Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

We determined that the unprecedented industry conditions described in “Note 1 – General” are triggering events in our qualitative goodwill assessment that required us to review the recoverability of our long-lived assets as discussed in “Note 6 - Long-Lived Asset Impairments” and then subsequent to the recognition of long-lived assets impairment, we performed an interim quantitative goodwill assessment as of March 31, 2020 and as of June 30, 2020. Our quantitative goodwill impairment assessment is based on discounted cash flow analysis and a multiples-based market approach for comparable companies in our industry, a Level 3 fair value analysis. The analysis includes significant judgments, including estimated future cash flows, estimates of discount rates, revenue growth rates, profitability margins and capital expenditures. Goodwill impairment occurs when the carrying amount of a reporting unit exceeds the fair value. Based upon our goodwill impairment assessment, in the second quarter of 2020 we recognized a goodwill impairment of $72 million on our Russia reporting unit in addition to the goodwill impairment recognized in the first quarter of 2020 of $167 million for our Middle East & North Africa (“MENA”) and Russia reporting units. The total goodwill impairment for the six months ended June 30, 2020 was $239 million. These recognized impairments reduced the carrying value of our goodwill in our MENA reporting unit by $127 million and our Russia reporting unit by $112 million, which are both part of our Eastern Hemisphere segment.

The changes in the carrying amount of goodwill by reporting segment at June 30, 2020, are presented in the following table.


(Dollars in millions)	Western Hemisphere		Eastern Hemisphere		Total
Balance at December 31, 2019	$	—	$	239	$	239
Impairment	—		(239)		(239)




Balance at June 30, 2020	$	—	$	—	$	—

For the three and six months ended June 30, 2019, the Predecessor goodwill impairment tests indicated that goodwill was impaired and as a result the Predecessor incurred a charge of $102 million and $331 million, respectively. The impairment indicators were a result of lower activity levels and lower exploration and production capital spending that resulted in a decline in drilling activity and forecasted growth in the North America, Asia and MENA reporting units.

Intangible Assets

The components of definite-lived intangible assets, net of accumulated amortization, were as follows:


(Dollars in millions)	6/30/2020		12/31/2019
Developed and Acquired Technology	$	502	$	721
Trade Names	373		393
Totals	$	875	$	1,114

For the three and six months ended of 2020, based on our impairment test, we recognized impairments of $22 million and $159 million, respectively, of our developed and acquired technology. Amortization expense was $40 million and $86 million for the three and six months ended June 30, 2020, respectively, and $16 million and $32 million for the three and six months ended June 30, 2019 and is reported in Selling, General and Administrative on our Condensed Consolidated Statements of Operations. At June 30, 2020, accumulated amortization was $73 million for Developed and Acquired Technology and $22 million for Trade Names.