Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2015

Goodwill and Other Intangible Assets [Abstract]

3. Goodwill and Other Intangible Assets

Additions to goodwill during the nine months ended September 30, 2015 were primarily due to adjustments to the preliminary purchase price allocation for acquisitions completed in prior year.

The Company performed a quarterly assessment of goodwill as of September 30, 2015. For step one of the impairment testing, the Company tested its reporting units for goodwill impairment. The Company’s well servicing, fluid services and contract drilling reporting units do not carry any goodwill, and were not subject to the test.

To estimate the fair value of the reporting units, we primarily used level 1 and level 3 inputs from the fair value hierarchy, which included a weighting of the discounted cash flow method and the public company guideline method (level 3 inputs) of determining fair value of a business unit. In order to validate the reasonableness of the estimated fair values obtained for the reporting units, a reconciliation of fair value to market capitalization (level 1 inputs) was performed for each unit on a stand-alone 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 our capitalization. The measurement date for our common stock price and market capitalization was the closing price on September 30, 2015.

Based on the results of step one of the impairment test, impairment was indicated in the completion and remedial reporting unit. As such, the Company was required to perform step two assessment on the potentially impaired reporting unit. Step two requires the allocation of the estimated fair value to the tangible and intangible assets and liabilities of the respective reporting unit. This assessment indicated that goodwill of $81.9 million was considered impaired as of September 30, 2015. This non-cash charge eliminated all of the Company’s existing goodwill as of September 30, 2015. The changes in carrying amount of goodwill for the nine months ended September 30, 2015 were as follows (in thousands):



	Completion
	And Remedial
	Services
Balance as of December 31, 2014	$	78,011
Goodwill adjustments		3,866
Goodwill impairment		(81,877)
Balance as of September 30, 2015	$	—

Basic’s intangible assets were as follows (in thousands):



	September 30, 2015		December 31, 2014
Customer relationships	$	92,712	$	88,576
Non-compete agreements		13,571		13,223
Trade names		1,939		1,939
Other intangible assets		2,097		2,097
		110,319		105,835
Less accumulated amortization		41,268		34,662
Intangible assets subject to amortization, net	$	69,051	$	71,173

Amortization expense for the three months ended September 30, 2015 and 2014 was approximately $2.2 million and $2.1 million, respectively. Amortization expense for the nine months ended September 30, 2015 and 2014 was approximately $6.7 million and $6.4 million, respectively.

Intangible assets, net of accumulated amortization allocated to reporting units as of September 30, 2015 were as follows (in thousands):


	Completion
	And Remedial
	Services		Well Servicing		Fluid Services		Contract Drilling		Total
Intangible assets subject to amortization, net	$	51,280	$	6,019	$	8,722	$	3,030	$	69,051

Customer relationships are amortized over a 15-year life, non-compete agreements are amortized over a five-year life, and other intangible assets and trade names are amortized over a 15-year life.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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