XML 45 R10.htm IDEA: XBRL DOCUMENT v2.4.0.6
Fair Value Measurements
 12 Months Ended
Dec. 31, 2011
Fair Value Measurements  
Fair Value Measurements

4. Fair Value Measurements

        The Company uses the three-tier hierarchy of fair value measurement, which prioritizes the inputs used in measuring fair value based upon their degree of availability in external active markets. These tiers include: Level 1 (the highest priority), defined as observable inputs, such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3 (the lowest priority), defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

        As of December 31, 2011 and 2010, the carrying value of cash and cash equivalents, accounts receivable and accounts payable, as well as amounts included in other current assets and other current liabilities that meet the definition of financial instruments, approximated fair value due to the short-term maturities of these instruments. The carrying value of revolving borrowings under the credit facilities at December 31, 2011 approximated fair value because the borrowings have short maturities and the interest rates are based upon variable reference rates.

        The Company used a discounted cash flow technique that incorporated a market interest rate adjusted for risk profile based upon Level 3 inputs to determine the fair value of its term loans, which were classified as long-term debt, at December 31, 2010. The carrying amount reported in the consolidated balance sheet as of December 31, 2010 for the term loans was $30.0 million. The Company estimated the fair value of its term loans to be $29.6 million at December 31, 2010. The Company had no term loans outstanding as of December 31, 2011.