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Goodwill and Other Intangible Assets
 12 Months Ended
Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Other Intangible Assets Goodwill and Other Intangible Assets
Goodwill
Changes in the carrying amount of goodwill for the years ended December 31, 2020 and 2019 are as follows (in thousands):
Well Site ServicesDownhole TechnologiesOffshore / Manufactured
Products		Total
Completion
Services		Drilling
Services		Subtotal
Balance as of December 31, 2018   
Goodwill$221,582 $22,767 $244,349 $357,502 $162,462 $764,313 
Accumulated impairment losses(94,528)(22,767)(117,295)— — (117,295)
127,054 — 127,054 357,502 162,462 647,018 
Goodwill impairment (December 2019)— — — (165,000)— (165,000)
Foreign currency translation— — — — 288 288 
Balance as of December 31, 2019$127,054 $— $127,054 $192,502 $162,750 $482,306 
Balance as of December 31, 2019
Goodwill$221,582 $22,767 $244,349 $357,502 $162,750 $764,601 
Accumulated impairment losses(94,528)(22,767)(117,295)(165,000)— (282,295)
127,054 — 127,054 192,502 162,750 482,306 
Goodwill impairments (March 2020)(127,054)— (127,054)(192,502)(86,500)(406,056)
Foreign currency translation— — — — 239 239 
Balance as of December 31, 2020$— $— $— $— $76,489 $76,489 
Balance as of December 31, 2020
Goodwill$221,582 $22,767 $244,349 $357,502 $162,989 $764,840 
Accumulated impairment losses(221,582)(22,767)(244,349)(357,502)(86,500)(688,351)
$— $— $— $— $76,489 $76,489 
As further discussed in Note 2, "Significant Accounting Policies," goodwill is allocated to each reporting unit based on acquisitions made by the Company and is assessed for impairment annually and when an event occurs or circumstances change that indicate the carrying amounts may not be recoverable.
December 2019 Impairment
The Company had three reporting units – Completion Services, Downhole Technologies and Offshore/Manufactured Products – whose goodwill balances totaled approximately $647 million as of September 30, 2019.
During the fourth quarter of 2019, U.S. land-based completion activity declined significantly from levels experienced over the previous three quarters. Additionally, a number of other market indicators declined to levels not experienced in recent years. Consistent with most other oilfield service industry peers, the Company's stock price declined and its market capitalization was below the carrying value of stockholders' equity. Given these market conditions, the Company reduced its near-term demand outlook for its short-cycle products and services in the U.S. shale play regions. This refined outlook was incorporated in the December 1, 2019 annual impairment assessment.
Management utilizes, depending on circumstances, a combination of valuation methodologies including a market approach and an income approach, as well as guideline public company comparables. The valuation techniques used in the December 1, 2019 assessment were consistent with those used during previous testing, except for the Downhole Technologies reporting unit where the income approach was used to estimate its fair value – with the market approach used only to validate the results in 2019. The fair value of the Company's reporting units were determined using significant unobservable inputs (a Level 3 fair value measurement).
The income approach estimates the fair value of each reporting unit by discounting the Company's current forecast of future cash flows by its estimate of the discount rate (or expected return) that a market participant would require. The market approach includes the use of comparative multiples to corroborate the discounted cash flow results. The market approach involves judgment in the selection of the appropriate peer group companies and valuation multiples.
Significant assumptions used in the income approach include, among others, the estimated future net annual cash flows and discount rates for each reporting unit. Management selected estimates used in the discounted cash flow projections using historical data as well as then-current and anticipated market conditions and estimated growth rates. These estimates were based upon assumptions that considered published industry trends and market forecasts of commodity prices, rig count, well count and offshore/onshore drilling and completion spending, and were believed to be reasonable at the time.
Based on this quantitative assessment, the Company concluded that the goodwill amount recorded in its Downhole Technologies reporting unit was partially impaired and recognized a non-cash goodwill impairment charge of $165.0 million in the fourth quarter of 2019.
The discount rates used to value the Company's reporting units as of December 1, 2019 ranged between 12.5% and 13.0%. Holding all other assumptions and inputs used in each of the respective discounted cash flow analysis constant, a 50 basis point increase in the discount rate assumption would have increased the goodwill impairment charge by approximately $28 million.
