Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

11 – Goodwill and Intangibles, Net

Goodwill Impairment

We based our goodwill impairment assessments previously on the fair value of our reporting units, which were at a regional geographic level. We fully impaired our Successor and Predecessor goodwill during 2020 and 2019. The cumulative impairment loss for goodwill was $239 million for the Successor and $3.4 billion for Predecessor periods.

Successor Goodwill Recognition and Impairment

As a result of Fresh Start Accounting, we recognized $239 million of goodwill. During 2020, based on our interim goodwill impairment assessments that determined the fair value of our reporting units were less than their carrying values, we recognized goodwill impairment charges and fully impaired our goodwill as presented in “Note 4 – Impairments and Other Charges.” We identified impairment indicators as discussed in “Note 7 – Long-Lived Assets Impairment” that triggered these interim quantitative goodwill assessments. The fair values of our reporting units were determined using a combination of the income approach and the market approach for comparable companies in our industry, a Level 3 fair value analysis. Determining the fair value of the reporting units required management to develop significant judgments, including estimating and discounting future cash flows by reporting unit, specifically forecasted revenue, forecasted operating margins and discount rates.

Predecessor Period Goodwill Impairments and Assessment Factors

The 2019 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 all our reporting units. Our lower than expected and forecasted financial results were due to the continued weakness within the energy market and consequently our inability to quickly and significantly reduce our cost structure under our restructuring plans savings and as a result we incurred a goodwill impairment charge of $730 million.

Intangible Assets

The components of intangible assets were as follows:

	December 31, 2021
	Gross				Net
	Carrying		Accumulated		Intangible
(Dollars in millions)	Amount		Amortization		Assets
Developed and Acquired Technology	$	590	$	(247)	$	343
Trade Names	395		(81)		314
Totals	$	985	$	(328)	$	657
	December 31, 2020
	Gross				Net
	Carrying		Accumulated		Intangible
(Dollars in millions)	Amount		Amortization		Assets
Developed and Acquired Technology	$	588	$	(132)	$	456
Trade Names	395		(41)		354
Totals	$	983	$	(173)	$	810

See “Note 7 – Long-Lived Assets Impairment” for additional information on impairments.

Amortization expense was $156 million, $163 million and $9 million in the 2021, 2020, and 2019 Successor Periods and $61 million in the 2019 Predecessor Period. Based on the carrying value of intangible assets at December 31, 2021, amortization expense for the subsequent five years is estimated as follows (dollars in millions): 

Period	Amount
2022	$	157
2023	157
2024	145
2025	41
2026	41