarchy. The hierarchy prioritizes the inputs to valuation techniques used to measure fair value and bases the categorization within the hierarchy on the lowest level of input that is available and significant to the fair value measurement.

• Level 1 — Quoted prices in active markets for identical assets or liabilities;

• Level 2 — Observable inputs other than Level 1, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

• Level 3 — Significant unobservable inputs supported by little or no market activity or that are based upon the reporting entity's assumptions about the inputs.

Liabilities Measured at Fair Value on a Recurring Basis

The Company's liabilities required to be measured at fair value on a recurring basis, including identification of the fair value hierarchy of the valuation techniques used by the Company to determine these fair values, are as follows (in thousands):

	Fair Value Measurements Using
	Level 1		Level 2		Level 3		Total
At March 31, 2012:
Common stock warrants (1)	$	—	$	—	$	20,497	$	20,497
At December 31, 2011:
Common stock warrants (1)	$	—	$	—	$	16,622	$	16,622

(1) The fair value of common stock warrants was estimated using a Black-Scholes option-pricing model. See Note 11 for additional information regarding warrants.

There were no significant transfers in or out of either Level 1 or Level 2 fair value measurements during the three months ended March 31, 2012. During the three months ended March 31, 2012, $3.9 million of non-cash loss was recognized as a fair value adjustment within Level 3 of the fair value measurement hierarchy. The change was driven by the change in the fair value per share of the exercisable and contingent warrants primarily resulting from an increase in the Company's common share price to $12.02 at March 31, 2012 from $9.96 at December 31, 2011.

For the periods presented, there were no additional issuances of warrants or transfers in or out of the Level 3 hierarchy.

Changes in Level 3 liabilities are as follow (in thousands):

	Fair Value Measurements Using Level 3
	Three months ended March 31,  2012		Year ended December 31,  2011
Balance, beginning of period	$	16,622	$	26,193
Fair value adjustments, net		3,875		(9,571	)
Transfers in/(out)		—		—
Balance, end of period	$	20,497	$	16,622

Fair Value of Other Financial Instruments

The carrying value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, approximate fair value due to the short-term nature of these accounts. The Company had no cash equivalents at March 31, 2012 or December 31, 2011.

The carrying value and estimated fair value of the Company's convertible notes and long-term debt are as follows (in thousands):

	March 31, 2012				December 31, 2011
	Carrying Value		Fair Value		Carrying Value		Fair Value
Convertible senior notes (2008 Notes) (1)	$	66,601	$	70,518	$	65,604	$	69,880
Convertible senior secured notes (2010 Notes) (1)		—		—		34,134		37,561
Capital lease obligations		2,047		1,987		1,647		1,611

(1) The carrying value of the 2008 and 2010 notes is representative of the discounted debt component only, while the fair value is based on the market value of the respective notes, which includes the associated convertible equity features.

The estimated fair value of the 2008 Notes is based upon the quoted market price of the notes. The estimated fair value of the 2010 Notes is based upon rates available for instruments with similar risks and maturities. The fair value of capital lease obligations is based on recent lease rates adjusted for a risk premium. The estimated fair value of the convertible notes and long-term debt are measured using Level 2 inputs.

Assets Measured at Fair Value on a Nonrecurring Basis

Non-financial assets, including property, plant and equipment, goodwill and other intangible assets are measured at fair value on a non-recurring basis and are subject to annual and interim fair value adjustment. No fair value adjustments were required for either of the three months ended March 31, 2012 or March 31, 2011.