Asset Impairments and Other Restructuring Items

12 Months Ended

Dec. 31, 2021

Restructuring and Related Activities [Abstract]

Asset Impairments and Other Restructuring Items

During 2019, the Company recorded the following charges (in thousands):


	Offshore/ Manufactured Products		Downhole Technologies		Well Site Services		Corporate		Pre-tax Total		Tax		After-tax Total
Impairments of:
Goodwill (Note 5)	$	—	$	165,000	$	—	$	—	$	165,000	$	—	$	165,000
Fixed assets (Note 4)	—		—		33,697		—		33,697		7,076		26,621
Severance and restructuring costs	1,655		—		1,847		—		3,502		735		2,767

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. As 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, these conditions caused rapid reductions to most of the Company's customers' drilling, completion and production activities and their related spending on the Company's products and services, particularly those supporting activities in the U.S. shale play regions, until the supply/demand imbalances eased. 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 the willingness of operators 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 2020 (in thousands):


	Offshore/ Manufactured Products		Downhole Technologies		Well Site Services		Corporate		Pre-tax Total		Tax		After-tax Total
Impairments of:
Goodwill (Note 5)	$	86,500	$	192,502	$	127,054	$	—	$	406,056	$	19,600	$	386,456
Fixed assets (Note 4)	—		1,623		8,845		—		10,468		2,198		8,270
Operating lease assets (Note 7)	—		1,979		—		—		1,979		416		1,563
Inventories (Note 4)	16,249		5,921		8,981		—		31,151		5,979		25,172
Severance and restructuring costs	1,355		2,018		4,311		1,385		9,069		1,904		7,165

During 2021, the Company continued its restructuring efforts, closed additional facilities in the United States, liquidated an international operation 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
Impairments of:
Fixed assets (Note 4)	$	—	$	—	$	1,372	$	—	$	1,372	$	289	$	1,083
Operating lease assets (Note 7)	—		—		2,794		—		2,794		587		2,207
Inventories (Note 4)	—		2,113		1,468		—		3,581		752		2,829
Severance and restructuring costs(1)	868		809		4,266		1,555		7,498		1,573		5,925
Release of foreign currency translation adjustments on liquidation of an international operation (Note 8)	—		—		—		9,320		9,320		—		9,320

____________________

(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 2021, the Company recognized $8.8 million 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.

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.