Summary Of Significant Accounting Policies (Policy) | 12 Months Ended |
Dec. 31, 2014 |
Summary Of Significant Accounting Policies [Abstract] | |
Basis of Presentation | |
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Basis of Presentation |
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The consolidated financial statements include the accounts of Superior Energy Services, Inc. and subsidiaries (the Company). All significant intercompany accounts and transactions are eliminated in consolidation. Certain previously reported amounts have been reclassified to conform to the 2014 presentation. |
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Business | |
Business |
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The Company provides a wide variety of services and products to the energy industry related to the exploration, development and production of oil and natural gas. The Company serves major, national and independent oil and natural gas companies throughout the world. The Company’s operations are managed and organized by business units, which offer products and services within the various phases of a well’s economic life cycle. The Company reports its operating results in four business segments: Drilling Products and Services; Onshore Completion and Workover Services; Production Services; and Technical Solutions (formerly, Subsea and Technical Solutions). Given the Company’s history of growth and long-term strategy of expanding geographically, the Company also provides supplemental segment revenue information in three geographic areas: U.S. land; Gulf of Mexico; and International. |
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Use of Estimates | |
Use of Estimates |
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The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make significant estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
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Major Customers and Concentration of Credit Risk | |
Major Customers and Concentration of Credit Risk |
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The majority of the Company’s business is conducted with major and independent oil and gas companies. The Company evaluates the financial strength of its customers and provides allowances for probable credit losses when deemed necessary. |
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The market for the Company’s services and products is the oil and gas industry in the U.S. land and Gulf of Mexico areas and select international market areas. Oil and gas companies make capital expenditures on exploration, development and production operations. The level of these expenditures historically has been characterized by significant volatility. |
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The Company derives a large amount of revenue from a small number of major and independent oil and gas companies. There were no customers that exceeded 10% of total revenue in 2014. In 2013 and 2012, EOG Resources, Inc. accounted for approximately 10% and 13%, respectively, of total revenue, primarily within the Onshore Completion and Workover segment. |
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In addition to trade receivables, other financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and derivative instruments used in hedging activities. The financial institutions in which the Company transacts business are large, investment grade financial institutions which are “well capitalized” under applicable regulatory capital adequacy guidelines, thereby minimizing its exposure to credit risks for deposits in excess of federally insured amounts and for failure to perform as the counterparty on interest rate swap agreements. The Company periodically evaluates the creditworthiness of financial institutions that may serve as a counterparty to its derivative instruments. |
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Cash Equivalents | |
Cash Equivalents |
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The Company considers all short-term investments with a maturity of 90 days or less when purchased to be cash equivalents. |
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Accounts Receivable and Allowances | |
Accounts Receivable and Allowances |
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Trade accounts receivable are recorded at the invoiced amount or the earned amount but not yet invoiced and do not bear interest. The Company maintains allowances for estimated uncollectible receivables, including bad debts and other items. The allowance for doubtful accounts is based on the Company’s best estimate of probable uncollectible amounts in existing accounts receivable. The Company determines the allowance based on historical write-off experience and specific identification. |
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Inventory and Other Current Assets | |
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Inventory |
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Inventories are stated at the lower of cost or market. Cost is determined using the first-in, first-out or weighted-average cost methods for finished goods and work-in-process. Supplies and consumables consist principally of products used in the Company’s services provided to its customers. |
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Property, Plant and Equipment | |
Property, Plant and Equipment |
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Property, plant and equipment are stated at cost, except assets acquired using purchase accounting, which are recorded at fair value as of the date of acquisition. With the exception of certain marine assets and oil and natural gas properties, depreciation is computed using the straight line method over the estimated useful lives of the related assets as follows: |
