v2.3.0.15
FAIR VALUE OF FINANCIAL INSTRUMENTS
9 Months Ended
Sep. 30, 2011
FAIR VALUE OF FINANCIAL INSTRUMENTS 
FAIR VALUE OF FINANCIAL INSTRUMENTS

15. FAIR VALUE OF FINANCIAL INSTRUMENTS

        Financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, long-term debt, and commodity forward purchase contracts. The carrying amount of cash and cash equivalents, accounts receivable and accounts payable approximate their fair value because of the nature of such instruments. The fair values of our 9.0% senior secured notes are based on quoted market values. Due to limited trading activity for our 7.125% senior notes due 2013, our 9.5% senior notes due 2014, and our 10.75% senior subordinated notes due 2016, the fair values of those notes were historically estimated based on a weighted average of trading activity before and after the applicable reporting date. Our ABL Revolver is fair valued using comparable recent third party transactions. Our natural gas forward purchase contracts are fair valued with Level 2 inputs based on quoted market values for similar but not identical financial instruments.

        The FASB ASC 820-10 establishes a fair value hierarchy that prioritizes observable and unobservable inputs to valuation techniques used to measure fair value. These levels, in order of highest to lowest priority are described below:

  •         Level 1—Quoted prices (unadjusted) in active markets for identical assets or liabilities at the measurement date.

            Level 2—Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.

            Level 3—Prices that are unobservable for the asset or liability and are developed based on the best information available in the circumstances, which might include the company's own data.

 
   September 30, 2011   December 31, 2010  
(In thousands)
  Carrying
Amount 		  Fair
Value 		  Carrying
Amount 		  Fair
Value 		 

Level 1:

                          

Long-term debt:

                          
 

9.0% senior secured notes due 2017

   $ 497,365   $ 514,375   $ 497,085   $ 538,750  

Level 2:

                          

Long-term debt:

                          
 

10.75% senior subordinated notes due 2016

     41,454     44,106     41,412     43,644  
 

7.125% senior notes due 2013

     —     —     8,965     8,885  
 

9.5% senior notes due 2014

     —     —     13,162     13,235  
 

ABL Revolver due 2016

     36,402     36,402     —     —  

Derivative instruments:

                          
 

Natural gas forward purchase contracts liability (asset)

     230     230     (425 )   (425 )