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Asset Impairments and Other Restructuring Items | 9 Months Ended
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Sep. 30, 2021
Restructuring and Related Activities [Abstract] |
Asset Impairments and Other Restructuring Items | Asset Impairments and Other Restructuring Items In March of 2020, the spot price of West Texas Intermediate ("WTI") crude oil declined over 50% in response to actual and forecasted reductions in global demand for crude oil due to the COVID-19 pandemic, coupled with announcements by Saudi Arabia and Russia of plans to increase crude oil production. Demand for most of the Company's products and services depends substantially on the level of capital expenditures by the oil and natural gas industry, and these conditions caused rapid reductions to most of the Company's customers' drilling, completion and production activities and their related spending on products and services, particularly those supporting activities in the U.S. shale play regions. While the prices of and demand for crude oil have increased significantly since reaching record low levels in April 2020, uncertainty remains regarding the timing of demand recovery to pre-COVID-19 levels and operators' willingness to invest in U.S. land-based drilling, completion and production activities given regulatory pressures around environmental, social and governance considerations. Following these March 2020 events, the Company immediately implemented significant cost reduction initiatives. The Company also assessed the carrying value of goodwill, long-lived and other assets based on the industry outlook regarding overall demand for and pricing of its products and services, other market considerations and the financial condition of the Company's customers. As a result of these events, actions and assessments, the Company recorded the following charges during the first quarter of 2020 (in thousands):
| Offshore/ Manufactured Products |  | Downhole Technologies |  | Well Site Services |  | Corporate |  | Pre-tax Total |  | Tax |  | After-tax Total
First quarter 2020 |  |  |  |  |  |  |  |  |  |  |  |  |
Impairments of: |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill | $ | 86,500 |  |  | $ | 192,502 |  |  | $ | 127,054 |  |  | $ | — |  |  | $ | 406,056 |  |  | $ | 19,600 |  |  | $ | 386,456 |
Fixed assets | — |  |  | — |  |  | 5,198 |  |  | — |  |  | 5,198 |  |  | 1,092 |  |  | 4,106 |
Inventories (Note 4) | 16,249 |  |  | — |  |  | 8,981 |  |  | — |  |  | 25,230 |  |  | 4,736 |  |  | 20,494 |
Severance and restructuring costs | 112 |  |  | — |  |  | 548 |  |  | — |  |  | 660 |  |  | 139 |  |  | 521 |
During the second and third quarters of 2020, the Company further reduced its workforce and closed additional facilities in the United States and continued to assess the carrying value of its assets based on the industry outlook regarding demand for and pricing of its products and services, and recorded the following charges (in thousands):
| Offshore/ Manufactured Products |  | Downhole Technologies |  | Well Site Services |  | Corporate |  | Pre-tax Total |  | Tax |  | After-tax Total
Second quarter 2020 |  |  |  |  |  |  |  |  |  |  |  |  |
Impairments of fixed assets | $ | — |  |  | $ | — |  |  | $ | 2,992 |  |  | $ | — |  |  | $ | 2,992 |  |  | $ | 628 |  |  | $ | 2,364 |
Severance and restructuring costs | 322 |  |  | 1,315 |  |  | 3,544 |  |  | 216 |  |  | 5,397 |  |  | 1,133 |  |  | 4,264 |
Third quarter 2020 |  |  |  |  |  |  |  |  |  |  |  |  |
Impairments of inventories (Note 4) | $ | — |  |  | $ | 5,921 |  |  | $ | — |  |  | $ | — |  |  | $ | 5,921 |  |  | $ | 1,243 |  |  | $ | 4,678 |
Severance and restructuring costs | 288 |  |  | — |  |  | — |  |  | — |  |  | 288 |  |  | 60 |  |  | 228 |
During the first nine months of 2021, the Company continued its restructuring efforts, closed additional facilities in the United States and continued to assess the carrying value of its assets based on management actions and the industry outlook regarding demand for and pricing of its products and services, and recorded the following charges (in thousands):
| Offshore/ Manufactured Products |  | Downhole Technologies |  | Well Site Services |  | Corporate |  | Pre-tax Total |  | Tax |  | After-tax Total
First quarter 2021 |  |  |  |  |  |  |  |  |  |  |  |  |
Impairments of fixed assets | $ | — |  |  | $ | — |  |  | $ | 650 |  |  | $ | — |  |  | $ | 650 |  |  | $ | 137 |  |  | $ | 513 |
Severance and restructuring costs | 282 |  |  | 275 |  |  | 1,306 |  |  | 1,555 |  |  | 3,418 |  |  | 717 |  |  | 2,701 |
Second quarter 2021 |  |  |  |  |  |  |  |  |  |  |  |  |
Impairments of operating lease assets | $ | — |  |  | $ | — |  |  | $ | 2,794 |  |  | $ | — |  |  | $ | 2,794 |  |  | $ | 587 |  |  | $ | 2,207 |
Severance and restructuring costs(1) | — |  |  | 203 |  |  | 2,351 |  |  | — |  |  | 2,554 |  |  | 536 |  |  | 2,018 |
Third quarter 2021 |  |  |  |  |  |  |  |  |  |  |  |  |
Impairment of inventories (Note 4) | $ | — |  |  | $ | 2,113 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,113 |  |  | $ | 444 |  |  | $ | 1,669 |
Severance and restructuring costs | 256 |  |  | 129 |  |  | 352 |  |  | — |  |  | 737 |  |  | 154 |  |  | 583 |
