11. 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 nonrecurring basis during the years ended December 31, 2016 and 2015, with pricing levels as of the date of valuation (in thousands): | | | | | | | | | | | | | | | | | | | | | | | | | | Year Ended December 31, 2016 | | Year Ended December 31, 2015 | | (Level 1) | | (Level 2) | | (Level 3) | | (Level 1) | | (Level 2) | | (Level 3) | Impaired long-lived assets (1) | $ | — |
| | $ | — |
| | $ | 3,109 |
| | $ | — |
| | $ | — |
| | $ | 995 |
| Impaired assets—Discontinued operations (2) | — |
| | — |
| | 13,859 |
| | — |
| | — |
| | — |
| Note receivable from the sale of a plant (3) | — |
| | — |
| | 7,037 |
| | — |
| | — |
| | — |
| Liability to exit the use of a corporate operating lease—restructuring and other charges (4) | — |
| | — |
| | 3,580 |
| | — |
| | — |
| | — |
| Long-term receivable from the sale of our Canadian Operations (5) | — |
| | — |
| | — |
| | — |
| | — |
| | 5,100 |
|
| | (1) | Our estimate of the impaired long-lived assets’ fair value during the years ended December 31, 2016 and 2015 was primarily 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. |
| | (2) | Our estimate of the fair value of the impaired assets of Belleli CPE, which were classified as discontinued operations, during the year ended December 31, 2016 was based on the proceeds received from the sale of Belleli CPE, net of selling costs. |
| | (3) | Our estimate of the fair value of the note receivable from the sale of our plant in Argentina during the year ended December 31, 2016 was discounted based on a settlement period, with annual payments, of 2.6 years and a discount rate of 5%. |
| | (4) | The fair value of our liability to exit the use of a corporate operating lease relating to restructuring activities during the second quarter of 2016 was estimated based on an incremental borrowing rate of 3% and remaining lease payments, net of estimated sublease rentals, through February 2018. |
| | (5) | In April 2015, we accepted an offer to early settle the outstanding note receivable due to us relating to the previous sale of our Canadian contract operations and aftermarket services businesses (“Canadian Operations”) for $5.1 million. |
|