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Goodwill and Identifiable Intangibles
6 Months Ended
Jun. 30, 2019
Goodwill and Identifiable Intangibles [Abstract]  
Goodwill and Identifiable Intangibles

Note 5.  Goodwill and Identifiable Intangibles



Changes in the carrying amount of goodwill are as follows (in thousands):







 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 



 

Gross Value

 

Accumulated Impairment

 

Net

At December 31, 2017

 

$

184,478 

 

$

 —

 

$

184,478 

Purchase price allocation adjustment

 

 

54 

 

 

 —

 

 

54 

Impairment

 

 

 —

 

 

(154,003)

 

 

(154,003)

Currency translation adjustment

 

 

(7,417)

 

 

 —

 

 

(7,417)

At December 31, 2018

 

$

177,115 

 

$

(154,003)

 

$

23,112 

Impairment

 

 

 —

 

 

(7,937)

 

 

(7,937)

Currency translation adjustment

 

 

47 

 

 

 —

 

 

47 

At June 30, 2019

 

$

177,162 

 

$

(161,940)

 

$

15,222 



We perform our annual impairment tests of goodwill as of December 31, or when there is an indication an impairment may have occurred.



On December 31, 2018, we performed our annual impairment test for goodwill on each of our three reporting units. As a result of unfavorable oil and gas industry market conditions in late 2018 that continued to persist into 2019 and the related impact on expected customer activity levels, particularly in Canada, as well as a decline in the quoted price of our common stock, we concluded that there had been an impairment because the carrying values exceeded the estimated fair values. We recorded impairment charges in the fourth quarter of 2018 in two reporting units, totaling $154.0 million. As a result of the impairment loss, we have no remaining goodwill in the fracturing systems and well construction reporting unit.



 During the second quarter of 2019, we performed an impairment test for goodwill and determined that the carrying value of one of our reporting units exceeded its fair value. We recorded an impairment charge of $7.9 million for our tracer diagnostic services reporting unit as a result of a further deterioration in customer activity levels in North America. This resulted in lower demand for oilfield services driving a decrease in our market share and increased customer and competitor-driven pricing pressures in addition to a decline in the quoted price of our common stock. Following the impairment, our tracer diagnostic services reporting unit has no remaining goodwill balance. There was no indication an impairment may have occurred in any other reporting unit.



Identifiable intangibles by major asset class consist of the following (in thousands):







 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



 

 

 

June 30, 2019



 

Estimated

 

Gross

 

 

 

 

 

 



 

Useful

 

Carrying

 

Accumulated

 

Net



 

Lives (Years)

 

Amount

 

Amortization

 

Balance

Technology

 

8 - 18

 

$

17,667 

 

$

(1,468)

 

$

16,199 

Trademarks

 

5 - 10

 

 

1,600 

 

 

(293)

 

 

1,307 

Customer relationships

 

10 - 21

 

 

28,670 

 

 

(3,135)

 

 

25,535 

Internally developed software

 

5

 

 

4,942 

 

 

(492)

 

 

4,450 

Total identifiable intangibles

 

 

 

$

52,879 

 

$

(5,388)

 

$

47,491 









 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



 

 

 

December 31, 2018



 

Estimated

 

Gross

 

 

 

 

 

 



 

Useful

 

Carrying

 

Accumulated

 

Net



 

Lives (Years)

 

Amount

 

Amortization

 

Balance

Technology

 

8 - 18

 

$

17,289 

 

$

(516)

 

$

16,773 

Trademarks

 

5 - 10

 

 

1,600 

 

 

(213)

 

 

1,387 

Customer relationships

 

10 - 21

 

 

28,544 

 

 

(2,339)

 

 

26,205 

Internally developed software

 

5

 

 

4,620 

 

 

 —

 

 

4,620 

Total identifiable intangibles

 

 

 

$

52,053 

 

$

(3,068)

 

$

48,985 

 

Total amortization expense, which is associated with the selling, general and administrative expenses income statement line item, was $1.1 million and $3.3 million for the three months ended June 30, 2019 and 2018, respectively, and $2.3 million and $6.6 million for the six months ended June 30, 2019 and 2018, respectively.



Identifiable intangibles with definite lives are tested for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. On December 31, 2018, as a result of unfavorable oil and gas industry market conditions in late 2018 that continued to persist into early 2019 and the related impact on expected customer activity levels, particularly in Canada, as well as a decline in the quoted price of our common stock, we determined that the carrying values of certain intangible assets were no longer recoverable, which resulted in an impairment charge of $73.5 million in our asset group that includes fracturing systems and well construction, which we recorded in the fourth quarter of 2018. In addition to goodwill, we also assessed our identifiable intangibles for impairment as of June 30, 2019 and determined those assets were not impaired.