____________________ (1)Includes recognition of $1.9 million in additional lease-related liabilities associated with the exit of a long-term lease supporting the Well Site Services segment. Additionally, during the three and nine months ended September 30, 2021, the Company recognized $1.2 million and $8.8 million, respectively, in aggregate reductions to payroll tax expense (within cost of revenues and selling, general and administrative expense) as part of the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act") employee retention credit program. The Company continues to evaluate any and all benefits potentially available to it under the CARES Act. Goodwill Goodwill is allocated to each reporting unit based on acquisitions made by the Company and is assessed for impairment annually and when an event occurs or circumstances change that indicate the carrying amounts may not be recoverable. If the carrying amount of a reporting unit exceeds its fair value, goodwill is considered impaired and an impairment loss is recorded. The Company had three reporting units – Offshore/Manufactured Products, Downhole Technologies and Well Site Services – whose goodwill balances totaled $482.3 million as of December 31, 2019. Given the significance of the March 2020 events described above, the Company performed a quantitative assessment of goodwill for impairment as of March 31, 2020. This interim assessment indicated that the fair value of each of the reporting units was less than their respective carrying amounts due to, among other factors, the significant decline in the Company's stock price (and that of its peers) and reduced growth rate expectations given weak energy market conditions resulting from the demand destruction caused by the global response to the COVID-19 pandemic. In addition, the estimated returns required by market participants increased materially in the Company's March 31, 2020 assessment from the assessment performed as of December 1, 2019, resulting in higher discount rates used in the discounted cash flow analysis. Management utilizes, depending on circumstances, a combination of valuation methodologies including a market approach and an income approach, as well as guideline public company comparables. The fair values of the Company's reporting units were determined using significant unobservable inputs (Level 3 fair value measurements). Based on this quantitative assessment as of March 31, 2020, the Company concluded that goodwill recorded in the Downhole Technologies and Well Site Services segments was fully impaired while goodwill recorded in the Offshore/Manufactured Products segment was partially impaired. The Company therefore recognized non-cash goodwill impairment charges totaling $406.1 million in the first quarter of 2020, as presented in further detail in the table above. The Company performed its annual quantitative assessment of goodwill as of December 1, 2020, which indicated that the fair value of the Offshore/Manufactured Products segment was greater than its carrying amount and no additional provision for impairment was required. The Company's remaining goodwill within the segment totaled approximately $76.5 million as of September 30, 2021 and December 31, 2020. Long-lived Assets The Company also assesses the carrying value of long-lived assets, including property, plant and equipment, operating lease assets and other intangible assets held by each of its segments (reporting units). As a result of the March 2020 assessment, the Company concluded that certain drilling-related property and equipment held by the Well Site Services segment was impaired and recognized a non-cash fixed asset impairment charge of $5.2 million in the first quarter of 2020. During the nine months ended September 30, 2021, the Well Site Services segment recognized non-cash fixed and operating lease asset impairment charges of $3.4 million associated with the closure of additional facilities coupled with other management actions. During the nine months ended September 30, 2021, the segment also recorded an additional $1.9 million charge associated with the exit of a leased facility. Should, among other events and circumstances, global economic and industry conditions deteriorate, the COVID-19 pandemic business and market disruptions continue, the outlook for future operating results and cash flow for any of the Company's segments decline, income tax rates increase or regulations change, climate and environmental regulations change, costs of equity or debt capital increase, valuations for comparable public companies or comparable acquisition valuations decrease, or management implement strategic decisions based on industry conditions, the Company may need to recognize additional impairment losses in future periods.

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- Definition The entire disclosure of costs incurred for restructuring including, but not limited to, exit and disposal activities, remediation, implementation, integration, asset impairment, and charges against earnings from the write-down of assets. + References No definition available. + Details
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