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Impairments and Other Charges
 6 Months Ended
Jun. 30, 2020
Impairments and Other Charges [Abstract]  
Impairments and Other Charges
(8)
Impairments and Other Charges


During the 2020 first quarter, Kirby’s market capitalization declined significantly compared to the 2019 fourth quarter.  Over the same period, the overall United States stock market also declined significantly amid market volatility. In addition, as a result of uncertainty surrounding the outbreak of COVID-19 and a sharp decline in oil prices during the 2020 first quarter, many of the Company’s oil and gas customers responded by quickly cutting 2020 capital spending budgets and activity levels quickly declined.  Lower activity levels have resulted in a decline in drilling activity, resulting in lower demand for new and remanufactured oilfield equipment and related parts and service in the distribution and services segment.  As a result, the Company concluded that a triggering event had occurred and performed interim quantitative impairment tests as of March 31, 2020 for certain of the distribution and services segment’s long-lived assets and goodwill.



The Company determined the estimated fair value of such long-lived assets and reporting units using a discounted cash flow analysis and a market approach for comparable companies.  This analysis included management’s judgment regarding short-term and long-term internal forecasts, updated for recent events, appropriate discount rates, and capital expenditures using inputs characteristic of a Level 3 fair value measurement.


In performing the impairment test of long-lived assets within the distribution and services segment, the Company determined that the carrying value of certain long-lived assets, including property and equipment as well as intangible assets associated with customer relationships, tradenames, and distributorships, were no longer recoverable, resulting in an impairment charge of $165,304,000 to reduce such long-lived assets to fair value during the three months ended March 31, 2020.


Based upon the results of the goodwill impairment test, the Company concluded that the carrying value of one reporting unit in the distribution and services segment exceeded its estimated fair value. For the three months ended March 31, 2020, the goodwill impairment charge of $387,970,000 was calculated as the amount that the carrying value of the reporting unit, including goodwill, and after recording impairments of long-lived assets identified above, exceeded its estimated fair value, incorporating all tax impacts caused by the recognition of the impairment loss.


In addition, the Company determined cost exceeded net realizable value for certain oilfield and pressure pumping related inventory, resulting in an $8,000,000 non-cash write-down during the three months ended March 31, 2020.


The following table summarizes the changes in goodwill (in thousands):

 
  
Marine
Transportation
    
Distribution and
Services
    
Total
  
Balance at December 31, 2019 (gross)
  
$
424,149
    
$
549,846
    
$
973,995
  
Accumulated impairment and amortization
    
(18,574
)
    
(1,595
)
    
(20,169
)
Balance at December 31, 2019
    
405,575
      
548,251
      
953,826
  
Impairment
    
—
      
(387,970
)
    
(387,970
)
Savage acquisition
    
81,667
      
—
      
81,667
  
Convoy acquisition
    
—
      
10,309
      
10,309
  
Balance at June 30, 2020 (gross)
    
505,816
      
560,155
      
1,065,971
  
Accumulated impairment and amortization
    
(18,574
)
    
(389,565
)
    
(408,139
)
Balance at June 30, 2020
  
$
487,242
    
$
170,590
    
$
657,832