(3) Fair Value Measurements

The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the Company adopted the suggested accounting guidance for the three levels of inputs that may be used to measure fair value:     

 

Level 1 —		Observable inputs such as quoted prices in active markets for identical assets or liabilities;
Level 2 —		Observable inputs, other than Level 1 inputs in active markets, that are observable either directly or indirectly; and
Level 3 —		Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions.

At March 31, 2015 and December 31, 2014, the Company did not have any financial instruments required to be recorded at fair value on a recurring basis.

The carrying amounts of cash, receivables, accounts payable and accrued liabilities approximate fair values based on their short-term nature. The fair values of the Company’s revolving credit facility and capital leases are estimated using discounted cash flow analyses, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements. Based on the borrowing rates currently available to the Company for bank loans with similar terms and average maturities, the fair value of the Company’s revolving credit facility debt and capital leases at March 31, 2015 and December 31, 2014 approximated their respective book values and are considered Level 2 in the fair value hierarchy.

The fair value of the Company’s $200.0 million aggregate principal amount of 7.875% senior notes due 2020 (the “2020 Notes” or the “Senior Notes”) is based on their latest sales price at the end of each period obtained from a third-party institution and is considered Level 2 in the fair value hierarchy, as there is not an active market for these notes.

The carrying value and the fair value of the Company’s Senior Notes are as follows:

 

		March 31, 2015				December 31, 2014
		(In thousands)
Carrying value		$	200,000			$	200,000
Fair value			211,000				206,000