Financial Instruments

6 Months Ended

Jun. 30, 2011

Financial Instruments

Financial Instruments

NOTE 7 — Financial Instruments

Our financial instruments are classified and disclosed in one of the following three categories:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability;

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

The following table summarizes the valuation of our financial instrument pricing levels as of June 30, 2011 and December 31, 2010:

	Total			Level 1		Level 2			Level 3
June 30, 2011
Available-for-sale securities	$	222,000		$	222,000	$	—		$	—
Interest rate swap	(408,000		)	—		(408,000		)	—
December 31, 2010
Available-for-sale securities	$	140,000		$	140,000	$	—		$	—
Interest rate swap	(598,000		)	—		(598,000		)	—

Our investments in available-for-sale securities consist of mutual funds.  These investments are included in other non-current assets on our consolidated balance sheets.

At June 30, 2011 and December 31, 2010, there was $75,100,000 and $78,600,000, respectively, outstanding under our revolving credit agreement.  The borrowings under our revolving credit agreement bear interest at the variable rate described in NOTE 4 — Credit Facility and therefore we believe approximate fair value.  We are subject to interest rate risk on the variable component of the interest rate. Our risk management objective is to lock in the interest cash outflows on a portion of our debt.  As a result, as described in NOTE 4 — Credit Facility, we entered into an interest rate swap agreement effectively converting a portion of the outstanding borrowings under the revolving credit agreement to a fixed-rate, thereby hedging against the impact of potential interest rate changes on future interest expense.  At June 30, 2011 and December 31, 2010, the interest rate swap had a negative fair value of $408,000 and $598,000, respectively, which is recorded in other liabilities.  The fair value of the interest rate swap was based on quotes from the issuer of the swap and represents the estimated amounts that we would expect to pay to terminate the swap.  We recognized $54,000 and $113,000, and $(94,000) and ($261,000), net of income taxes, in unrealized gains (losses) on our interest rate swap during the three and six-month periods ended June 30, 2011 and 2010, respectively.

The carrying amounts of other financial instruments reported in the balance sheet for current assets and current liabilities approximates their fair values because of the short maturity of these instruments.