XML 28 R17.htm IDEA: XBRL DOCUMENT
v3.24.1.u1

Goodwill and Intangible Assets | 3 Months Ended
--- | ---
Mar. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Intangible Assets | 7. Goodwill and Intangible Assets Goodwill — During the three months ended March 31, 2024, we had no additions or impairments to goodwill. Goodwill by reportable segment as of March 31, 2024 is as follows (in thousands):
| Completion Services |  | Drilling Products |  | Total
Balance at beginning and end of period | $ | 922,125 |  |  | $ | 457,616 |  |  | $ | 1,379,741 |
Goodwill is evaluated at least annually on July 31, or more frequently when events and circumstances occur indicating recorded goodwill may be impaired. Goodwill is tested at the reporting unit level, which is at or one level below 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 that is the case, any necessary goodwill impairment is determined using a quantitative impairment test. 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. We determined our drilling products operating segment consists of a single reporting unit and, accordingly, goodwill acquired from the Ulterra acquisition was allocated to that reporting unit. We determined our completion services operating segment consists of two reporting units; completion services, which is primarily comprised of our hydraulic fracturing operations and other integrated service offerings, and cementing services. Goodwill Impairment Assessment During the fourth quarter of 2023, our share price experienced a sustained decline which resulted in a decrease to our market capitalization. This decline in share price was deemed a triggering event that warranted a quantitative assessment for goodwill impairment for our three reporting units with goodwill. We estimated the fair value of the drilling products and the completion services reporting units using the income approach. Under this approach, we used a discounted cash flow model, which utilizes present values of cash flows to estimate fair value. Forecasted cash flows reflected known market conditions as of December 31, 2023, and management's anticipated business outlook for each reporting unit. Future cash flows were projected based on estimates of revenue, gross profit, selling, general and administrative expense, changes in working capital, and capital expenditures. The terminal period used within the discounted cash flow model for each reporting unit consisted of a 1% growth estimate. Future cash flows were then discounted using a market-participant, risk-adjusted weighted average cost of capital of 10% for the drilling products reporting unit and 12% for the completion services reporting unit. We estimated the fair value of the cementing services reporting unit using a market approach. The market approach was based on trading multiples of companies comparable to the cementing services reporting unit. Based on the results of the goodwill impairment tests, the fair values of the drilling products, completion services, and cementing services reporting units exceeded their carrying values by approximately 4%, 11%, and 80%, respectively. Accordingly, no impairment was recorded for any of the reporting units. During the first quarter of 2024, we determined there were no events that would indicate the carrying value of goodwill may not be recoverable or that a potential impairment exists. Geopolitical instability, a global decrease in the demand of drilling products, or other unforeseen macroeconomic considerations could negatively impact the key assumptions used in our goodwill assessment for our drilling products reporting unit. A sustained decrease in oil prices and rig count could negatively affect the key assumptions used in our goodwill assessment for completion services. A decrease in fair value resulting from unfavorable changes to these assumptions, or others, could result in goodwill impairment in future periods that could be material to our results of operations and financial statements as a whole. Intangible Assets — The following table presents the gross carrying amount and accumulated amortization of our intangible assets as of March 31, 2024 and December 31, 2023 (in thousands):
| March 31, 2024 |  | December 31, 2023
| Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount
Customer relationships | $ | 785,591 |  |  | $ | (43,160) |  |  | $ | 742,431 |  |  | $ | 786,715 |  |  | $ | (25,563) |  |  | $ | 761,152 |
Developed technology | 202,772 |  |  | (26,467) |  |  | 176,305 |  |  | 202,772 |  |  | (16,435) |  |  | 186,337 |
Trade name | 101,000 |  |  | (5,906) |  |  | 95,094 |  |  | 101,000 |  |  | (3,406) |  |  | 97,594 |
Other | 10,281 |  |  | (1,107) |  |  | 9,174 |  |  | 7,345 |  |  | (731) |  |  | 6,614 |
Intangible assets, net | $ | 1,099,644 |  |  | $ | (76,640) |  |  | $ | 1,023,004 |  |  | $ | 1,097,832 |  |  | $ | (46,135) |  |  | $ | 1,051,697 |
Amortization expense on intangible assets of approximately $30.5 million and $0.8 million was recorded for the three months ended March 31, 2024 and 2023, respectively.

X
- References No definition available. + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 350 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//350/tableOfContent + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration