v2.4.0.6
Fair Value of Financial Instruments
 6 Months Ended
Jun. 30, 2012
Fair Value of Financial Instruments [Abstract]  
FAIR VALUE OF FINANCIAL INSTRUMENTS

NOTE 9 — FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company’s financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable, long-term debt and derivative instruments. The carrying values of cash and cash equivalents, accounts receivable and accounts payable are considered to be representative of their respective fair values because of the short maturity of these instruments. Based on the terms of the Company’s debt instruments, as amended, that are outstanding as of June 30, 2012 and December 31, 2011, respectively, the carrying values are considered to approximate their respective fair values. See Note 7 for the terms and carrying values of the Company’s various debt instruments.

The following table presents the Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2012 and December 31, 2011, respectively, and are categorized using the fair value hierarchy. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value and is described below:

 

  •  

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

 

  •  

Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

 

  •  

Level 3 inputs are unobservable inputs for the asset or liability.

The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement in its entirety. There were no transfers between levels 1, 2, or 3 during 2012 or 2011.

 

                                 
    Balance at
June 30,
2012		     Quoted Prices in
Active Markets for
Identical Assets
(Level 1)		     Significant Other
Observable Inputs
(Level 2)		     Significant
Unobservable
Inputs
(Level 3)		  

Interest rate swap liability

   $ 1,088,000       —       $ 1,088,000       —    
         
    Balance at
December 31,
2011		     Quoted Prices in
Active Markets for
Identical Assets
(Level 1)		     Significant Other
Observable Inputs
(Level 2)		     Significant
Unobservable
Inputs
(Level 3)		  

Interest rate swap liability

   $ 1,307,000       —       $ 1,307,000       —    

The valuation of the interest rate swap agreement is based on quoted prices from the counterparty that values this instrument using proprietary models and market information at the date presented, as well as consideration of the impact of the risk of non-performance of the counterparty and the Company.

There were no non-financial assets or liabilities subject to measurement at fair value on a non-recurring basis at June 30, 2012 and December 31, 2011, respectively.