GOODWILL AND IMPAIRMENT CHARGES

The COVID-19 pandemic and subsequent mitigation efforts, which included global business and societal shutdowns and the implementation of mandatory social distancing requirements, created an unprecedented disruption to our business during the first quarter of 2020. These mitigation efforts coupled with the negative economic impacts to the oil and gas industry caused by the substantial decline in the global demand for oil and the concurrent surplus in the supply of oil resulting from geopolitical tensions between the Organization of Petroleum Exporting Countries and Russia regarding limits on production of oil have significantly impacted our business. Even though our services are primarily related to infrastructure support, the oil and gas industry is one of the key industries we serve and our clients have been significantly impacted as a result of these events.

As our clients continue to adjust spending levels in immediate response to the lower commodity prices, we have experienced current activity reductions and pricing pressure for our products and services, primarily in our IHT and MS reporting units, which we expect to continue. In line with these rapidly changing market conditions, our market capitalization also deteriorated during the first quarter of 2020 and most significantly in late March 2020. In response to these events and the related decline in our forecasts from the COVID-19 pandemic, we announced cost-cutting measures to offset the expected impact to our business. We determined the totality of these events constituted a triggering event that required us to perform an interim goodwill impairment assessment as of March 31, 2020.

We determined the fair value for each reporting unit in our goodwill impairment assessment using both a discounted cash flow analysis and a multiples based market approach for comparable companies. We utilized third-party valuation advisors to assist us with these valuations. These analyses included significant judgment, including short-term and long-term forecast of operating performance, discount rates based on our weighted average cost of capital, revenue growth rates, profitability margins, capital expenditures and the timing of future cash flows. These impairment assessments incorporate inherent uncertainties, including supply and demand for our services, utilization forecasts, pricing forecasts and future market conditions, which are difficult to predict in volatile economic environments and could result in impairment charges in future periods if actual results materially differ from the assumptions utilized in our forecasts.

Based upon our impairment assessment, we determined the carrying amount of our IHT reporting unit exceeded the fair value. As a result, we recorded $191.8 million in goodwill impairment charges on our IHT segment. The fair value of the MS and Quest Integrity reporting units exceeded their respective carrying values. We will continue to evaluate our goodwill and long-lived assets for potential triggering events as conditions warrant.

There was $88.1 million of goodwill at March 31, 2020 and $282.0 million at December 31, 2019. The following table presents a rollforward of goodwill for the three months ended March 31, 2020 as follows (in thousands):



	Three Months Ended March 31, 2020
	(unaudited)
	IHT			MS			Quest Integrity			Total
Balance, December 31, 2019	$	193,216		$	55,409		$	33,381		$	282,006
Acquisitions	—			—			496			496
Foreign currency adjustments	(1,428		)	(418		)	(769		)	(2,615		)
Impairment charge	(191,788		)	—			—			(191,788		)
Balance, March 31, 2020	$	—		$	54,991		$	33,108		$	88,099