Annual report pursuant to Section 13 and 15(d)

Fair Value Disclosures

v2.4.0.6
Fair Value Disclosures
 12 Months Ended
Dec. 31, 2011
Fair Value Disclosures [Abstract]  
FAIR VALUE DISCLOSURES

NOTE 5 — FAIR VALUE DISCLOSURES

We account for non-recurring fair value measurements of our non-financial assets and liabilities in accordance with ASC 820-10 Fair Value Measurement and Disclosures. This guidance defines fair value, establishes a framework for measuring fair value and defines disclosures about fair value measurements. This standard establishes a three-level hierarchy for fair value measurements based upon the significant inputs used to determine fair value. Observable inputs are those which are obtained from market participants external to the company while unobservable inputs are generally developed internally, utilizing management’s estimates, assumptions and specific knowledge of the assets/liabilities and related markets. The three levels are defined as follows:

 

  • Level 1 — Valuation is based on quoted prices in active markets for identical assets and liabilities.

 

  • Level 2 —Valuation is determined from quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar instruments in markets that are not active, or by model-based techniques in which all significant inputs are observable in the market.

 

  • Level 3 — Valuation is derived from model-based techniques in which at least one significant input is unobservable and based on the company’s own estimates about the assumptions that market participants would use to value the asset or liability.

If the only observable inputs are from inactive markets or for transactions which the company evaluates as “distressed”, the use of Level 1 inputs should be modified by the company to properly address these factors, or the reliance of such inputs may be limited, with a greater weight attributed to Level 3 inputs.

A summary of our assets re-measured at fair value on December 31, 2011 and 2010 is as follows (in thousands):

 

      September 30,       September 30,       September 30,  
          Year Ended
December 31, 		 
    Hierarchy     2011     2010 (2)  

Description:

                        

Adjusted Basis of Long-Lived Real Estate Assets (1)

     Level 3     $ 68,179     $ 35,781  
       

Impairments

           $ 15,324     $ 6,451  

Initial Basis of Long-Lived Real Estate Assets

           $ 83,503     $ 42,232  
       

Adjusted Basis of Long-Term Other Assets

     Level 2     $ 952       N/A  

Impairments

           $ 848       N/A  

Initial Basis of Other Assets

           $ 1,800       N/A  

 

(1) The fair values in the table above represent only those real estate assets whose carrying values were adjusted in 2011 or 2010.

 

(2) The carrying values for these communities may have increased or decreased from the fair value reported due to activities that have occurred since the measurement date.

Financial Instruments: The fair value of our fixed-rate debt is derived from quoted market prices by independent dealers and is as follows (in thousands):

 

      September 30,       September 30,       September 30,       September 30,  
    December 31, 2011     December 31, 2010  
    Aggregate
Principal 		    Estimated  Fair
Value 		    Aggregate
Principal 		    Estimated  Fair
Value 		 

Financial Liabilities

                                

6.25% senior notes

   $ 285,000     $ 278,588     $ 285,000     $ 285,000  

7.731% senior subordinated notes

   $ 125,875     $ 110,770     $ 125,875     $ 114,861  

7.15% senior notes

   $ 200,000     $ 190,000     $ 200,000     $ 198,500  

Due to the short-term nature of other financial assets and liabilities, we consider the carrying amounts of our other short-term financial instruments to approximate fair value.