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Goodwill and Intangible Assets
 12 Months Ended
Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets
6.
Goodwill and Intangible Assets

Goodwill

The changes in the Company's goodwill consisted of the following:

 

 

 

 

 

(dollars in millions)

 

IT Services and Hardware

 

 

Network

 

 

Total Company

 

Goodwill, balance as of December 31, 2021

 

$

157.4

 

 

$

488.9

 

 

$

646.3

 

Activity during the year:

 

 

 

 

 

 

 

 

 

Adjustments to prior year Merger

 

 

2.5

 

 

 

2.2

 

 

 

4.7

 

Acquisition of Agile

 

 

—

 

 

 

39.4

 

 

 

39.4

 

Adjustments to postretirement and other benefit obligations (Note 11)

 

 

19.6

 

 

 

15.4

 

 

 

35.0

 

Currency translations

 

 

(1.9

)

 

 

—

 

 

 

(1.9

)

Goodwill, balance as of December 31, 2022

 

 

177.6

 

 

 

545.9

 

 

 

723.5

 

Activity during the year:

 

 

 

 

 

 

 

 

 

Adjustments to prior year acquisition of Agile

 

 

—

 

 

 

(4.4

)

 

 

(4.4

)

Acquisition of OTT

 

 

—

 

 

 

1.1

 

 

 

1.1

 

Currency translations

 

 

0.8

 

 

 

—

 

 

 

0.8

 

Goodwill, balance as of December 31, 2023

 

$

178.4

 

 

$

542.6

 

 

$

721.0

 

 

 

 

 

 

 

 

 

 

 

 

During 2023, goodwill in the Network segment decreased by $4.4 million due to an adjustment made to the prior year acquisition of Agile and increased by $1.1 million due to the acquisition of OTT. See Note 4 for further information related to the Agile and OTT acquisitions.

No impairment losses were recognized in goodwill for the years ended December 31, 2023 and 2022, and the Successor and Predecessor periods in 2021. During the annual review performed in the fourth quarter of 2023, we completed a Step 1 or Quantitative assessment and determined that the fair value of our reporting units exceeded their carrying amounts for the IT Services and Hardware and Network reporting units, including goodwill and, therefore, goodwill was not impaired. A Step 0 or qualitative assessment was performed for the goodwill associated with the Agile Reporting unit.

 

 

 

Intangible Assets

The Company’s intangible assets consisted of the following:

 

 

 

 

 

 

 

 

 

 

December 31, 2023

 

 

December 31, 2022

 

 

 

Gross

 

 

 

 

 

 

 

 

Gross

 

 

 

 

 

 

 

 

 

Carrying

 

 

Accumulated

 

 

Net

 

 

Carrying

 

 

Accumulated

 

 

Net

 

(dollars in millions)

 

Amount

 

 

Amortization

 

 

Amount

 

 

Amount

 

 

Amortization

 

 

Amount

 

Intangible assets subject to amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Customer relationships

 

$

863.5

 

 

$

(239.3

)

 

$

624.2

 

 

$

862.1

 

 

$

(140.7

)

 

$

721.4

 

      Trade names

 

 

109.8

 

 

 

(36.2

)

 

 

73.6

 

 

 

109.5

 

 

 

(20.5

)

 

 

89.0

 

      Technology

 

 

6.1

 

 

 

(1.9

)

 

 

4.2

 

 

 

6.0

 

 

 

(1.0

)

 

 

5.0

 

  Total

 

 

979.4

 

 

 

(277.4

)

 

 

702.0

 

 

 

977.6

 

 

 

(162.2

)

 

 

815.4

 

Intangible assets not subject to amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      FCC licenses and spectrum usage rights

 

 

7.1

 

 

 

—

 

 

 

7.1

 

 

 

6.9

 

 

 

—

 

 

 

6.9

 

      Perpetual licenses

 

 

6.8

 

 

 

—

 

 

 

6.8

 

 

 

6.8

 

 

 

—

 

 

 

6.8

 

Total intangible assets

 

$

993.3

 

 

$

(277.4

)

 

$

715.9

 

 

$

991.3

 

 

$

(162.2

)

 

$

829.1

 

As a result of the acquisition of OTT, the Company recorded a nominal finite-lived intangible asset representing the preliminary fair value at the OTT Acquisition Date. Due to the acquisition of Agile, the Company recorded $19.4 million of finite-lived intangible assets representing the fair values at the Agile Acquisition Date. See Note 4 for additional information regarding the acquisitions of OTT and Agile. The change in gross carrying amounts for finite-lived intangible assets is also due to foreign currency translation on finite-lived intangible assets denominated in foreign currency. The finite-lived intangible assets are amortized over their useful lives based on a number of assumptions including the estimated period of economic benefit and utilization.

During the fourth quarter of 2022, the Company purchased perpetual licenses for a block of IP addresses to be used as the Company continues to extend our fiber network and add internet subscribers.

The amortization expense for finite-lived intangible assets was $114.7 million in 2023, $121.4 million in 2022, and $41.4 million and $9.9 million in the Successor and Predecessor periods in 2021, respectively. In addition to amortization expense, the changes in definite-lived intangible assets from December 31, 2022 to December 31, 2023 are due to foreign currency translation. No impairment losses were recognized on intangible assets for the years ended December 31, 2023 and 2022, and the Successor and Predecessor periods in 2021.

The estimated useful lives for each finite-lived intangible asset class are as follows:

 

Customer relationships

 

15 years

Trade names

 

3 to 10 years

Technology

 

7 years

 

The annual estimated amortization expense for future years is as follows:

 

(dollars in millions)

 

 

 

Year ended December 31,

 

 

 

2024

 

$

105.6

 

2025

 

 

93.8

 

2026

 

 

86.6

 

2027

 

 

79.4

 

2028

 

 

72.0

 

Thereafter

 

 

264.6

 

Total

 

$

702.0