XML 64 R15.htm IDEA: XBRL DOCUMENT v2.4.0.6
FAIR VALUE MEASUREMENTS
 3 Months Ended
Mar. 31, 2012
FAIR VALUE MEASUREMENTS  
FAIR VALUE MEASUREMENTS

8.  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 presents our assets and liabilities measured at fair value on a recurring basis as of March 31, 2012 and December 31, 2011, with pricing levels as of the date of valuation (in thousands):

 

 

 

March 31, 2012

 

December 31, 2011

 

 

 

(Level 1)

 

(Level 2)

 

(Level 3)

 

(Level 1)

 

(Level 2)

 

(Level 3)

 

Interest rate swaps asset (liability)

 

$

—

 

$

(15,531

)

$

—

 

$

—

 

$

(19,446

)

$

—

 

 

On a quarterly basis, our interest rate swaps are recorded at fair value utilizing a combination of the market approach and income approach to estimate fair value based on forward LIBOR curves.

 

The following table presents our assets and liabilities measured at fair value on a nonrecurring basis for the three months ended March 31, 2012 and 2011, with pricing levels as of the date of valuation (in thousands):

 

 

 

Three Months Ended March 31, 2012

 

Three Months Ended March 31, 2011

 

 

 

(Level 1)

 

(Level 2)

 

(Level 3)

 

(Level 1)

 

(Level 2)

 

(Level 3)

 

Impaired long-lived assets

 

$

—

 

$

—

 

$

1,800

 

$

—

 

$

—

 

$

—

 

 

Our estimate of the fair value of the impaired long-lived assets was based on the expected net sale proceeds 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.