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Long-Lived Asset Impairment
6 Months Ended
Jun. 30, 2014
Long-Lived Asset Impairment  
Long-Lived Asset Impairment

10.  Long-Lived Asset Impairment

 

We review long-lived assets, including property, plant and equipment and identifiable intangibles that are being amortized, for impairment whenever events or changes in circumstances, including the removal of compressor units from our active fleet, indicate that the carrying amount of an asset may not be recoverable.

 

During the six months ended June 30, 2014, we evaluated the future deployment of our idle fleet and determined to retire and either sell or re-utilize the key components of approximately 170 idle compressor units, representing approximately 46,000 horsepower, previously used to provide services in our North America contract operations segment. As a result, we performed an impairment review and recorded a $13.7 million asset impairment to reduce the book value of each unit to its estimated fair value. The fair value of each unit was estimated based on either the expected net sale proceeds compared to other fleet units we recently sold and/or a review of other units recently offered for sale by third parties, or the estimated component value of the equipment we plan to use.

 

During the six months ended June 30, 2013, we evaluated the future deployment of our idle fleet and determined to retire and either sell or re-utilize the key components of approximately 170 idle compressor units, representing approximately 40,000 horsepower, previously used to provide services in our North America contract operations segment. As a result, we performed an impairment review and recorded a $7.1 million asset impairment to reduce the book value of each unit to its estimated fair value. The fair value of each unit was estimated based on either the expected net sale proceeds compared to other fleet units we recently sold and/or a review of other units recently offered for sale by third parties, or the estimated component value of the equipment we plan to use.

 

In July 2013, as part of our continued emphasis on simplification and focus on our core business, we sold the entity that owned our fabrication facility in the United Kingdom. As a result, we recorded impairment charges of $11.9 million during the six months ended June 30, 2013.

 

During the six months ended June 30, 2013, we evaluated other long-lived assets for impairment and recorded long-lived asset impairments of $1.1 million on these assets.