FAIR VALUE MEASUREMENTS

12 Months Ended

Dec. 31, 2011

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

6.     FAIR VALUE MEASUREMENTS

        GAAP establishes a framework for measuring fair value, and requires certain disclosures about fair value measurements to enable the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. GAAP requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories:

Level 1:	Quoted market prices in active markets for identical assets or liabilities.
Level 2:	Observable market based inputs or unobservable inputs that are corroborated by market data.
Level 3:	Unobservable inputs that are not corroborated by market data.

        In July 2008, the Company issued $40 million in senior secured notes that were convertible into the Company's common stock. The conversion features related to the notes that gave rise to a derivative liability carried at fair value, with changes in fair value recognized currently in interest expense. As a result of the bifurcation of the conversion feature from the convertible notes, the carrying value of the convertible notes at inception was $29.9 million which was being accreted to interest expense using the effective interest method to the stated value of the convertible notes of $40 million over the three-year term of the notes. In August 2010, the convertible notes were fully repaid (Note 4).

        In January 2008, the Company entered into interest rate swap agreements to reduce future cash flow variability for approximately two years on $55 million of variable rate debt. The effect of the agreements was to convert variable-rate interest to fixed-rate interest of approximately 4.4% based on a 2-year fixed LIBOR rate. The transactions were not designated as hedges, and accordingly, the gains and losses resulting from the change in fair value from these interest rate swaps were recognized currently in interest expense. The interest rate swap agreements expired in January 2010.

        Information regarding assets and liabilities measured at fair value on a recurring basis is as follows:

Derivatives not designated as hedges:	Location of gain or (loss) recognized in consolidated statement of operations	Amount of gain recognized on derivative instruments for the Year Ended 12/31/2010
		(in thousands)
Interest rate swap agreements	Interest expense	$	63
Derivative liability related to convertible debt	Interest expense		489

        In 2011, long-lived assets with a carrying value of $1.9 million were written down to their estimated fair value less costs to sell (based on Level 3 inputs), resulting in impairment losses of $1.1 million. In 2010, assets held for sale with carrying value of $11.1 million were written down to the lower of net book value or estimated fair value less costs to sell (based on Level 3 inputs), resulting in impairment losses of $2.1 million, which were recorded in discontinued operations. Also in 2010, land with a carrying value of $4.4 million was written down to the lower of net book value or estimated fair value less costs to sell (based on Level 3 inputs), resulting in a $1.0 million impairment charge.

        The fair value of long-term debt was estimated based on rates currently available to the Company for debt with similar terms and remaining maturities. The carrying amount of long-term debt at December 31, 2011 and 2010 was $45,521,000 and $45,200,000, respectively, which approximated fair value. The carrying amount of the Company's other financial instruments approximates fair value.