Financial Instruments

6 Months Ended

Jun. 30, 2012

Financial Instruments [Abstract]

Financial Instruments

(3)Financial Instruments

Assets recorded at fair value in the balance sheet as of June 30, 2012 are categorized based upon the level of judgment associated with the inputs used to measure their fair value.Hierarchical levels, defined by Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures, which are directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets, are as follows:

Level 1 – Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;

Level 2 – Inputs other than Level 1 inputs that are either directly or indirectly observable; and

Level 3 – Unobservable inputs, for which little or no market data exist, therefore requiring an entity to develop its own assumptions.

As of June 30, 2012 we held certain items that are required to be measured at fair value on a recurring basis.The following table summarizes the fair value of these financial assets as well as cash and cash equivalents:

			Quoted prices in
			active markets for		Significant other		Significant
			identical assets		observable inputs		unobservable inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents	$	312	$	312	$	-	$	-
Investments available-for-sale		1,953		50		-		1,903
Total	$	2,265	$	362	$	-	$	1,903

Cash and cash equivalents consist primarily of money market funds with original maturity dates of three months or less, for which we determine fair value through quoted market prices.Investments available-for-sale consist of two auction rate municipal securities (“ARS”) which are collateralized debt obligations supported by municipal agencies and do not include mortgage-backed securities.These ARS are debt instruments with stated maturities ranging from 20 to 30 years, for which the interest rate is designed to be reset through Dutch auctions approximately every 30 days.However, due to events in the credit markets, auctions for these securities have not occurred since February 2008.Both of our ARS have had a series of very small partial redemptions at par in the period from July 2009 through July 2012.As of June 30, 2012 we have continued to earn and collect interest on both of our ARS.

Because quoted prices in active markets are no longer available we determined the estimated fair values of these securities utilizing a discounted trinomial model.The model considers the probability of three potential occurrences for each auction event through the maturity date of each ARS.The three potential outcomes for each auction are (i) successful auction/early redemption, (ii) failed auction and (iii) issuer default.Inputs in determining the probabilities of the potential outcomes include but are not limited to, the securities’ collateral, credit rating, insurance, issuer’s financial standing, contractual restrictions on disposition and the liquidity in the market.The fair value of each ARS is determined by summing the present value of the probability-weighted future principal and interest payments determined by the model.Since there can be no assurances that auctions for these securities will be successful in the near future, we have classified our ARS as non-current investments.

The par and carrying values, and related cumulative unrealized loss for our non-current ARS as of June 30, 2012 are as follows:

	Par Value	Temporary Impairment	Carrying Value
Investments available-for-sale	$2,450	$547	$1,903

We consider the impairment in our ARS as temporary because we do not have the intent to sell, nor is it more-likely-than-not that we will be required to sell these securities before recovery of their cost basis.We believe that this decline in fair value is temporary, because the underlying assets of these securities are supported by municipal agencies and do not include mortgage-backed securities, have redemption features which call for redemption at 100% of par value and have a current credit rating of A or AA. The ratings on the ARS take into account credit support through insurance policies guaranteeing each of the bonds’ payment of principal and accrued interest, if it becomes necessary.In addition, both ARS have had a series of very small partial redemptions at par in the period July 2009 through July 2012. We did not record any unrealized gains or losses on our ARS in the six months ended June 30, 2012.Based on our cash and cash equivalents balance, expected operating cash flows and a $150.0 million credit line, we do not believe a lack of liquidity associated with our ARS will adversely affect our ability to conduct business, and believe we have the ability to hold the securities throughout the currently estimated recovery period. We will continue to evaluate any changes in the market value of our ARS and in the future, depending upon existing market conditions, we may be required to record an other-than-temporary decline in market value.

The following table reflects the activity for assets measured at fair value using level 3 inputs for the six months ended June 30, 2012:

Balance as of December 31, 2011	$	1,953
Transfers into level 3		-
Transfers out of level 3		-
Unrealized gains included in accumulated loss		-
Balance as of March 31, 2012		1,953
Transfers into level 3		-
Transfers out of level 3		(50)
Unrealized gains included in accumulated loss		-
Balance as of June 30, 2012	$	1,903

The fair value of our revolving line of credit approximates book value as of June 30, 2012 because our interest rates reset approximately every 30 days or less.See Note 5 for further discussion of our revolving line of credit.