Description
Judgments and Uncertainties
Effect if Actual Results Differ
from Assumptions
Impairment of Long-Lived Assets
We periodically evaluate whether the
carrying value of long-lived assets
has been impaired when
circumstances indicate the carrying
value of those assets may not be
recoverable. This evaluation is based
on undiscounted cash flow
projections expected to be realized
over the remaining useful life of the
primary asset. The carrying amount
is not recoverable if it exceeds the
sum of undiscounted cash flows
expected to result from the use and
eventual disposition of the asset. If
the carrying value is not recoverable,
the impairment loss is measured as
the excess of the asset’s carrying
value over its fair value.
Our impairment analyses may
require management to apply
judgment in estimating future cash
flows as well as asset fair values,
including forecasting useful lives
of the assets, assessing the
probability of different outcomes,
and selecting the discount rate that
reflects the risk inherent in future
cash flows. We assess the fair
value of long-lived assets using
commonly accepted techniques,
and may use more than one
method, including, but not limited
to, recent third party comparable
sales and discounted cash flow
models. These techniques are also
used when allocating the purchase
price to acquired assets and
liabilities.
Using the impairment review
methodology described herein, we
have not recorded any impairment
charges on long-lived assets
during the year ended December
31, 2011. If actual results are not
consistent with our assumptions
and estimates or our assumptions
and estimates change due to new
information, we may be exposed
to an impairment charge.
Impairment of Investments in Unconsolidated Affiliates
We evaluate our investments in
unconsolidated affiliates for
impairment whenever events or
changes in circumstances indicate, in
management’s judgment, that the
carrying value of such investment
may have experienced a decline in
value. When evidence of loss in
value has occurred, we compare the
estimated fair value of the
investment to the carrying value of
the investment to determine whether
an impairment has occurred.
Our impairment loss calculations
require management to apply
judgment in estimating future cash
flows and asset fair values,
including forecasting useful lives
of the assets, assessing the
probability of differing estimated
outcomes, and selecting the
discount rate that reflects the risk
inherent in future cash flows. We
assess the fair value of our
unconsolidated affiliates using
commonly accepted techniques,
and may use more than one
method, including, but not limited
to, recent third party comparable
sales and discounted cash flow
models.
Using the impairment review
methodology described herein, we
have not recorded any impairment
charges on investments in
unconsolidated affiliates during
the year ended December 31,
2011. If the estimated fair value of
our unconsolidated affiliates is
less than the carrying value, we
would recognize an impairment
loss for the excess of the carrying
value over the estimated fair
value.
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