Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The impairment indicators discussed in “Note 5 - Long-Lived Asset Impairments” triggered interim quantitative goodwill assessments as of March 31, 2020 and June 30, 2020. Our quantitative goodwill impairment assessments were based on a discounted cash flow analysis and a multiples-based market approach for comparable companies in our industry, a Level 3 fair value analysis. The analysis included significant judgments, including estimated future cash flows by reporting unit, specifically forecasted revenue, forecasted operating margins, discount rates and forecasted capital expenditures used to determine the fair value of the reporting units. As a result, we fully impaired our goodwill in the Russia and Middle East & North Africa (“MENA”) reporting units as of the second quarter ended June 30, 2020.

The changes in the carrying amount of goodwill by reporting segment for the nine months ended September 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 September 30, 2020	$	—	$	—	$	—

For the three and nine months ended September 30, 2019, the Predecessor goodwill impairment tests indicated that goodwill was impaired and as a result the Predecessor incurred a charge of $399 million and $730 million, respectively. The Predecessor 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)	9/30/2020		12/31/2019
Developed and Acquired Technology	$	478	$	721
Trade Names	363		393
Totals	$	841	$	1,114

We did not recognize any impairment of intangible assets in the Successor three months ended September 30, 2020. For the Successor nine months ended September 30, 2020, based on our impairment tests in the first and second quarters of 2020, we recognized impairments of $159 million of our developed and acquired technology.

Amortization expense was $38 million and $124 million for the Successor three and nine months ended September 30, 2020, respectively, and $17 million and $49 million for the Predecessor three and nine months ended September 30, 2019 and is reported in Selling, General and Administrative on our Condensed Consolidated Statements of Operations. As of September 30, 2020, accumulated amortization was $101 million for Developed and Acquired Technology and $32 million for Trade Names.