DISCLOSURES ABOUT FAIR VALUES OF FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2011

DISCLOSURES ABOUT FAIR VALUES OF FINANCIAL INSTRUMENTS [Abstract]

DISCLOSURES ABOUT FAIR VALUES OF FINANCIAL INSTRUMENTS

18. DISCLOSURES ABOUT FAIR VALUES OF FINANCIAL INSTRUMENTS

The estimated fair values of ALC's financial instruments at December 31 are as follows:

	2011				2010
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
	(In thousands)
ASSETS:
Cash and cash equivalents	$	2,652	$	2,652	$	13,364	$	13,364
Investments		1,840		1,840		4,599		4,599
Cash and escrow deposits - restricted		3,150		3,150		3,472		3,472
Other assets (long-term):
Restricted cash		1,996		1,996		3,448		3,448
Security deposits		19		19		23		23
LIABILITIES:
Accrued liabilities:
Fair value of derivative liability		-		-		920		920
Long-term debt, including current maturities	$	88,241	$	94,901	$	132,110	$	129,428

Trade receivables and payables have an estimated market value equal to their carrying value.  The fair value of long-term debt is estimated based on approximate borrowing rates currently available to ALC for debt equal to the existing debt maturities.

Investment securities available-for-sale. The carrying values of investment securities classified as available-for-sale are recorded at their fair values based on quoted market prices using public information for the issuers.

Derivative financial instruments.  ALC entered into derivative financial instruments, specifically interest rate swaps, for non-trading purposes.  ALC may use interest rate swaps from time to time to manage interest rate risk associated with floating rate debt.  As of December 31, 2010, ALC was party to two interest rate swaps with a total notional amount of $50.0 million.  ALC elected to apply hedge accounting for these interest rate swaps because they are an economic hedge of ALC's floating rate debt As of December 31, 2010, these derivative contracts had a negative net fair value based on current market conditions affecting interest rates and are recorded in accrued liabilities.  ALC held no derivative financial instruments as of December 31, 2011.

The following table presents information about ALC's assets and liabilities measured at fair value on a recurring basis as of December 31, 2011 and 2010, and indicates the fair value hierarchy of the valuation techniques utilized by ALC to determine such fair value (in thousands):

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at December 31
2011
Assets
Equity investments	$	1,028	$	-	$	-	$	1,028
2010
Assets
Equity investments	$	3,024	$	-	$	-	$	3,024
Liabilities
Derivative financial instruments		-		920		-		920

In general, fair values determined by Level 1 inputs use quoted prices in active markets for identical assets or liabilities that ALC has the ability to access.  For example, ALC's investment in available-for-sale equity securities is valued based on the quoted market price for those securities.

Fair values determined by Level 2 inputs use inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.  Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability.  For example, ALC uses market interest rates and yield curves that are observable at commonly quoted intervals in the valuation of its interest rate swap contract.

Level 3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability.  ALC's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

For the year ended December 31, 2011, ALC recognized an unrealized gain of $0.3 million on the fair value of equity investments.

For the year ended December 31, 2010, ALC recognized an unrealized gain of $1.1 million, which represents a $0.3 million unrealized gain on the fair value of the interest rate swaps and an unrealized gain of $0.8 million on its available-for-sale investments.