Goodwill

Goodwill is tested for impairment annually in the fourth quarter, or more frequently if circumstances indicate a potential impairment. The Company has identified four reporting units, of which only two, Chemicals and Logistics and Teledrift, have a goodwill balance at December 31, 2012.

During annual goodwill impairment testing in 2012 and 2011, the Company first assessed qualitative factors to determine whether it was necessary to perform the two-step goodwill impairment test that the Company has historically used. The Company concluded that it was not more-likely-than-not that goodwill was impaired as of the fourth quarter of 2012 or 2011, and therefore, further testing was not required. The Company’s 2010 annual goodwill impairment testing did not identify impairment of goodwill in any reporting unit.

In estimating the fair value of the Company’s reporting units when performing the two step goodwill impairment test, management makes estimates and judgments regarding future cash flows and market valuations using a combination of income and market approaches. The income approach, specifically a discounted cash flow analysis, includes assumptions for discount rates, cash flow projections, growth rates and terminal value rates. Each assumption is reevaluated and updated at each testing date to take into consideration Company-specific risk factors from the perspective of a market participant.

Changes in the carrying value of goodwill for each reporting unit are as follows (in thousands):



	Chemicals and Logistics		Downhole Tools			Teledrift			Artificial Lift			Total
Balance at December 31, 2010:
Goodwill	$	11,610	$	43,009		$	46,396		$	5,861		$	106,876
Accumulated impairment losses	—		(43,009		)	(31,063		)	(5,861		)	(79,933		)
Goodwill balance, net	11,610		—			15,333			—			26,943
Activity during the year 2011:
Goodwill impairment recognized	—		—			—			—			—
Balance at December 31, 2011:
Goodwill	11,610		43,009			46,396			5,861			106,876
Accumulated impairment losses	—		(43,009		)	(31,063		)	(5,861		)	(79,933		)
Goodwill balance, net	11,610		—			15,333			—			26,943
Activity during the year 2012:
Goodwill impairment recognized	—		—			—			—			—
Balance at December 31, 2012:
Goodwill	11,610		43,009			46,396			5,861			106,876
Accumulated impairment losses	—		(43,009		)	(31,063		)	(5,861		)	(79,933		)
Goodwill balance, net	$	11,610	$	—		$	15,333		$	—		$	26,943