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Intangibles, net
12 Months Ended
Dec. 31, 2020
Intangible Assets Net Excluding Goodwill [Abstract]  
Intangibles, net

8. Intangibles, net

Identified intangible assets with determinable lives consist primarily of customer relationships, trade names, trademarks and patents, and non-compete agreements acquired in acquisitions, and are being amortized on a straight-line basis over the estimated useful lives. Intangible assets that are fully amortized are removed from the disclosures.

During the first quarter of 2020, the results of the Company's test for impairment of goodwill and the other negative market indicators described in Note 7 “Goodwill” were a triggering event that indicated that its long-lived assets, including property, plant and equipment, operating right-of-use assets and intangible assets, were possibly impaired. Therefore, the Company performed a recoverability test and the results indicated that long-lived assets associated with three reporting units were not recoverable. Further, the estimated fair value of these assets was determined to be below their carrying value. As a result, the Company recognized $90 million of impairments of long-lived assets for the quarter ended March 31, 2020 and the year ended December 31, 2020, which were included in impairment charges in the consolidated statements of operations. A tax benefit of $4 million was also recognized related to the long-lived asset impairments. No triggering events were identified subsequently in 2020 to indicate that the remaining carrying value of long-lived assets were not recoverable.

The impairment of long-lived assets recognized in the first quarter and year ended 2020 is shown as follows (in millions):

 

 

United States

 

 

International

 

 

Total

 

Intangibles, net

 

$

(62

)

 

$

(22

)

 

$

(84

)

Property, plant and equipment, net

 

 

 

 

 

(4

)

 

 

(4

)

Operating right-of-use assets

 

 

(1

)

 

 

(1

)

 

 

(2

)

Total impairment

 

$

(63

)

 

$

(27

)

 

$

(90

)

During the fourth quarter of 2019, the Company made strategic decisions to discontinue the use of certain acquired trade names in order to eliminate branding dilution in the market and align the Company’s marketing around its DNOW brands. As of December 31, 2019, the Company completed the disposals of these trade names by abandonment and recognized impairment charges of $34 million in the U.S. reporting segment and $4 million in the International reporting segment. Such impairment was included in impairment charges in the consolidated statements of operations, representing the remaining carrying values of these specifically acquired intangible assets. The Company did not record impairment for intangible assets for the year ended December 31, 2018.

As of December 31, 2019, identified intangible assets by major classification, affected by the fluctuation of foreign currency rates, consist of the following (in millions):

 

 

 

 

 

 

 

Accumulated

 

 

Net Book

 

 

 

Gross

 

 

Amortization

 

 

Value

 

December 31, 2019:

 

 

 

 

 

 

 

 

 

 

 

 

Trademarks and patents

 

$

38

 

 

$

(9

)

 

$

29

 

Customer relationships

 

 

116

 

 

 

(57

)

 

 

59

 

Other

 

 

2

 

 

 

 

 

 

2

 

Total identified intangibles

 

$

156

 

 

$

(66

)

 

$

90

 

As of December 31, 2020, identified intangible assets were less than $1 million. Amortization expense was $4 million, $19 million and $20 million for the years ended December 31, 2020, 2019, and 2018, respectively.