Diamond Offshore Drilling, Inc. (DOD), is an international company that provides contract drilling services to the energy industry. In its 2015 Form 10-K, it reports the following information related to Property and equipment.
2. Asset Impairments
2015 Impairments-During 2015, in response to a continued deterioration of the market fundamentals in the oil and gas industry, including the dramatic decline in oil prices, significant cutbacks in customer capital spending plans and contract cancelations by customers, as well as pending regulatory requirements in the U.S. Gulf of Mexico, or GOM, we evaluated 25 of our drilling rigs with indications that their carrying amounts may not be recoverable (See Note 1). Using an undiscounted, projected probability-weighted cash flow analysis as described in Note 1, we determined that the carrying value of 17 of these rigs, consisting of two ultra-deepwater, one deepwater and nine mid-water floaters and five jack-up rigs, were impaired (collectively referred to as the 2015 Impaired Rigs).
We estimated the fair value of 16 of the 2015 Impaired Rigs utilizing a market approach, which required us to estimate the value that would be received for each rig in the principal or most advantageous market for that rig in an orderly transaction between market participants. Such estimates were based on various inputs, including historical contracted sales prices for similar rigs in our fleet, nonbinding quotes from rig brokers and/or indicative bids, where applicable. We estimated the fair value of the one remaining 2015 Impaired Rig using an income approach, as we determined that the most likely use for this rig would be to cold stack the rig and reintroduce it into the market at a later date. The fair value of this rig was estimated based on a calculation of the rig's discounted future net cash flows over its remaining economic life, which utilized significant unobservable inputs, including, but not limited to, assumptions related to estimated dayrate revenue, rig utilization, estimated equipment upgrade and regulatory survey costs, as well as estimated proceeds that may be received on ultimate disposition of the rig. Our fair value estimates are representative of Level 3 fair value measurements due to the significant level of estimation involved and the lack of transparency as to the inputs used.
During the first, third and fourth quarters of 2015, we recognized impairment losses of $358.5 million, $2.6 million and $499.4 million, respectively, for an aggregate impairment loss of $860.4 million for the year ended December 31, 2015.
9. Drilling and Other Property and Equipment
Cost and accumulated depreciation of drilling and other property and equipment are summarized as follows:

During the year ended December 31, 2015, we recognized an impairment loss of $860.4 million and transferred $14.2 million net book value of five of our non-working jack-up rigs to "Assets held for sale" in our Consolidated Balance Sheet at December 31, 2015. In addition, we sold nine rigs with an aggregate net book value of $5.2 million and recognized an aggregate gain on disposition of $3.5 million. See Notes 1 and 2.

Required:
1. What factors prompted DOD's impairment review of its drilling equipment?
2. Prepare the aggregate journal entry that DOD made in 2015 to record the impairment?
3. Compute the percentage effect of the impairment loss on 2015 operating income and the 2014 ending balance of Drilling and other property and equipment, net.
4. How does the impairment loss affect 2015 Cash from operating activities on the statement of cash flows? What are the implications of the loss for Cash from operating activities in future years?

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December 31 2015 2014 (In thousands) S 9,345,484 269,605 64.775 71,537 9,751.401 (3,372,587) S 6,378,814 Drilling rigs and equipment 10,555,314 439,206 66,989 70,591 11,132,100 (4,186,147) Land and buildings Office equipment and other Cost Less accumulated depreciation Drilling and other property and equipment, net CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Year Ended December 31 2015 2014 2013 Revenues Contract drilling Revenues related to reimbursable expenses S2,360,184 59,209 2,419,393 $2,737,126 77,545 2,814,671 $2,843,584 76,837 2,920,421 Total revenues Operating expenses: 1,227,864 58,050 493,162 66.462 860441 Contract drilling, excluding depreciation Reimbursable expenses 1,523,623 76,091 456,483 81,832 109,462 1,572,525 74,967 388,092 64,788 General and administrative Impairment of assets Bad debt expense Restructuring and separation costs Gain on disposition of assets 22,513 9,778 (5,382) 2.242,109 572,562 (4,070) 2,118,815 801,606 Total operating ex penses 2,713,467 (294,074) Operating (loss) income