SAE INTERNATIONAL AND SUBSIDIARIES Notes to the Consolidated Financial Statements (Continued) Note 16 - Fair Values Measured on a Recurring Basis (Continued) The Organization's interest rate swap is measured at fair value as determined on a discounted cash flow method using the applicable inputs from the forward interest rate yield curves with the differential between the forward rate and the original stated interest rate of the swap discounted back from the settlement date of the contract to December 31, 2012. The fair value of the interest rate swap contract was a liability of approximately $46,000 at December 31, 2012. The corresponding expense is recorded as a component of nonoperating activities in the consolidated statement of activities. 62 Page 36