Long-Lived Asset Impairments (Notes)

12 Months Ended

Dec. 31, 2015

Property, Plant and Equipment [Abstract]

Long-lived and Other Asset Impairments

Long-Lived Asset Impairments

We recognized total long-lived impairment charges of $638 million in 2015 due to the continued weakness in crude oil prices contributing to lower exploration and production spending and a decline in the utilization of our assets. The decline in oil prices and its impact on demand represented a significant adverse change in the business climate and an indication that these long-lived assets may not be recoverable. Based on the presence of impairment indicators, we performed an analysis of these asset groups and recorded long-lived asset impairment charges to adjust the assets to fair value.

During the second quarter of 2015, we recognized long-lived asset impairment charges of $124 million in our pressure pumping assets of our North America segment. In the fourth quarter of 2015 we recorded impairment charges of $126 million, $72 million and $61 million, respectively, to our drilling tools, pressure pumping and wireline assets in our North America segment and $255 million in our Land Drilling Rigs segment. The fair value of our drilling tools, pressure pumping, and wireline assets were estimated using a combination of the income approach, the cost approach, and the market approach. See “Note 14 – Fair Value of Financial Instruments, Assets and Equity Investments” for additional information regarding the fair value determination.

In the fourth quarter of 2014, a significant decline in crude oil prices contributed to lower anticipated exploration and production spending and a decline in the anticipated utilization of our drilling rig fleet. Based on the impairment indicators noted we performed an analysis of our drilling rig fleet and recorded long-lived asset impairment charges of $352 million to adjust the assets of our Land Drilling Rig business to fair value. The impairment charges included the impairment of our drilling rigs and certain related intangible assets. To determine the fair value of these assets we utilized an income approach.

In July 2014, we completed the sale of our rig operations in Russia and Venezuela. We expected the sale would significantly impact the revenues and results of operations of our Russia reporting unit. As a result of our commitment to sell, we recorded a $143 million long-lived assets impairment charge during the second quarter of 2014.