Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2021

Goodwill And Intangible Assets Disclosure [Abstract]

5. Goodwill and Intangible Assets

Goodwill

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

	Successor
(dollars in millions)	IT Services and Hardware		Entertainment and Communications		Total Company
Goodwill, balance as of September 8, 2021 (remeasured upon Merger)	$	—	$	—	$	—
Activity during the year:
Merger		157.4		488.9		646.3
Goodwill, balance as of September 30, 2021	$	157.4	$	488.9	$	646.3

	Predecessor
(dollars in millions)	IT Services and Hardware		Entertainment and Communications		Total Company
Goodwill, balance as of December 31, 2020	$	149.1	$	12.4	$	161.5
Activity during the year:
Currency translations		0.7		—		0.7
Goodwill, balance as of September 7, 2021	$	149.8	$	12.4	$	162.2

As mentioned in Note 2, in connection with the Merger, the Company’s assets and liabilities were measured at fair value as of the date of the Merger. The allocation of goodwill to our Entertainment and Communications reporting unit and IT Services and Hardware reporting unit is preliminary as of the date of this filing.

No impairment losses were recognized in goodwill for the Successor period, the Predecessor periods included within the three and nine months ended September 30, 2021 and the three and nine months ended September 30, 2020.

Intangible Assets

The Company’s intangible assets consisted of the following:

	Successor							Predecessor
	September 30, 2021							December 31, 2020
	Gross Carrying		Accumulated			Net		Gross Carrying		Accumulated			Net
(dollars in millions)	Amount		Amortization			Amount		Amount		Amortization			Amount
Intangible assets subject to amortization
Customer relationships	$	850.0	$	(7.1	)	$	842.9	$	141.6	$	(38.9	)	$	102.7
Trade names		108.0		(1.2	)		106.8		41.7		(9.4	)		32.3
Technology		5.0		(0.1	)		4.9		9.9		(3.2	)		6.7
Total		963.0		(8.4	)		954.6		193.2		(51.5	)		141.7
Intangible assets not subject to amortization
FCC licenses and spectrum usage rights		6.6		—			6.6		6.4		—			6.4
Total intangible assets	$	969.6	$	(8.4	)	$	961.2	$	199.6	$	(51.5	)	$	148.1

In connection with the Merger, the company recorded $969.6 million of intangible assets, as shown in the table above, representing the fair values at the Merger Date. See Note 2 for additional information regarding the Merger. They are amortized over their useful lives based on a number of assumptions including the estimated period of economic benefit and utilization.

In the Successor period, amortization expense for finite-lived intangible assets was $8.4 million. In the Predecessor periods included within the three and nine months ended September 30, 2021, amortization expense for finite-lived intangible assets was $2.7 million and $9.9 million, respectively. In the three and nine months ended September 30, 2020, amortization expense for finite-lived intangible assets was $3.6 million and $10.8 million, respectively. No impairment losses were recognized for the Successor period, the Predecessor periods included within the three and nine months ended September 30, 2021 and the three and nine months ended September 30, 2020.

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

	Successor	Predecessor
	September 30, 2021	December 31, 2020
Customer relationships	15 years	8 to 15 years
Trade names	3 to 10 years	10 to 15 years
Technology	7 years	10 years

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

(dollars in millions)
Three months ended December 31, 2021	$	33.0
2022		120.0
2023		112.9
2024		103.8
2025		92.1
Thereafter		492.8
Total	$	954.6