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6. FAIR VALUE MEASUREMENTS
 3 Months Ended
Mar. 31, 2014
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS

NOTE 6 – FAIR VALUE MEASUREMENTS

 

FAIR VALUE MEASUREMENTS – Assets and liabilities subject to fair value measurements are required to be disclosed within a fair value hierarchy. The fair value hierarchy ranks the quality and reliability of inputs used to determine fair value. Accordingly, assets and liabilities carried at, or permitted to be carried at, fair value are classified within the fair value hierarchy in one of the following categories based on the lowest level input that is significant to a fair value measurement:

 

Level 1 – Fair value is determined by using unadjusted quoted prices that are available in active markets for identical assets and liabilities.

 

Level 2 – Fair value is determined by using inputs other than Level 1 quoted prices that are directly or indirectly observable. Inputs can include quoted prices for similar assets and liabilities in active markets or quoted prices for identical assets and liabilities in inactive markets. Related inputs can also include those used in valuation or other pricing models such as interest rates and yield curves that can be corroborated by observable market data.

 

Level 3 – Fair value is determined by using inputs that are unobservable and not corroborated by market data. Use of these inputs involves significant and subjective judgment.

 

The table below summarizes the estimated fair value of our long-term debt as follows (in thousands):

 

   As of March 31, 2014 
   Level 1   Level 2   Level 3   Total Fair Value   Total Carrying Value 
Senior First Lien Term Loan  $–   $413,768   $–   $413,768   $415,325 
Senior Second Lien Term Loan   –   $179,100   $–    179,100   $180,000 
Senior Notes   –    6,875    –    6,875    6,536 

 

    As of December 31, 2013  
    Level 1     Level 2     Level 3     Total     Total Carrying Value  
Senior Term Loan   $ –     $ 380,508     $ –     $ 380,508     $ 349,125  
Senior Notes     –       199,000       –       199,000       200,000  

 

The carrying value of our line of credit at March 31, 2014 and December 31, 2013 of $18.1 million and $0, respectively, approximated its fair value.

 

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.