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Goodwill and Intangible Assets | 9 Months Ended
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Sep. 30, 2020
Goodwill And Intangible Assets Disclosure [Abstract] |
Goodwill and Intangible Assets | 6. Goodwill and Intangible Assets Goodwill — Goodwill by operating segment as of September 30, 2020 and changes for the nine months then ended are as follows (in thousands):
| Contract |
| Drilling |
Balance at beginning of period | $ | 395,060 |
Impairment |  | (395,060 | )
Balance at end of period | $ | — |
There were no accumulated impairment losses related to goodwill in the contract drilling segment as of December 31, 2019. Goodwill is evaluated at least annually as of December 31, or when circumstances require, to determine if the fair value of recorded goodwill has decreased below its carrying value. For impairment testing purposes, goodwill is evaluated at the reporting unit level. Our reporting units for impairment testing are our operating segments. We determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value after considering qualitative, market and other factors, and if this is the case, any necessary goodwill impairment is determined using a quantitative impairment test. From time to time, we may perform quantitative testing for goodwill impairment in lieu of performing the qualitative assessment. If the resulting fair value of goodwill is less than the carrying value of goodwill, an impairment loss would be recognized for the amount of the shortfall. Due to the decline in the market price of our common stock and commodity prices in the first quarter of 2020, we lowered our expectations with respect to future activity levels in our contract drilling reporting unit. We performed a quantitative impairment assessment of our goodwill as of March 31, 2020. In completing the assessment, the fair value of our contract drilling operating segment was estimated using the income approach. The estimate of fair value required the use of significant unobservable inputs, representative of a Level 3 fair value measurement. The inputs included assumptions related to the future performance of our contract drilling reporting unit, such as future oil and natural gas prices and projected demand for our services, and assumptions related to discount rate and long-term growth rate. Based on the results of the goodwill impairment test as of March 31, 2020, impairment was indicated in our contract drilling reporting unit. We recognized an impairment charge of $395 million in the quarter ended March 31, 2020 associated with the impairment of all of the goodwill in our contract drilling reporting unit. Intangible Assets — The following table presents the gross carrying amount and accumulated amortization of our intangible assets as of September 30, 2020 and December 31, 2019 (in thousands):
| September 30, 2020 |  |  | December 31, 2019 |
| Gross |  |  |  |  |  |  | Net |  |  | Gross |  |  |  |  |  |  | Net |
| Carrying |  |  | Accumulated |  |  | Carrying |  |  | Carrying |  |  | Accumulated |  |  | Carrying |
| Amount |  |  | Amortization |  |  | Amount |  |  | Amount |  |  | Amortization |  |  | Amount |
Customer relationships | $ | 28,000 |  |  | $ | (26,453 | ) |  | $ | 1,547 |  |  | $ | 28,000 |  |  | $ | (19,710 | ) |  | $ | 8,290 |
Developed technology |  | 55,772 |  |  |  | (24,484 | ) |  |  | 31,288 |  |  |  | 55,772 |  |  |  | (15,386 | ) |  |  | 40,386 |
Internal use software |  | 603 |  |  |  | (287 | ) |  |  | 316 |  |  |  | 482 |  |  |  | (214 | ) |  |  | 268 |
| $ | 84,375 |  |  | $ | (51,224 | ) |  | $ | 33,151 |  |  | $ | 84,254 |  |  | $ | (35,310 | ) |  | $ | 48,944 |
Amortization expense on intangible assets of approximately $5.3 million was recorded in each three month period ended September 30, 2020 and 2019, respectively. Amortization expense on intangible assets of approximately $15.9 million and $12.6 million was recorded in the nine months ended September 30, 2020 and 2019, respectively. Due to the decline in the market price of our common stock and commodity prices in the first quarter of 2020, we lowered our expectations with respect to future activity levels in certain of our operating segments. We deemed it necessary to assess the recoverability of our contract drilling, pressure pumping, directional drilling and oilfield rentals asset groups as of March 31, 2020. The assessments of recoverability of the asset groups included the respective intangible assets, and no impairment was indicated. See Note 5 for additional information.

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- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI http://asc.fasb.org/topic&trid=2144416 + Details
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