Summary Of Major Accounting Policies Long-lived Assets (Tables)

3 Months Ended

Mar. 31, 2020

Details of Impairment of Long-Lived Assets Held and Used by Asset [Table Text Block]

Property and Equipment, Long-Lived Intangible Assets and Right-of-Use Operating Lease Assets. We provide for depreciation of assets included in property and equipment on the straight-line method over their estimated useful lives. We charge the costs of repair and maintenance of property and equipment to operations as incurred, while we capitalize the costs of improvements that extend asset lives or functionality. Upon the disposition of property and equipment, the related cost and accumulated depreciation accounts are relieved, and any resulting gain or loss is included as an adjustment to cost of services and products.

Long-lived intangible assets, primarily acquired in connection with business combinations, include trade names, intellectual property and customer relationships and are being amortized over their estimated useful lives.

Right-of-use operating lease assets are recognized based on the present value of the future minimum lease payments over the lease term at commencement or modification date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate, based on the information available at commencement or modification date in determining the present value of future payments. In determining the incremental borrowing rate, we considered our external credit ratings, bond yields for us and peer companies, the risk-free rate in geographic regions where we operate, and the impact associated with providing collateral over a similar term as the lease for an amount equal to the lease payments. Our right-of-use operating lease assets also include any lease prepayments made and exclude lease incentives and initial direct costs incurred. Our lease terms may include options to extend or terminate the lease. These options are included in the lease term when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

We capitalize interest on assets where the construction period is anticipated to be more than three months. We capitalized no interest and $2.0 million of interest in the three-month periods ended March 31, 2020 and 2019, respectively. We do not allocate general administrative costs to capital projects.

Our management periodically, and upon the occurrence of a triggering event, reviews the realizability of our property and equipment, long-lived intangible assets and right-of-use operating lease assets to determine whether any events or changes in circumstances indicate that the carrying amounts of the assets may not be recoverable. For long-lived assets to be held and used, we base our evaluation on impairment indicators such as the nature of the assets, the future economic benefits of the assets, any historical or future profitability measurements and other external market conditions or factors that may be present. If such impairment indicators are present or other factors exist that indicate that the carrying amount of an asset may not be recoverable, we determine whether an impairment has occurred by utilization of an undiscounted cash flows analysis of the asset at the lowest level for which identifiable cash flows exist. If an impairment has occurred, we recognize a loss for the difference between the carrying amount and the fair value of the asset.

Due to the protracted energy downturn compounded with demand destruction and insufficient control of supply levels, our customers' continued focus on cost discipline, and adverse impacts of COVID-19, we determined that impairment indicators were present within certain of our asset groups in our Subsea Products, Subsea Projects and Advanced Technologies segments in the first quarter of 2020. For our Subsea Products segments, impairment indicators were present in our Subsea Distributions Solutions asset group. For our Subsea Projects segment, impairment indicators were present in our Shallow Water vessels, Renewables and Special Projects and Global Data Solutions asset groups. For our Advanced Technologies segment, impairment indicators were present in our

Oceaneering Entertainment Systems and Oceaneering AGV Systems asset groups. To measure market value for our asset groups, we used the following approaches:


•	Subsea Distribution Solutions U.K. - We utilized the cost approach and considered economic obsolescence under the income approach to determine fair value of the property and equipment.


•	Subsea Distribution Solutions Brazil and Angola - We utilized a combination of market and cost approaches to measure fair values.


•	Shallow Water vessels - We utilized the cost approach and considered historical, current and anticipated dayrates and utilization to measure market value.


•	Renewables and Special Projects - We utilized a combination of market and cost approaches to measure fair values.


•	Oceaneering Entertainment Systems and Oceaneering AGV Systems - We utilized a combination of market and cost approaches to measure fair value.

Our estimates of fair values for the asset groups in our Subsea Products, Subsea Projects and Advanced Technologies segments required us to use significant unobservable inputs, classified as Level 3 fair value measurements, including assumptions related to future performance, risk-adjusted discount rates, future commodity prices and demand for our services and estimates of expected realizable value. For our cash flow projections, we utilized a weighted average cost of capital ranging between 12% and 15% and a terminal value based on the Gordon Growth Model assuming an expected long-term growth rate of 2%.

We determined that the carrying values exceeded the estimated fair values and, as a result, recorded impairments as noted below:



		Three Months Ended March 31, 2020
(in thousands)		Property and Equipment, Net		Intangible Assets		Right-of-Use Operating Lease Assets		Total
Subsea Products
	Subsea Distribution Solutions U.K.	$	6,543	$	—	$	—	$	6,543
	Subsea Distribution Solutions Brazil	9,834		—		—		9,834
	Subsea Distribution Solutions Angola	25,941		—		12,541		38,482
Subsea Projects
	Shallow Water vessels	3,894		—		—		3,894
	Renewables and Special Projects group	3,628		—		—		3,628
	Global Data Solutions	—		167		—		167
Advanced Technologies
	Oceaneering Entertainment Systems	1,593				3,472		5,065
	Oceaneering AGV Systems	145		310		695		1,150
	Total long-lived assets impairments	$	51,578	$	477	$	16,708	$	68,763

For additional information regarding write-downs and write-offs of property and equipment, long-lived intangible assets and right-of-use operating lease assets in the three months ended March 31, 2020 and December 31, 2019, see Note 9—"Business Segment Information." We did not record any impairments of long-lived assets in the three months ended March 31, 2019.

For assets held for sale or disposal, the fair value of the asset is measured using fair market value less estimated costs to sell. Assets are classified as held-for-sale when we have a plan for disposal of certain assets and those assets meet the held for sale criteria.