Asset Impairments and Write-Downs Asset Impairments and Write-Downs

9 Months Ended

Sep. 30, 2019

Long-Lived Asset Impairments [Abstract]

Asset Impairment Charges [Text Block]

7.  Long-Lived Asset Impairments

We recognized no long-lived asset impairments in the third quarter of 2019 and $20 million of long-lived asset impairments for the nine months ended September 30, 2019, and $69 million and $161 million for the three and nine months ended September 30, 2018, respectively, to write-down our assets to the lower of carrying amount or fair value less cost to sell for our land drilling rigs. The impairments in 2019 were primarily related to our Western Hemisphere segment in the second quarter of 2019 totaling $13 million and Eastern Hemisphere in the first quarter of 2019 totaling $7 million. The impairments recognized for the nine months ended September 30, 2018, were comprised of $37 million from our Western Hemisphere segment and $124 million from our Eastern Hemisphere segment. During the second quarter of 2019, we reclassified our remaining land drilling rigs assets back into held for use.

The impairments were due to the sustained downturn in the oil and gas industry that resulted in us having to reassess our disposal groups for our land drilling rigs. The change in our expectations of the market’s recovery, in addition to successive negative operating cash flows in certain disposal asset groups represented an indicator that those assets will no longer be recoverable over their remaining useful lives. The Level 3 fair values of the long-lived assets were determined using a combination of the market and income approach. The market approach considered market sales values for similar assets. The unobservable inputs to the income approach included the assets’ estimated future cash flows and estimates of discount rates commensurate with the assets’ risks.