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FAIR VALUE MEASUREMENTS
 6 Months Ended
Jun. 30, 2012
FAIR VALUE MEASUREMENTS
5. FAIR VALUE MEASUREMENTS

 

The Company’s fair value measurements are based upon a three-level valuation hierarchy. These valuation techniques are based upon the transparency of inputs (observable and unobservable) to the valuation of an asset or liability as of the measurement date. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs create the following fair value hierarchy:

 

· Level 1 — Valuation is based on quoted prices for identical assets or liabilities in active markets;

 

· Level 2 — Valuation is based on quoted prices for similar assets or liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for the full term of the financial instrument; and

 

· Level 3 — Valuation is based upon other unobservable inputs that are significant to the fair value measurement.

 

The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis (in thousands):

 

    June 30, 2012     December 31, 2011  
    Level 1     Level 2     Level 3     Total     Level 1     Level 2     Level 3     Total  
Liabilities                                                                
Term loan credit agreement   $ -     $ -     $ 291,878     $ 291,878     $ -     $ -     $ -     $ -  
Convertible senior notes     -       125,157       -       125,157       -       -       -       -  
    $ -     $ 125,157     $ 291,878     $ 417,035     $ -     $ -     $ -     $ -  

 

The estimated fair value of long-term debt at June 30, 2012 consists primarily of the Company’s Notes and borrowings under the Term Loan Credit Agreement and the revolving credit facility. The fair value of the Notes was based upon quoted market prices of similar liabilities in an active market. The fair value of total borrowings under the Term Loan Credit Agreement and revolving credit facility is estimated based on current quoted market prices for similar issues or debt with the same maturities. The interest rates on the Company’s bank borrowings under the revolving credit facility are adjusted regularly to reflect current market rates and thus carrying value approximates fair value.

 

The carrying amounts of accounts receivable and accounts payable reported in the Consolidated Balance Sheets approximate fair value.