Property And Equipment

12 Months Ended

Dec. 31, 2011

Note 6—Property and Equipment.

Property and equipment includes (in thousands):


	December 31,
	2011			2010
Land	$	1,220		$	1,266
Buildings and leasehold improvements		18,401			18,609
Machinery, equipment and rental tools		44,364			40,247
Equipment in progress		4,048			1,271
Furniture and fixtures		1,288			1,278
Transportation equipment		4,853			3,648
Computer equipment		1,900			1,895

Property and equipment		76,074			68,214
Less accumulated depreciation		(32,160	)		(25,690	)

Property and equipment, net	$	43,914		$	42,524

Depreciation expense, inclusive of expense captured in cost of revenue, was $8.0 million, $11.3 million and $11.7 million for the years ended December 31, 2011, 2010 and 2009, respectively.

Potential impairment of certain rental fixed assets within Drilling were identified in 2010 due to shifts in market demand. Drilling activity had become more concentrated in horizontal and directional drilling from the previously dominant vertical drilling.

The estimated fair value of identified asset groups was calculated based on probability weighted future cash flows. Expected cash flows of each identified asset group took into consideration direct material cost margins and serviceable costs, historic and expected utilization, and remaining useful life. In addition, the Company used a present value WACC technique to analyze the recoverability of the identified asset groups. The Company recognized impairment charges of $8.9 million during the year ended December 31, 2010 and a net loss on disposal of assets of $2.1 million.

During 2011 and 2009, no impairment was recognized related to property and equipment.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

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