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Buildings and improvements | 5 | to | 40 | years | | | | | | | | | | | | | | |
Marine vessels and equipment | 5 | to | 25 | years | | | | | | | | | | | | | | |
Machinery and equipment | 2 | to | 25 | years | | | | | | | | | | | | | | |
Automobiles, trucks, tractors and trailers | 3 | to | 10 | years | | | | | | | | | | | | | | |
Furniture and fixtures | 2 | to | 10 | years | | | | | | | | | | | | | | |
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The Company follows the successful efforts method of accounting for its investment in oil and natural gas properties. Under the successful efforts method, the costs of successful exploratory wells and leases containing productive reserves are capitalized. Costs incurred to drill and equip developmental wells, including unsuccessful wells, are capitalized. Other costs such as geological and geophysical costs and the drilling costs of unsuccessful exploratory wells are expensed. Leasehold and well costs are depleted on a units-of-production basis based on the estimated remaining equivalent oil and gas reserves of each field. |
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Capitalized Interest |
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The Company capitalizes interest on the cost of major capital projects during the active construction period. Capitalized interest is added to the cost of the underlying assets and is amortized over the useful lives of the assets. The Company capitalized $1.0 million, $2.4 million and $7.7 million of interest expense in the years ended December 31, 2014, 2013 and 2012, respectively, for various capital projects. |
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Reduction in Value of Long-Lived Assets |
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Long-lived assets, such as property, plant and equipment and purchased intangibles subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of assets to be held and used is assessed by a comparison of the carrying amount of such assets to their fair value calculated, in part, by the estimated undiscounted future cash flows expected to be generated by the assets. Cash flow estimates are based upon, among other things, historical results adjusted to reflect the best estimate of future market rates, utilization levels, and operating performance. Estimates of cash flows may differ from actual cash flows due to, among other things, changes in economic conditions or changes in an asset’s operating performance. The Company’s assets are grouped by subsidiary or division for the impairment testing, which represent the lowest level of identifiable cash flows. The Company has long-lived assets, such as facilities, utilized by multiple operating divisions that do not have identifiable cash flows. Impairment testing for these long-lived assets is based on the consolidated entity. If the asset grouping’s fair value is less than the carrying amount of those items, impairment losses are recorded in the amount by which the carrying amount of such assets exceeds the fair value. Assets to be disposed of are reported at the lower of the carrying amount or fair value less estimated costs to sell. The net carrying value of assets not fully recoverable is reduced to fair value. The estimate of fair value represents the Company’s best estimate based on industry trends and reference to market transactions and is subject to variability. The oil and gas industry is cyclical and estimates of the period over which future cash flows will be generated, as well as the predictability of these cash flows, can have a significant impact on the carrying values of these assets and, in periods of prolonged down cycles, may result in impairment charges. See note 9 for a discussion of reduction in values of long-lived assets recorded during 2013. |
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Goodwill | |
Goodwill |
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The following table summarizes the activity for the Company’s goodwill for the years ended December 31, 2014 and 2013 (in thousands): |
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| Drilling | | Completion | | | | | | | | | | | | | |
| Products | | and Workover | | Production | | Technical | | | | | | | |
| and Services | | Services | | Services | | Solutions | | Total | | | | |
Balance, December 31, 2012 | $ | 144,947 | | $ | 1,418,050 | | $ | 878,052 | | $ | 91,016 | | $ | 2,532,065 | | | | |
Acquisition activities | | - | | | 1,500 | | | 15,099 | | | - | | | 16,599 | | | | |
Disposition activities | | -756 | | | - | | | - | | | - | | | -756 | | | | |
Reduction in value of assets | | - | | | - | | | - | | | -91,016 | | | -91,016 | | | | |
Foreign currency translation adjustment | | 681 | | | - | | | 536 | | | - | | | 1,217 | | | | |
Balance, December 31, 2013 | | 144,872 | | | 1,419,550 | | | 893,687 | | | - | | | 2,458,109 | | | | |
Acquisition activities | | - | | | - | | | 13,909 | | | - | | | 13,909 | | | | |
Disposition activities | | - | | | - | | | - | | | - | | | - | | | | |
Foreign currency translation adjustment | | -2,033 | | | - | | | -1,576 | | | - | | | -3,609 | | | | |
Balance, December 31, 2014 | $ | 142,839 | | $ | 1,419,550 | | $ | 906,020 | | $ | - | | $ | 2,468,409 | | | | |
