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Fair Value Measurements
 12 Months Ended
Dec. 31, 2019
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. Fair value estimates are made at a specific point in time, based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of judgment, and therefore cannot be determined with precision.
Accounting standards define fair value as the price that would be received from selling an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Accounting standards establish a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value and also establishes the following three levels of inputs that may be used to measure fair value:
Level 1 - Quoted prices in active markets for identical assets or liabilities.
Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The following methods and assumptions were used by the Company in estimating fair value disclosures for financial instruments:
•
Cash and cash equivalents, restricted cash, receivables, and accounts payable: The amounts reported in the accompanying Consolidated Balance Sheets approximate fair value due to their short-term nature.
•
Notes receivable: The carrying amount of the Company's outstanding balance on its Notes receivable as of December 31, 2019 and 2018 was estimated to have a fair value of approximately $39.7 million and $0.2 million, respectively, based on the fair value of estimated future payments calculated using interest rates that approximate prevailing market rates at each period end (Level 2 inputs).
•
Debt obligations: The carrying amount of the Company’s outstanding balance on its Debt obligations as of December 31, 2019 and 2018 was estimated to have a fair value of approximately $1,262.6 million and $1,348.1 million, respectively, based on the fair value of estimated future payments calculated using interest rates that approximate prevailing market rates at each year end (Level 2 inputs).
Assets Measured and Recorded at Fair Value on a Recurring Basis
As of December 31, 2019 and 2018, the Company measured the fair value of its interest rate based on Level 2 inputs, due to the usage of inputs that can be corroborated by observable market data. The Company estimates the fair value of derivative instruments using a discounted cash flow technique and has used creditworthiness inputs that corroborate observable market data evaluating the Company’s and counterparties’ risk of non-performance. The interest rate swaps had a net fair value representing a $1.7 million net liability and a net asset of $1.7 million as of December 31, 2019 and 2018, respectively. In 2019 and 2018, $0.7 million and $0.4 million, respectively, was realized through the income statement as an adjustment to interest expense.
Assets Measured and Recorded at Fair Value on a Nonrecurring Basis
The Company determines fair value of long-lived assets held and used, such as Equipment held for operating lease and Equipment held for sale, by reference to independent appraisals, quoted market prices (e.g. an offer to purchase) and other factors. An impairment charge is recorded when the carrying value of the asset exceeds its fair value. The Company used Level 2 inputs to measure write-downs of equipment held for lease and equipment held for sale. 
 
Total Losses
 
Years Ended December 31,
 
2019
 
2018
 
(in thousands)
Equipment held for lease
$
18,132

 
$
8,893

Equipment held for sale
88

 
1,758

Total
$
18,220

 
$
10,651


Write-downs of equipment to their estimated fair values totaled $18.2 million for the year ended December 31, 2019 which included write-downs of $11.8 million due to a management decision to monetize eleven engines either by sale to a third party or for part-out and $6.4 million for the adjustment of the carrying value of seven impaired engines. As of December 31, 2019, $37.8 million book value for 16 of these engines remains within equipment held for operating lease, equipment held for sale and spare parts inventory.
Write-downs of equipment to their estimated fair values totaled $10.7 million for the year ended December 31, 2018 which included write-downs of $8.9 million for the adjustment of the carrying value of seven impaired engines and $1.8 million in third party consignment write-downs. As of December 31, 2018, included within equipment held for lease and equipment held for sale, was $18.3 million in remaining book values of six engines and six airframe parts packages.