Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2012

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Fair value is the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). We utilize market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated or generally unobservable.

The market approach is applied for recurring fair value measurements and endeavors to utilize the best available information. Accordingly, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Fair value balances are classified based on the observability of those inputs.

A fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). Level 2 measurements utilize observable inputs in markets other than active markets.

In estimating the fair value of the financial instruments presented, we used the following methods and assumptions:

Cash and cash equivalents

For cash and cash equivalents, we believe that the carrying value is a reasonable estimate of fair value due to the short-term nature of the instruments.

Restricted cash

Restricted cash is comprised of certificates of deposit that are pledged for various letters of credit secured by the Company. We deem the carrying value to be a reasonable estimate of fair value due to the nature of these instruments.

Marketable securities

Equity and debt securities are classified as available-for-sale securities and are valued using quoted prices in active markets.

Long-term debt

The fair value of long-term debt was estimated based on the current rates available to us for similar debt of the same remaining maturities and consideration of our default and credit risk.

Interest rate swap agreements and foreign currency purchase agreements

The fair value of the interest rate swap agreements and forward currency purchase agreements were estimated based on market value quotes received from the counter parties to the agreements.

The fair values of our financial instruments as of December 31, 2012 are presented in the following table:

	Fair Value Measurements Using
(in thousands)	Level 1		Level 2		Level 3		Fair Value
Financial Assets:
Cash and cash equivalents	$	148,858	$	—	$	—	$	148,858
Restricted cash	—		22,117		—		22,117
Equity securities	22,168		—		—		22,168
Total Financial Assets	$	171,026	$	22,117	$	—	$	193,143
Financial Liabilities:
Total debt	—		899,258		—		899,258
Total Financial Liabilities	$	—	$	899,258	$	—	$	899,258
Derivatives:
Asset for interest rate swap agreements	$	—	$	6,486	$	—	$	6,486

The fair values of our financial instruments as of December 31, 2011 are presented in the following table:

	Fair Value Measurements Using
(in thousands)	Level 1		Level 2		Level 3		Fair Value
Financial Assets:
Cash and cash equivalents	$	259,266	$	—	$	—	$	259,266
Restricted cash	—		22,044		—		22,044
Equity securities	20,884		—		—		20,884
Total Financial Assets	$	280,150	$	22,044	$	—	$	302,194
Financial Liabilities:
Total debt	—		828,990		—		828,990
Total Financial Liabilities	$	—	$	828,990	$	—	$	828,990
Derivatives:
Liability for interest rate swap agreements	$	—	$	5,078	$	—	$	5,078

The following non-financial instruments were measured at fair value, on a nonrecurring basis, as of and for the year ended December 31, 2012:

			Fair Value Measurements Using
			Level 1		Level 2		Level 3		Impairment Losses
Assets of discontinued operations	$	794	$	794	$	—	$	—	$	16,168
Property and equipment, net	—		—		—		—		21,047
Other intangible assets, net	—		—		—		—		1,425
Investment in affiliates, net	—		—		—		—		1,246
	$	794	$	794	$	—	$	—	$	39,886

The following non-financial instruments were measured at fair value, on a nonrecurring basis, as of and for the year ended December 31, 2011:

			Fair Value Measurements Using
			Level 1		Level 2		Level 3		Impairment Losses
Assets of discontinued operations	$	55,516	$	35,603	$	—	$	19,913	$	166,588
Property and equipment, net	—		—		—		—		5,706
Other intangible assets, net	—		—		—		—		3,643
Investment in affiliates, net	7,786		—		—		7,786		30,722
	$	63,302	$	35,603	$	—	$	27,699	$	206,659

The following non-financial instruments were measured at fair value, on a nonrecurring basis, as of and for the year ended December 31, 2010:

			Fair Value Measurements Using
			Level 1		Level 2		Level 3		Impairment Losses
Assets of discontinued operations	$	270,293	$	92,350	$	—	$	177,943	$	176,768
Property and equipment, net	—		—		—		—		926
Other intangible assets, net	—		—		—		—		412
Investment in affiliates, net	18,383		—		—		18,383		16,301
	$	288,676	$	92,350	$	—	$	196,326	$	194,407

We recorded non-cash impairment charges of $16.2 million, $166.6 million and $176.8 million for the years ended December 31, 2012, 2011 and 2010, respectively, in our assets of discontinued operations primarily due to the disposition or wind down of our discontinued operations. See Note 18 - Discontinued Operations for further discussion. Next, we recorded non-cash impairment charges of $21.0 million, $5.7 million and $0.9 million for the years ended December 31, 2012, 2011 and 2010, respectively, in our property and equipment, net primarily due to land and internally developed software. Further, we recorded non-cash impairment charges of $1.4 million, $3.6 million and $0.4 million for the years ended December 31, 2012, 2011 and 2010, respectively, in our other intangible assets, net primarily due to changes in the useful life of an intangible asset.

Finally, we recorded non-cash impairment charges of $1.2 million, $30.7 million and $16.3 million for the years ended December 31, 2012, 2011 and 2010, respectively. For the years ended December 31, 2012 and 2011, the impairment charges in our investments in affiliates, net, was primarily due to other than temporary loss in value from the absence of an ability to recover the carrying amount of the investment from the under-performance of several investments in affiliates and continued changes in the regulatory environment. For the year ended December 31, 2010, the impairment charge was primarily due to a $14.5 million charge related to our acquisition of Dorado. These non-cash impairment charges relate to investments for which there is no material income/loss included in equity in earnings of affiliates, net of tax. Therefore, they are included in gain/(loss) on investment and other, net in the accompanying consolidated statements of operations.