Fair Value

9 Months Ended

Sep. 30, 2011

Fair Value

Fair Value

13. Fair Value

Aggregate information concerning assets and liabilities at September 30, 2011 and December 31, 2010 that are measured at fair value on a recurring basis is presented below (in thousands):

	September 30, 2011
				Fair Value Measurements Using
	Total Fair Value Measurements			Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)			Significant Other  Observable Inputs (Level 2)
Investments classified as current assets:
Investments available for sale:
Bonds and notes:
U.S. Government and agencies	$	797,157		$	797,157		$	–
All other corporates		7,829			7,829			–
Other		861			–			861
Non-current investments:
Investments available for sale:
Bonds and notes:
U.S. Government-Sponsored Enterprises		730,377			–			730,377
All other corporates		122,934			38,618			84,316
Equity securities:
Common stocks:
Banks, trusts and insurance companies		46,510			46,510			–
Industrial, miscellaneous and all other		1,169,348			1,169,348			–
Other		971			–			971
Investments in associated companies		1,103,458			1,103,458			–
Total	$	3,979,445		$	3,162,920		$	816,525
Other current liabilities	$	(1,274	)	$	(1,274	)	$	–

	December 31, 2010
				Fair Value Measurements Using
	Total Fair Value Measurements			Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)			Significant Other  Observable Inputs (Level 2)
Investments classified as current assets:
Investments available for sale:
Bonds and notes:
U.S. Government and agencies	$	247,017		$	247,017		$	–
All other corporates		6,572			6,324			248
Non-current investments:
Investments available for sale:
Bonds and notes:
U.S. Government and agencies		7,716			–			7,716
U.S. Government-Sponsored Enterprises		823,383			–			823,383
All other corporates		192,533			150,193			42,340
Equity securities:
Common stocks:
Banks, trusts and insurance companies		49,276			49,276			–
Industrial, miscellaneous and all other		2,593,331			2,593,331			–
Investments in associated companies		1,314,227			1,314,227			–
Total	$	5,234,055		$	4,360,368		$	873,687
Other current liabilities	$	(2,413	)	$	(1,878	)	$	(535	)

At September 30, 2011 and December 31, 2010, the Company did not have significant fair value measurements using unobservable inputs (Level 3) for assets and liabilities measured at fair value on a recurring basis.

The estimated fair values for securities measured using Level 1 inputs are determined using publicly quoted market prices in active markets.  The Company has a segregated portfolio of mortgage pass-through certificates issued by U.S. Government agencies (GNMA) and by U.S. Government-Sponsored Enterprises (FHLMC or FNMA) which are carried on the balance sheet at their estimated fair value.  Although the markets that these types of securities trade in are generally active, market prices are not always available for the identical security.  The fair value of these investments are based on observable market data including benchmark yields, reported trades, issuer spreads, benchmark securities, bids and offers.  The estimates of fair value of the portfolios of mortgage pass-through certificates and corporate bonds are considered to be based on Level 2 inputs.

At September 30, 2011, the Company did not have significant assets and liabilities that were measured at fair value on a nonrecurring basis.  Aggregate information concerning assets and liabilities at December 31, 2010 that are measured at fair value on a nonrecurring basis is presented below (in thousands):

	December 31, 2010
			Fair Value Measurements Using
	Total Fair Value Measurements		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Long-lived assets held and used (a)	$	20,600	$	–	$	20,600	$	–
Long-lived assets held for sale (b)		7,000		–		7,000		–
Other non-current investments (c)		2,200		–		–		2,200

(a)   As more fully discussed in the 2010 10-K, the Company evaluated for impairment the carrying value of the Myrtle Beach project's real estate assets, recorded an impairment charge and reduced the carrying amount to its fair value.  As of December 31, 2010, the Company also wrote down to fair value one of its real estate projects based on an appraisal and prices for similar assets, and recognized an impairment charge, which is included in selling, general and other expenses.

(b)   Consists of a corporate aircraft for which the fair value was primarily based on prices for similar assets.

(c)   Represents an investment in a non-public security accounted for under the cost method of accounting for which the Company primarily reviewed issuer financial statements to determine its fair value.

Included in net securities gains (losses) in the consolidated statement of operations for the three and nine month periods ended September 30, 2011 are impairment charges of $90,000 and $1,595,000, respectively, primarily for a publicly traded security.  Included in net securities gains (losses) in the consolidated statement of operations for the three and nine month periods ended September 30, 2010 are impairment charges of $188,000 and $1,707,000, respectively, all of which were for non-agency mortgage-backed bond securitizations.

The following table presents fair value information about certain financial instruments, whether or not recognized on the balance sheet.  Fair values are determined as described below.  These techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows.  The fair value amounts presented do not purport to represent and should not be considered representative of the underlying "market" or franchise value of the Company.  The methods and assumptions used to estimate the fair values of each class of the financial instruments described below are as follows:

(a) Investments:  The fair values of marketable equity securities and fixed maturity securities (which include securities sold not owned) are substantially based on quoted market prices.

Other non-current investments which do not trade publicly include private equity fund investments where the Company's voting interest isn't large enough to apply the equity method of accounting, a portfolio of non-agency mortgage-backed bond securitizations where the underlying assets are various individual mortgage loans, the zero-coupon component of the FMG Note and various other non-publicly traded investments.  For the investments in private equity funds and the FMG zero-coupon note, the Company has concluded that the carrying amount approximates the fair value of these investments based primarily on reviews of issuer financial statements or statements of net asset value.  For the bond securitization portfolio, future cash flows are re-estimated on a regular basis for each security to determine if impairment charges are required; accordingly the Company has concluded that the carrying amount of these securities approximates their fair values.  The fair values of the Company's other non-publicly traded investments that are accounted for under the cost method were assumed to be at least equal to the carrying amount.  For these non-publicly traded investments, the Company reviews cash flows and/or other information obtained from investee companies on a regular basis to determine if impairment charges are required.

(b) Cash and cash equivalents:  For cash equivalents, the carrying amount approximates fair value.

(c) Notes receivable:  The fair values of variable rate notes receivable are estimated to be the carrying amount.

(d) Long-term and other indebtedness:  The fair values of non-variable rate debt are estimated using quoted market prices and estimated rates that would be available to the Company for debt with similar terms.  The fair value of variable rate debt is estimated to be the carrying amount.  The fair value of the Myrtle Beach project's debt at December 31, 2010 is the amount paid by the Company's subsidiary for the collateralized property in the foreclosure sale.

(e) Swap agreements:  The fair value of the interest rate swap agreement at December 31, 2010 was based on rates then available for similar agreements.  At September 30, 2011, the Company did not have any swap agreements.

The carrying amounts and estimated fair values of the Company's financial instruments at September 30, 2011 and December 31, 2010 are as follows (in thousands):

	September 30, 2011				December 31, 2010
	Carrying		Fair		Carrying			Fair
	Amount		Value		Amount			Value
Financial Assets:
Investments:
Current	$	810,972	$	810,972	$	264,572		$	264,572
Non-current		2,258,897		2,258,897		3,832,659			3,832,659
Cash and cash equivalents		306,270		306,270		441,340			441,340
Notes receivable:
Current		1,788		1,788		740			740
Non-current		13,531		13,531		2,633			2,633
Financial Liabilities:
Indebtedness:
Current		501,150		501,150		543,780			461,350
Non-current		1,471,294		1,568,814		1,548,469			1,677,656
Securities sold not owned		1,274		1,274		1,878			1,878
Swap agreements:
Interest rate swaps		–		–		(535	)		(535	)