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Goodwill is tested for impairment annually or on an interim basis if events or circumstances indicate that the fair value of the asset has decreased below its carrying value. During the third quarter of 2014, the Company changed its annual goodwill impairment testing date from December 31 to October 1. Management considers this accounting change preferable because it allows the Company additional time to complete the annual goodwill test. This change does not accelerate, delay, avoid, or cause an impairment charge, nor does this change result in adjustments to previously issued financial statements. In order to estimate the fair value of the reporting units (which is consistent with the reported business segments), the Company used a weighting of the discounted cash flow method and the public company guideline method of determining fair value of each reporting unit. The Company weighted the discounted cash flow method 80% and the public company guideline method 20% due to differences between the Company’s reporting units and the peer companies’ size, profitability and diversity of operations. In order to validate the reasonableness of the estimated fair values obtained for the reporting units, a reconciliation of fair value to market capitalization was performed for each unit on a standalone basis. A control premium, derived from market transaction data, was used in this reconciliation to ensure that fair values were reasonably stated in conjunction with the Company’s capitalization. These fair value estimates were then compared to the carrying value of the reporting units. No impairment loss was recognized during the year ended December 31, 2014, as the fair value of each of the reporting units exceeded its carrying amount. Based on the most recent goodwill impairment test, the fair values of the Drilling Products and Services and Onshore Completion and Workover Services segments were substantially in excess of their carrying values. The fair value of the Production Services segment exceeded its carrying value by approximately 9%. A significant amount of judgment was involved in performing these evaluations since the results are based on estimated future events. |
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See note 9 for a discussion of reduction in value of goodwill recorded during 2013. As of December 31, 2014, the Company’s accumulated reduction in value of goodwill was $91.0 million. |
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If, among other factors, (1) the Company’s market capitalization declines and remains below its stockholders’ equity, (2) the fair value of the reporting units decline, or (3) economic or competitive conditions deteriorate, the Company could conclude in future periods that impairment losses are required. |
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Notes Receivable | |
Notes Receivable |
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The Company’s wholly owned subsidiary, Wild Well Control, Inc. (Wild Well) has decommissioning obligations related to its ownership of the Bullwinkle platform. Notes receivable consist of a commitment from the seller of the platform towards its eventual abandonment. Pursuant to an agreement with the seller, the Company will invoice the seller an agreed upon amount at the completion of certain decommissioning activities. The gross amount of this obligation totaled $115.0 million and is recorded at present value using an effective interest rate of 6.58%. The related discount is amortized to interest income based on the expected timing of the platform’s removal. The Company recorded interest income related to notes receivable of $1.6 million, $2.6 million and $2.8 million for the years ended December 31, 2014, 2013 and 2012, respectively. |
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Intangible and Other Long-Term Assets | Intangible and Other Long-Term Assets |
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Intangible and other long-term assets consist of the following as of December 31, 2014 and 2013 (in thousands): |
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| | Gross | | Accumulated | | Net | | Gross | | Accumulated | | Net |
| | Amount | | Amortization | | Balance | | Amount | | Amortization | | Balance |
Customer relationships | | $ | 339,695 | | $ | -64,954 | | $ | 274,741 | | $ | 335,590 | | $ | -44,117 | | $ | 291,473 |
Tradenames | | | 41,265 | | | -13,151 | | | 28,114 | | | 45,025 | | | -9,175 | | | 35,850 |
Non-compete agreements | | | 4,487 | | | -3,281 | | | 1,206 | | | 4,256 | | | -2,163 | | | 2,093 |
Debt issuance costs | | | 63,829 | | | -36,360 | | | 27,469 | | | 63,829 | | | -28,250 | | | 35,579 |
Deferred compensation | | | 12,982 | | | - | | | 12,982 | | | 13,731 | | | - | | | 13,731 |
plan assets |
Escrowed cash | | | 58,421 | | | - | | | 58,421 | | | 58,406 | | | - | | | 58,406 |
Other | | | 18,356 | | | -929 | | | 17,427 | | | 14,597 | | | -862 | | | 13,735 |
Total | | $ | 539,035 | | $ | -118,675 | | $ | 420,360 | | $ | 535,434 | | $ | -84,567 | | $ | 450,867 |
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Customer relationships, tradenames, and non-compete agreements are amortized using the straight line method over the life of the related asset with weighted average useful lives of 17 years, 10 years, and 3 years, respectively. Amortization expense (exclusive of debt issuance costs) was $25.9 million, $26.2 million and $22.6 million for the years ended December 31, 2014, 2013 and 2012, respectively. Estimated annual amortization of intangible assets (exclusive of debt acquisition costs) will be approximately $25.6 million for 2015, $24.8 million for 2016, $24.0 million for 2017, $23.9 million for 2018 and $23.7 million for 2019, excluding the effects of any acquisitions or dispositions subsequent to December 31, 2014. |
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Debt issuance costs are amortized using the effective interest method over the life of the related debt agreements with a weighted average useful life of 7 years. Amortization of debt issuance costs is recorded in interest expense, net of amounts capitalized within the consolidated statements of operations. |
