(3) Reduction in Value of Assets and Other Charges

During 2015 and 2013, the Company recorded $1,738.9 million and $300.1 million in expense related to reduction in value of assets, respectively. The components of reduction in value of assets are as follows (in thousands):



	Years Ended December 31,
	2015		2013
Reduction in value of goodwill	$	1,326,701	$	91,016
Reduction in value of long-lived assets		330,194		180,320
Retirements of long-lived assets		42,545		14,418
Reduction in value of assets related to sale of a business		39,447		-
Reduction in value of assets related to Venezuela exit activities		-		14,324
Total reduction in value of assets	$	1,738,887	$	300,078

Reduction in Value of Goodwill

During 2015, the Company recorded $1,326.7 million reduction in value of goodwill relating to its Onshore Completion and Workover Services and Production Services segments. The Company determined that the implied fair value of its goodwill for the Onshore Completion and Workover Services segment was less than its carrying value and recorded a $740.0 million impairment of the Onshore Completion and Workover Services segment’s goodwill. In addition, the Company determined that the implied fair value of its goodwill for the Production Services segment was less than its carrying value and recorded a $586.7 million impairment of the Production Services segment’s goodwill. The reduction in value of goodwill in the Production Services segment was primarily driven by the continued decline in demand for coiled tubing services. The reduction in value of goodwill in the Onshore Completion and Workover Services and Production Services segments was primarily driven by further deterioration of market conditions during the year and the Company’s forecast did not indicate a timely recovery sufficient to support the carrying values of the goodwill.

During 2013, the Company recorded $91.0 million reduction in value of goodwill relating to its Technical Solutions segment. The Company performed its annual test for goodwill, which indicated that the carrying value of the Technical Solutions segment exceeded its fair value, indicating that goodwill was potentially impaired. The Company determined that the implied fair value of the goodwill for the Technical Solutions segment was less than its carrying value and fully wrote-off the goodwill balance of $91.0 million. The reduction in value of goodwill in the Technical Solutions segment was primarily driven by the decline in demand for services in the subsea construction and marine technical services divisions. During 2013, the demand for these services continued to decline and the forecast for these markets did not indicate a timely recovery sufficient to support the carrying value of the goodwill.

Reduction in Value of Long-Lived Assets

During 2015, the Company recorded $330.2 million in connection with the reduction in value of its long-lived assets. The reduction in value of assets was comprised of $89.7 million related to equipment and $59.5 million related to intangibles in the coiled tubing business and pressure control tools businesses within the Production Services segment. The reduction in value of assets in the Production Services segment was primarily driven by the decline in demand for coiled tubing services. The demand for these services continued to decline and the Company’s forecast did not indicate a timely recovery sufficient to support the carrying values of these assets.

The reduction in value of assets also included $68.9 million related to the reduction in carrying values of the marine vessels and equipment included in the marine technical services division in the Technical Solutions segment. The reduction in value of assets in the Technical Solutions segment was primarily as a result of the termination of the contract with a certain marine technical services division’s customer. Further, the reduction in value of assets also included $56.0 million related to impairment of the Gulf of Mexico oil and gas property which is included in the Technical Solutions segment.

In addition, the reduction in value of assets included a $40.2 million, primarily related to reduction in carrying values of certain domestic and international accommodation units and premium drill pipe included in the Drilling Products and Services segment and $15.9 million related to mechanical drilling rigs included in the Onshore Completion and Workover Services segment. The reduction in value of assets in the Drilling Products and Services segment was primarily driven by the decrease in demand for the rental of accommodation units, changes in the regulatory requirements and a decrease in the Company’s forecast for future rentals of these units. The reduction in value of assets in the Onshore Completion and Workover Services segment related to the reduction in carrying values of the mechanical drilling rigs, primarily as a result of the decreased demand for certain mechanical drilling rigs driven by the downturn in the oil and gas market.

During 2013, the Company recorded $180.3 million in connection with reduction in value of its long-lived assets and related other assets. The reduction in value of assets was comprised of $122.8 million related to certain marine equipment and related write-off of other assets of $31.9 million included in the Technical Solutions segment, $11.4 million related to equipment in the coiled tubing division within the Production Services segment and $11.2 million related to mechanical drilling rigs included in the Onshore Completion and Workover Services segment. In addition, the Company recorded a $3.0 million related to reduction in carrying values of the intangible assets in the coiled tubing business in the Production Services segment.

The reduction in value of assets in the Technical Solutions segment was primarily driven by the decline in demand for services in the Company’s marine technical services business. During 2013, the demand for these services continued to decline and the forecast for these markets did not indicate a timely recovery sufficient to support the carrying values of these assets. The reduction in value of assets in the Onshore Completion and Workover Services segment related to the reduction in carrying values of the mechanical drilling rigs, primarily driven by the shift in customer demand away from mechanically powered rigs to electrically powered drilling rigs. The reduction in value of assets in the Production Services segment related to the coiled tubing business in Mexico and was primarily driven by the decrease in demand for the Company’s services during 2013 coupled with a decrease in the forecast for future activities in that region.

Retirements of Long-Lived Assets

During 2015, the Company recorded $42.5 million for retirement and abandonment of inoperable and/or functionally obsolete long-lived assets that would require a significant cost to refurbish. The total amount recorded includes $27.3 million for the Onshore Completion and Workover Services segment and $15.2 million for the Production Services segment.

During 2013, the Company recorded $14.4 million for retirement and abandonment of inoperable and/or functionally obsolete long-lived assets. The total amount recorded includes $6.4 million for Technical Solutions segment, $5.8 million for Onshore Completion and Workover Services segment and $2.2 million for Production Services segment.

Reduction in Value of Assets Related to Sale of Coiled Tubing Business in Mexico

During 2015, the Company sold its Mexico based coiled tubing business and related assets. The Company received proceeds in the form of cash and a note receivable. The Company recorded a full valuation allowance on the note receivable in the amount of $16.8 million because its collectability was not reasonably assured. In connection with the sale, the Company recorded a $39.4 million reduction in value of assets, primarily related to property, plant and equipment and intangible assets.

Reduction in Value of Assets Related to Venezuela Exit Activities

In November 2013, the government of Venezuela seized two of the Company’s hydraulic snubbing units from its facility in Anaco, Venezuela. As a result, the Company recorded a $14.3 million reduction in value of net assets, primarily related to accounts receivable, prepaid expenses and property, plant and equipment. During 2013, the Company generated $9.5 million, in revenue from its operations in Venezuela.

Other Charges

During 2015, in connection with the reorganization of several of its businesses, the Company recorded $46.8 million relating to reduction in force expense and reorganization costs. The Company’s reorganization plan resulted in the consolidation of certain of its product lines and rationalization of the related facilities and offices. Included in the total reorganization costs is $20.2 million relating to the impairment of certain real estate operating leases included in the Onshore Completion and Workover Services segment. As of December 31, 2015, the accrued lease termination liability balances were $7.2 million and $11.1 million, included in accrued expenses and other long-term liabilities, respectively, on the consolidated balance sheet.