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Impairments and Other Charges | 12 Months Ended
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Dec. 31, 2019
Impairments and Other Charges |
Impairments and Other Charges | Note 3 Impairments and Other Charges ​ The components of impairments and other charges are provided below: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | Year Ended December 31, | ​
​ |  |  | 2019 |  | 2018 |  | 2017 |
​ | ​ | ​ | (In thousands) | ​
Tangible Assets & Equipment: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Provision for retirement of assets | ​ | ​ | $ | 33,205 | ​ | $ | 14,617 | ​ | $ | — | ​
Impairment of long-lived assets | ​ | ​ | ​ | 10,363 | ​ | ​ | 45,570 | ​ | ​ | 6,895 | ​
Subtotal | ​ | ​ | ​ | 43,568 | ​ | ​ | 60,187 | ​ | ​ | 6,895 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Goodwill & Intangible Assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Goodwill impairments | ​ | ​ | ​ | 155,973 | ​ | ​ | — | ​ | ​ | — | ​
Intangible asset impairment | ​ | ​ | ​ | 47,731 | ​ | ​ | — | ​ | ​ | — | ​
Subtotal | ​ | ​ | ​ | 203,704 | ​ | ​ | — | ​ | ​ | — | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Other Charges: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Provision for international activities | ​ | ​ | ​ | 43,220 | ​ | ​ | — | ​ | ​ | — | ​
Severance and transaction-related costs | ​ | ​ | ​ | 11,447 | ​ | ​ | 14,323 | ​ | ​ | 21,628 | ​
Loss (gain) on debt buyback | ​ | ​ | ​ | (11,468) | ​ | ​ | 5,268 | ​ | ​ | 16,013 | ​
Divestiture of International assets | ​ | ​ | ​ | — | ​ | ​ | 64,668 | ​ | ​ | — | ​
Total | ​ | ​ | $ | 290,471 | ​ | $ | 144,446 | ​ | $ | 44,536 | ​
​ For the year ended December 31, 2019 ​ Tangible Assets and Equipment ​ During 2019, as a result of the extended period of reduced demand for some of our legacy asset classes, we retired some of our rigs within our Canada Drilling and International Drilling reportable segments resulting in a loss of $17.8 million and $15.4 million, respectively. Additionally, we recorded impairments totaling $2.5 million comprised of underutilized offshore platform rigs in our International Drilling reportable segment. These impairments resulted from the lack of future contractual opportunities on specific rigs as result of current market conditions across certain geographic regions. The balance of the impairment charge primarily related to obsolete inventory within our Rig Technologies reportable segment. ​ Goodwill impairments ​ During 2019, we recognized goodwill impairment charges of $156.0 million. As part of our annual goodwill impairment test performed during the second quarter of 2019, we determined the carrying value of some of our reporting units exceeded their fair value. As such, we recognized impairments of $75.6 million for the remaining goodwill balance attributable to our International Drilling operating segment and $18.0 million for a partial impairment to our goodwill balance attributable to the acquisition of 2TD reported within our Rig Technologies operating segment. These non-cash pre-tax impairment charges were primarily the result of a sustained decline in our market capitalization and lower future cash flow projections due to expectations for future commodity prices below previous projections and the resulting impact on the lower demand projections for our products and services within these reporting units. ​ During the fourth quarter of 2019, due to current industry conditions such as the drop in U.S. rig count as well as the recent commodity prices and the corresponding impact on future expectations of demand for our products and services, including the effect that these factors have had on our stock price, we performed a quantitative impairment assessment of our goodwill as of December 31, 2019. Based on the results of our goodwill test, we recognized additional impairment charges of $52.2 million for the remaining goodwill balance attributable to our U.S. Drilling operating segment and $10.1 million for the remaining goodwill balance attributable to the acquisition of 2TD within our Rig Technologies operating segment. ​ ​ Intangible impairments ​ We determined the fair value of our rotary steerable tools in-process research and development intangible asset associated with our acquisition of 2TD was less than the current book value. As such, we recognized an impairment of $47.7 million to write off the intangible asset due to uncertainty in commercialization and demand stemming from lower commodity prices and rig counts. ​ Provision for international activities ​ During 2019, we recorded provisions aggregating to $43.2 million for certain assets, including receivables related to our international activities. The provisions were attributable to a number of foreign countries, which have been adversely impacted by foreign sanctions or other political risk issues, bankruptcies or other financial problems. ​ Severance and transaction related costs ​ During 2019, we recognized charges of $11.4 million due to severance and other related costs incurred to right-size our cost structure. ​ Loss (gain) on early extinguishment of debt ​ During 2019, we repurchased $468.3 million aggregate principal amount of our senior notes and recognized a gain of $11.5 million as part of the debt extinguishment. See Note 10—Debt for additional discussion. ​ For the year ended December 31, 2018 ​ Tangible Assets and Equipment ​ During 2018, as a result of the decline in oil and gas prices in the fourth quarter and the extended period of reduced demand for some of our legacy asset classes, we retired 13 of our remaining SCR rigs within the U.S. Drilling reportable segment resulting in a loss of $14.6 million. Additionally, we recorded impairments totaling $45.6 million primarily comprised of underutilized rigs in our International Drilling and U.S. Drilling reportable segments. These impairments were deemed necessary due to the lack of future contractual opportunities on specific rigs as result of a change in market conditions across certain geographic regions. The balance of the impairment charge primarily related to obsolete inventory within our Rig Technologies reportable segment. ​ Transaction related costs ​ During 2018, we incurred $14.3 million in transaction related costs, including professional fees, severances, facility closure costs and other cost rationalization items, primarily in connection with the acquisition of Tesco. ​ Loss (gain) on early extinguishment of debt ​ During 2018, we repurchased $873.0 million aggregate principal amount of our senior notes. We paid the holders an aggregate of approximately $906.5 million in cash, reflecting principal and accrued and unpaid interest and prepayment premium and recognized a loss of $5.3 million as part of the debt extinguishment. See Note 10—Debt for additional discussion. ​ Divestiture of International assets ​ During 2018, we recognized a loss of $64.7 million on the sale of three offshore drilling rigs and eight workover rigs within our International Drilling reportable segment. ​ ​ ​ ​ For the year ended December 31, 2017 ​ Tangible Assets and Equipment ​ In 2017, we recorded impairments totaling $6.9 million primarily comprised of underutilized rigs in our International Drilling reportable segment. These impairments were deemed necessary due to the lack of future contractual opportunities because the rigs were smaller and lower horsepower than our newer rigs and also rigs competing in an overcrowded offshore market. ​ Transaction related costs ​ During 2017, we incurred $21.6 million in transaction related costs, including professional fees, severances, facility closure costs and other cost rationalization items, primarily in connection with the acquisition of Tesco. ​ Loss (gain) on early extinguishment of debt ​ During 2017, we repurchased $367.9 million aggregate principal amount of our senior notes. We paid the holders an aggregate of approximately $381.7 million in cash, reflecting principal and accrued and unpaid interest and prepayment premium and recognized a loss of $16.0 million as part of the debt extinguishment. See Note 10—Debt for additional discussion.

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