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In accordance with the asset purchase agreement between Wild Well and the seller to acquire the Bullwinkle platform and its related assets and to assume the related decommissioning obligations, Wild Well obtained a $50.0 million performance bond and funded $50.0 million into an escrow account. Included in intangible and other long-term assets, net is escrowed cash related to the Bullwinkle platform of $50.4 million as of December 31, 2014 and 2013. |
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Decommissioning Liabilities | Decommissioning Liabilities |
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The Company records estimated future decommissioning liabilities in accordance with the authoritative guidance related to asset retirement obligations (decommissioning liabilities), which requires entities to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred, with a corresponding increase in the carrying amount of the related long-lived asset. Subsequent to initial measurement, the decommissioning liability is required to be accreted each period to present value. |
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The Company’s decommissioning liabilities associated with the Bullwinkle platform and its related assets consist of costs related to the plugging of wells, the removal of the related facilities and equipment, and site restoration. The Company reviews the adequacy of its decommissioning liabilities whenever indicators suggest that the estimated cash flows needed to satisfy the liability have changed materially. During 2013, as a result of an increase in third party drilling activity in the vicinity of the Bullwinkle platform, the Company believed new economic opportunities existed for additional production handling agreements with those third party production companies utilizing the Bullwinkle platform. As a result, the Company revised its estimates relating to the timing of decommissioning work on its Bullwinkle assets, including a 10 year postponement of the platform decommissioning to an estimated date of 2038. This change in estimate resulted in a reduction in the present value of decommissioning liabilities. Further, as of December 31, 2013, the Company anticipated that it would be able to decommission several depleted wells that are part of the Bullwinkle assets based on the estimates received from engineers regarding platform availability during 2014. As a result, as of December 31, 2013, the decommissioning liabilities associated with those wells were classified as current liabilities on the consolidated balance sheet. Based on revised estimates received during 2014, the Company did not anticipate decommissioning any of the wells during the next twelve months. As a result, all of the decommissioning liabilities were classified as long-term liabilities on the consolidated balance sheet as of December 31, 2014. |
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The following table summarizes the activity for the Company’s decommissioning liabilities for the years ended December 31, 2014 and 2013 (in thousands): |
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| | 2014 | | 2013 | | | | | | | | | | | | |
Decommissioning liabilities, December 31, 2013 and 2012, respectively | | $ | 83,519 | | $ | 93,053 | | | | | | | | | | | | |
Liabilities acquired and incurred | | | 866 | | | 445 | | | | | | | | | | | | |
Liabilities settled | | | -579 | | | -87 | | | | | | | | | | | | |
Accretion | | | 4,470 | | | 5,320 | | | | | | | | | | | | |
Revisions in estimated timing and cash flows | | | -276 | | | -15,212 | | | | | | | | | | | | |
Total decommissioning liabilities, December 31, 2014 and 2013, respectively | | $ | 88,000 | | $ | 83,519 | | | | | | | | | | | | |
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Revenue Recognition | |
Revenue Recognition |
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Products and services are generally sold based upon purchase orders or contracts with customers that include fixed or determinable prices. Revenue is recognized when services or equipment are provided and collectability is reasonably assured. The Company’s drilling products and services are billed on a day rate basis, and revenue from the sale of equipment is recognized when the title to the equipment has been transferred. Reimbursements from customers for the cost of drilling products and services that are damaged or lost down-hole are reflected as revenue at the time of the incident. The Company accounts for the revenue and related costs on large-scale platform decommissioning contracts on the percentage-of-completion method utilizing costs incurred as a percentage of total estimated costs. The Company recognizes oil and gas revenue from its interests in producing wells as oil and natural gas is sold. |
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Taxes Collected from Customers | |
Taxes Collected from Customers |
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In accordance with authoritative guidance related to taxes collected from customers and remitted to governmental authorities, the Company elected to net taxes collected from customers against those remitted to government authorities in the financial statements consistent with the historical presentation of this information. |
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Income Taxes | |
Income Taxes |