March 2020 Impairments
Given the significance of the March 2020 events described in Note 3, "Asset Impairments and Other Charges," the Company performed a quantitative assessment of goodwill for further impairment as of March 31, 2020. This interim assessment indicated that the fair value of each of the reporting units was less than their respective carrying amounts due to, among other factors, the significant decline in the Company's stock price and that of its peers and reduced growth rate expectations given weak energy market conditions resulting from the demand destruction caused by the global response to the COVID-19 pandemic. In addition, the estimated returns required by market participants increased materially in the Company's March 31, 2020 assessment from the assessment performed as of December 1, 2019, resulting in higher discount rates used in the discounted cash flow analysis.
The valuation techniques used in the March 31, 2020 assessment were consistent with those used during the December 1, 2019 assessment, except for the Completion Services reporting unit where the income approach was used to estimate its fair value – with the market approach used only to validate the results in 2020. The fair value of the Company's reporting units were determined using significant unobservable inputs (a Level 3 fair value measurement).
Significant assumptions and estimates used in the income approach include, among others, estimated future net annual cash flows and discount rates for each reporting unit, current and anticipated market conditions, estimated growth rates and historical data. These estimates relied upon significant management judgment, particularly given the uncertainties regarding the COVID-19 pandemic and its impact on activity levels and commodity prices as well as future global economic growth.
Based on this quantitative assessment as of March 31, 2020, the Company concluded that goodwill recorded in the Completion Services and Downhole Technologies businesses was fully impaired while goodwill recorded in the Offshore/Manufactured Products business was partially impaired. The Company therefore recognized non-cash goodwill impairment charges totaling $406.1 million in the first quarter of 2020, as presented in further detail in the table above.
The discount rates used to value the Company's reporting units as of March 31, 2020 ranged between 16.8% and 18.5%. Holding all other assumptions and inputs used in the discounted cash flow analysis constant, a 50 basis point increase in the discount rate assumption for the Offshore/Manufactured Products reporting unit would have increased the goodwill impairment charge by approximately $10 million.
December 2020 Assessment
As of December 1, 2020, the Company had only one reporting unit – Offshore/Manufactured Products – with a goodwill balance of $76 million. The Company performed its annual quantitative assessment of goodwill for impairment, which indicated that the fair value of the Offshore/Manufactured Products reporting unit was greater than its carrying amount and no additional provision for impairment was required. The fair value of the Offshore/Manufactured Products reporting unit was determined using significant unobservable inputs (a Level 3 fair value measurement).
The valuation techniques used in the December 1, 2020 assessment were consistent with those used during the March 31, 2020 assessment. The discount rate used to value the Offshore/Manufactured Products reporting unit as of December 1, 2020 was approximately 15%. The estimated returns required by market participants decreased in the Company's December 1, 2020 assessment from the assessment as of March 31, 2020, resulting in lower discount rate used in the discounted cash flow analysis. Holding all other assumptions and inputs used in the discounted cash flow analysis constant, a 100 basis point increase in the discount rate assumption for the Offshore/Manufactured Products reporting unit would not result in a goodwill impairment.
The March 2020 and December 2019 impairment charges did not impact the Company's liquidity position, debt covenants or cash flows.
Other Intangible Assets
The following table presents the gross carrying amount and the related accumulated amortization for major intangible asset classes as of December 31, 2020 and 2019 (in thousands):
20202019
Other Intangible AssetsGross
Carrying
Amount		Accumulated
Amortization		Net Carrying AmountGross
Carrying
Amount		Accumulated
Amortization		Net Carrying Amount
Customer relationships$168,288 $55,380 $112,908 $168,278 $44,296 $123,982 
Patents/Technology/Know-how75,920 26,124 49,796 85,919 30,791 55,128 
Noncompete agreements16,044 14,742 1,302 17,125 11,061 6,064 
Tradenames and other53,708 11,965 41,743 53,708 8,791 44,917 
Total other intangible assets$313,960 $108,211 $205,749 $325,030 $94,939 $230,091 
Amortization expense was $24.9 million, $26.8 million and $26.3 million in the years ended December 31, 2020, 2019 and 2018, respectively. The weighted average remaining amortization period for all intangible assets, other than goodwill, was 12.4 years as of December 31, 2020 and 12.9 years as of December 31, 2019. Amortization expense is expected to total $20.6 million in 2021, $19.8 million in 2022, $16.8 million in 2023, $16.7 million in 2024 and $16.6 million in 2025.
As of December 31, 2020 and 2019, no provisions for impairment of other intangible assets were required.