Long-Lived Asset Impairments (Notes)

12 Months Ended

Dec. 31, 2020

Property, Plant and Equipment [Abstract]

Long-lived and Other Asset Impairments

10. Long-Lived Asset Impairments

The unprecedented global economic and industry conditions attributable to the COVID-19 pandemic resulting in the significant volatility in the energy industry impacting the demand for our products and services were identified as long-lived asset impairment indicators. As a result, we performed impairment assessments quarterly in 2020 through analysis of the undiscounted cash flow of our asset groups, which include property, plant and equipment, definite-lived intangible assets, goodwill and right of use assets. As of March 31, 2020, and as of June 30, 2020, we identified that impairment occurred in certain asset groups and with the assistance of third-party valuation advisors we determined the fair value of those asset groups. Based on our impairment tests, we determined the carrying amount of certain long-lived asset groups exceeded their respective fair values and we recognized $814 million of long-lived asset impairments in “Impairments and Other Charges” on the accompanying Consolidated Statements of Operations.

The fair values of certain of our long-lived asset groups were determined using discounted cash flow or Level 3 fair value analyses. The income approach required significant assumptions to determine the fair value of an asset or asset group including the estimated discounted future cash flows, specifically the forecasted revenue, forecasted operating margins and the discount rate. The table below details the Successor long-lived asset impairments by asset and segment recognized for the year ended December 31, 2020.

(Dollars in millions)	Western Hemisphere		Eastern Hemisphere		Total
Property, Plant and Equipment	$	316	$	255	$	571
Intangible Assets	43		112		155
Right of Use Assets	56		32		88
Total Impairment Charges	$	415	$	399	$	814

We recognized long-lived asset impairments of $20 million for the 2019 Predecessor Period to write-down our land drilling rigs in our Western Hemisphere segment totaling $13 million and Eastern Hemisphere totaling $7 million.

During 2018, we recognized long-lived asset impairments of $151 million ($46 million in our Western Hemisphere and $105 million in our Eastern Hemisphere segments) to write-down our land drilling rigs assets. See “Note 8 – Business Combinations and Divestitures” and “Note 15 – Fair Value of Financial Instruments, Assets and Other Assets” for more details.