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The Company accounts for income taxes and the related accounts under the asset and liability method. Deferred income taxes reflect the impact of temporary differences between amounts of assets and liabilities for financial reporting purposes and such amounts as measured by tax laws and rates that are in effect when the temporary differences are expected to reverse. The effect of a change in tax rates on the deferred income taxes is recognized in income in the period in which the change occurs. A valuation allowance is recorded when management believes it is more likely than not that at least some portion of any deferred tax asset will not be realized. |
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The Company has adopted authoritative guidance surrounding accounting for uncertainty in income taxes. It is the Company’s policy to recognize interest and applicable penalties related to uncertain tax positions in income tax expense. |
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Earnings (Loss) per Share | |
Earnings per Share |
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Basic earnings per share is computed by dividing income available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed in the same manner as basic earnings per share except that the denominator is increased to include the number of additional shares of common stock that could have been outstanding assuming the exercise of stock options and conversion of restricted stock units. |
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Stock options for approximately 1,100,000 shares, 1,100,000 shares and 2,100,000 shares of the Company’s common stock were excluded in the computation of diluted earnings per share for the years ended December 31, 2014, 2013 and 2012, respectively, as the effect would have been anti-dilutive. |
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Cash Dividends Policy Text Block | Cash Dividends |
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In December 2013, the Company’s Board of Directors approved initiating a quarterly dividend program and declared an initial quarterly dividend of $0.08 per share on its outstanding common stock. The dividend payable of $12.8 million was included in accrued expenses in the consolidated balance sheet as of December 31, 2013. The initial dividend was paid on February 19, 2014 to all stockholders of record as of January 30, 2014. During 2014, $49.8 million of dividends was paid to stockholders. |
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Discontinued Operations | Discontinued Operations |
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The Company classifies assets and liabilities of a disposal group as held for sale and discontinued operations if the following criteria are met: (1) management, with appropriate authority, commits to a plan to sell a disposal group; (2) the asset is available for immediate sale in its current condition; (3) an active program to locate a buyer and other actions to complete the sale have been initiated; (4) the sale is probable; (5) the disposal group is being actively marketed for sale at a reasonable price; and (6) actions required to complete the plan of sale indicate it is unlikely that significant changes to the plan of sale will occur or that the plan will be withdrawn. Once deemed as held for sale, the Company no longer depreciates the assets of the disposal group. Upon sale, the Company calculates the gain or loss associated with the disposition by comparing the carrying value of the assets less direct costs of the sale with the proceeds received. In the consolidated statements of operations, losses from discontinued operations are presented, net of tax effect, as a separate caption below net income (loss) from continuing operations. |
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Fair Value Measurements | |
Fair Value Measurements |
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The company follows the authoritative guidance for fair value measurements relating to financial and nonfinancial assets and liabilities, including presentation of required disclosures herein. This guidance establishes a fair value framework requiring the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to price the assets and liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows: |
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Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities; |
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Level 2: Observable inputs other than those included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical assets or liabilities in inactive markets or model-derived valuations or other inputs that can be corroborated by observable market data; and |
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Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability. |
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Financial Instruments | |
Financial Instruments |
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The fair value of the Company’s financial instruments of cash equivalents, accounts receivable, accounts payable, accrued expenses and borrowings under its credit facility approximates their carrying amounts due to their short maturity or market interest rates. The fair value of the Company’s debt was $1,624.3 million and $1,789.0 million as of December 31, 2014 and 2013, respectively, and was categorized as Level 1 in the fair value hierarchy. The fair value of these debt instruments is determined by reference to the market value of the instrument as quoted in an over-the-counter market. |
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Foreign Currency | |
Foreign Currency |
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Results of operations for foreign subsidiaries with functional currencies other than the U.S. dollar are translated using average exchange rates during the period. Assets and liabilities of these foreign subsidiaries are translated using the exchange rates in effect at the balance sheet dates, and the resulting translation adjustments are reported as accumulated other comprehensive loss in the Company’s stockholders’ equity. |
