GOODWILL AND OTHER INTANGIBLE ASSETS

6 Months Ended

Jun. 30, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

The changes to goodwill for the six months ended June 30, 2015 were as follows (in thousands):



	2015
Balance at January 1, 2015	$	452,669
Acquired from acquisitions	36,591
Increase from adjustments during the measurement period related to recent acquisitions	3,841
Goodwill impairment charge	(31,992		)
Foreign currency translation	(8,251		)
Balance at June 30, 2015	$	452,858

The Company assesses goodwill for impairment on an annual basis as of December 31, or at an interim date when events or changes in the business environment would more likely than not reduce the fair value of a reporting unit below its carrying value. The Company conducted the annual impairment test of goodwill for all reporting units as of December 31, 2014 and determined that no adjustment to the carrying value of goodwill for any reporting unit was necessary because the fair value of each of the reporting units exceeded that reporting unit's respective carrying value.

As disclosed in the Company's annual report on form 10K for the year ended December 31, 2014, the fair value of the Oil and Gas Field Services reporting unit did not significantly exceed its carrying amount. During the first quarter of 2015, the Company evaluated the reporting unit’s performance along with other business specific, and macroeconomic industry factors and concluded that no interim impairment test was necessary.

During the quarter ended June 30, 2015, certain events and changes in circumstances arose which led management of the Company to conclude that the fair value of the Oil and Gas Field Services reporting unit may be less than its carrying value and therefore an interim impairment test was conducted relative to goodwill recorded by the Oil and Gas Field Services reporting unit. The primary events and changes in circumstances which led to this conclusion were:

•

The second quarter is the period of time where greater levels of communication with customers and the receipt of bids and proposals for project work takes place and provide management with more clarity into levels of activity and other economic and business indicators for the latter half of the fiscal year and into the first quarter of the following year. During the quarter ended June 30, 2015 it became apparent that oil and gas exploration and production activity would continue to be lower than historical periods and lower than previously anticipated by the Company. This was evidenced by reduced volume in bid and proposal requests from customers and communications indicating the reduction in customer budgets in these areas as well as lower than anticipated pricing for our services.

•

Market and industry reports which management looks to in projecting business conditions and establishing forecast information evidenced more pessimistic views in the near term. The continued depressed price of oil without any upward momentum since December 2014 as well as declining and expected continued decline in rig count for the remainder of 2015 have resulted in lower estimates of industry activity in the second half of 2015 and early 2016.


•	In recognition of lower than anticipated business results and less optimistic market indicators, management significantly lowered its 2015 forecasts relative to the Oil and Gas reporting unit.

In performing Step I of this interim goodwill impairment test, the estimated fair value of the Oil and Gas Field Services reporting unit was determined using an income approach based upon discounted cash flows and was compared to the reporting unit's carrying value as of June 30, 2015. Based on the results of that valuation, the carrying amount of the reporting unit, including $32.0 million of goodwill, exceeded its estimated fair value and as a result the Company performed Step II of the goodwill impairment test to determine the amount of goodwill impairment charge to be recorded.

Step II of the goodwill impairment test required the Company to perform a theoretical purchase price allocation for the reporting unit to determine the implied fair value of goodwill and to compare the implied fair value of goodwill to the recorded amount. The estimates of the fair values of intangible assets identified in performing this theoretical purchase price allocation and resulting implied fair value of goodwill required significant judgment. Based on the results of this goodwill impairment test the implied value of goodwill was $0 and as such the Company recognized a goodwill impairment charge equal to the recorded amount of goodwill or $32.0 million as of June 30, 2015.

The factors contributing to the $32.0 million goodwill impairment charge principally related to events and changes in circumstances discussed above which had negative impacts on the Company’s prospective financial information utilized in its discounted cash flow model prepared in connection with the interim impairment test. The currently projected lower levels of activity and pricing in the latter half of the year which became evident during the second quarter decreased the reporting unit’s anticipated future cash flows for 2015 as compared to those estimated previously. These factors have also provided evidence of a longer than expected overall recovery from current industry lows which negatively impacted the estimated levels of cash flows in future periods that are assumed in the cash flow models utilized in the interim impairment test. These factors adversely affected the estimated fair value of the reporting unit as of June 30, 2015 and ultimately led to the recognition of the goodwill impairment charge.

Significant judgments and unobservable inputs categorized as Level III in the fair value hierarchy are inherent in the impairment tests performed and include assumptions about the amount and timing of expected future cash flows, growth rates, and the determination of appropriate discount rates. The Company believes that the assumptions used in its annual and any interim date impairment tests are reasonable, but variations in any of the assumptions may result in different calculations of fair values and impairment charges.

The Company also performed an analysis to consider whether the reporting unit's carrying values of finite-lived intangible and other long lived assets may not be entirely recoverable. As of June 30, 2015 the Oil and Gas Field Services reporting unit had property, plant and equipment, net of $185.3 million, other intangible assets of $20.1 million consisting of: permits of $0.1 million, customer and supplier relationships of $10.7 million and other intangible assets of $9.3 million. Based on this analysis, sufficient undiscounted cash flows were available over those assets' remaining lives to demonstrate recoverability and thus no impairment exists.

Below is a summary of amortizable other intangible assets (in thousands):



	June 30, 2015							December 31, 2014
	Cost		Accumulated Amortization		Net		Weighted Average Remaining Amortization Period (in years)	Cost		Accumulated Amortization		Net		Weighted Average Remaining Amortization Period (in years)
Permits	$	163,036	$	59,430	$	103,606	19.1	$	156,692	$	55,318	$	101,374	19.0
Customer and supplier relationships	384,722		88,471		296,251		10.6	370,373		77,697		292,676		11.0
Other intangible assets	32,353		20,354		11,999		2.4	31,540		19,074		12,466		3.2
Total amortizable permits and other intangible assets	580,111		168,255		411,856		10.7	558,605		152,089		406,516		11.4
Trademarks and trade names	122,765		—		122,765		Indefinite	123,564		—		123,564		Indefinite
Total permits and other intangible assets	$	702,876	$	168,255	$	534,621		$	682,169	$	152,089	$	530,080

Amortization expense of permits and other intangible assets for the three and six months ended June 30, 2015 and was $8.8 million and $19.8 million, respectively. Amortization expense of permits and other intangible assets for the three and six months ended June 30, 2014 was $8.9 million and $18.4 million, respectively.

Below is the expected future amortization of the net carrying amount of finite-lived intangible assets at June 30, 2015 (in thousands):



Years Ending December 31,	Expected Amortization
2015 (six months)	$	18,761
2016	37,120
2017	34,506
2018	31,440
2019	27,730
Thereafter	262,299
	$	411,856

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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