XML 108 R19.htm IDEA: XBRL DOCUMENT v2.4.0.6
Fair Value Measurements
 12 Months Ended
Dec. 31, 2011
Fair Value Measurements [Abstract]  
Fair Value Measurements

12. Fair Value Measurements

The accounting standard for fair value measurements and disclosures establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into the following three broad categories.

 

  •  

Level 1 — Quoted unadjusted prices for identical instruments in active markets to which we have access at the date of measurement.

 

  •  

Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 inputs are those in markets for which there are few transactions, the prices are not current, little public information exists or prices vary substantially over time or among brokered market makers.

 

  •  

Level 3 — Model derived valuations in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are those inputs that reflect our own assumptions regarding how market participants would price the asset or liability based on the best available information.

The following table summarizes the valuation of our interest rate swaps, foreign currency derivatives and impaired assets as of and for the year ended December 31, 2011 with pricing levels as of the date of valuation (in thousands):

 

                                 
    Total     Quoted
Market
Prices in
Active
Markets
(Level 1)		     Significant
Other
Observable
Inputs (Level 2)		     Significant
Unobservable
Inputs
(Level 3)		  

Interest rate swaps asset (liability)

   $     (19,446 )    $ —       $ (19,446 )    $ —    

Impaired long-lived assets

     1,642       —         —         1,642  

Aftermarket services goodwill

     —         —         —         —    

Fabrication goodwill

     —         —         —         —    

The following table summarizes the valuation of our interest rate swaps, foreign currency derivatives and impaired assets as of and for the year ended December 31, 2010 with pricing levels as of the date of valuation (in thousands):

 

                                 
    Total     Quoted
Market
Prices in
Active
Markets
(Level 1)		     Significant
Other
Observable
Inputs (Level 2)		     Significant
Unobservable
Inputs (Level 3)		  

Interest rate swaps asset (liability)

   $     (29,025 )    $ —       $ (29,025 )    $ —    

Foreign currency derivatives asset (liability)

     (462 )      —         (462 )      —    

Impaired long-lived assets

     70,637       —         —         70,637  

On a quarterly basis, our interest rate swaps and foreign currency derivatives are recorded at fair value utilizing a combination of the market and income approach to estimate fair value. Our estimate of the fair value of the impaired long-lived assets was based on the expected net sale proceeds as compared to other fleet units we have recently sold, as well as our review of other units that were recently for sale by third parties or the estimated component value of the equipment that we plan to use. See Note 8 for a discussion of the valuation methodology we used in connection with the goodwill impairments.