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For international subsidiaries where the functional currency is the U.S. dollar, financial statements are remeasured into U.S. dollars using the historical exchange rate for most of the long-term assets and liabilities and the balance sheet date exchange rate for most of the current assets and liabilities. An average exchange rate is used for each period for revenues and expenses. These transaction gains and losses, as well as any other transactions in a currency other than the functional currency, are included in other income (expense) in the consolidated statements of operations in the period in which the currency exchange rates change. For the years ended December 31, 2014, 2013 and 2012, the Company recorded $7.3 million, $7.1 million and $2.9 million of foreign currency losses, respectively. |
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Stock-Based Compensation | |
Stock-Based Compensation |
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In accordance with authoritative guidance related to stock compensation, the Company records compensation costs relating to share-based payment transactions and includes such costs in general and administrative expenses in the consolidated statement of operations. The cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the employee’s requisite service period (generally the vesting period of the equity award). Excess tax benefits of awards that are recognized in equity related to stock option exercises and restricted stock vesting are reflected as financing cash flows. |
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Derivative Instruments and Hedging Activities | |
Derivative Instruments and Hedging Activities |
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The Company recognizes all derivative instruments as either assets or liabilities in the balance sheet at their respective fair values. Interest rate swap agreements that are effective at hedging the fair value of fixed-rate debt agreements are designated and accounted for as fair value hedges. The Company also assesses, both at inception of the hedging relationship and on an ongoing basis, whether the derivatives used in hedging relationships are highly effective in offsetting changes in fair value. |
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In an attempt to achieve a more balanced debt portfolio between fixed and variable interest, the Company enters into interest rate swaps. Under these agreements, the Company is entitled to receive semi-annual interest payments at a fixed rate and is obligated to make quarterly interest payments at a variable rate. The Company had fixed-rate interest on approximately 61% and 60% of its long-term debt as of December 31, 2014 and 2013, respectively. The Company had notional amounts of $300 million related to interest rate swaps with a variable interest rate, adjusted every 90 days, based on LIBOR plus a fixed margin as of December 31, 2014 and 2013. |
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Self Insurance Reserves | |
Self-Insurance Reserves |
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The Company is self-insured, through deductibles and retentions, up to certain levels for losses under its insurance programs. With the Company’s growth, the Company has elected to retain more risk by increasing its self-insurance levels. The Company accrues for these liabilities based on estimates of the ultimate cost of claims incurred as of the balance sheet date. The Company regularly reviews the estimates of reported and unreported claims and provides for losses through reserves. The Company obtains actuarial reviews to evaluate the reasonableness of internal estimates for losses related to workers’ compensation, auto liability and group medical on an annual basis. |
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Subsequent Events | |
Subsequent Events |
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In accordance with authoritative guidance, the Company has evaluated and disclosed all material subsequent events that occurred after the balance sheet date, but before financial statements were issued. |
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Recently Issued Accounting Pronouncements | |
Recently Issued Accounting Pronouncements |
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In May 2014, the Financial Accounting Standards Board issued ASU No. 2014-09, Revenue from Contracts with Customers, which will replace most existing revenue recognition guidance in GAAP. The guidance in this update requires an entity to recognize the amount of revenue that it expects to be entitled for the transfer of promised goods or services to customers. The new standard is effective for the Company on January 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the accounting guidance on its ongoing financial reporting. |
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In April 2014, the Financial Accounting Standards Board issued ASU No. 2014-08, Presentation of Financial Statements and Property, Plant and Equipment, which changes the definition of discontinued operations. The guidance permits only those disposed components (or components held-for-sale) representing a strategic shift that have (or will have) a major effect on operations and financial results to be reported in discontinued operations. The new standard is effective prospectively for disposals (or classifications as held-for-sale) that occur after December 31, 2014. The Company has adopted the accounting guidance as of January 1, 2015. |
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