Goodwill and Intangibles

9 Months Ended

Sep. 30, 2020

Goodwill And Intangible Assets Disclosure [Abstract]

Note 7. Goodwill and Intangibles

Goodwill: The changes in the carrying amount of goodwill by reportable segment for the nine months ended September 30, 2020 are as follows (amounts at December 31, 2019 represent the preliminary estimate of goodwill attributable to the APi Acquisition, which was finalized as of September 30, 2020):

	Safety Services			Specialty Services			Industrial Services			Total Goodwill
Goodwill as of December 31, 2019	$	639		$	290		$	51		$	980
Acquisitions		1			2			—			3
Impairments (1)		(83	)		(52	)		(58	)		(193	)
Measurement period adjustments and other (2)		118			(68	)		11			61
Goodwill as of September 30, 2020	$	675		$	172		$	4		$	851

(1)

During the nine months ended September 30, 2020, the Company concluded that a triggering event had occurred for all of its reporting units (see Note 2 – “Basis of Presentation and Significant Accounting Policies”). Pursuant to the authoritative literature, the Company performed an impairment test and recorded an impairment charge of $193 to reflect the impairment of its goodwill. The impairment charge of $83 recorded within the Safety Services segment was recorded within the Life Safety and Mechanical reporting unit for $57 and $26, respectively. The impairment charge of $52 recorded within the Specialty Services segment was recorded within the Infrastructure/Utility reporting unit, Fabrication reporting unit and Specialty Contracting reporting unit for $30, $1 and $21, respectively. The impairment charge of $58 recorded within the Industrial Services segment was recorded within the Transmission reporting unit and Civil reporting unit for $57 and $1, respectively.

(2)

Measurement period adjustments related to the APi Acquisition in 2019, for which the purchase price allocation was finalized during the third quarter of 2020 (see Note 4 – “Business Combinations”). Other includes fluctuations due to foreign currency translation adjustments.

Intangibles: The Company has the following identifiable intangible assets as of September 30, 2020 and December 31, 2019 (amounts at December 31, 2019 primarily represent the preliminary estimate of intangibles attributable to the APi Acquisition, which was finalized as of September 30, 2020):

	September 30, 2020
	Estimated Useful Lives (in Years)		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Amortized intangibles:
Backlog intangibles		1	$	99	$	(73	)	$	26
Customer relationships		8		747	$	(93	)		654
Trade names		15		258		(17	)		241
Total			$	1,104	$	(183	)	$	921

	December 31, 2019
	Estimated Useful Lives (in Years)		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Amortized intangibles:
Backlog intangibles		1	$	112	$	(22	)	$	90
Customer relationships		8		755		(24	)		731
Trade names		15		305		(5	)		300
Total			$	1,172	$	(51	)	$	1,121

Amortization expense recognized on intangibles was as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020 (Successor)		2019 (Predecessor)		2020 (Successor)		2019 (Predecessor)
Cost of revenues	$	6	$	—	$	51	$	—
Selling, general, and administrative expense		25		8		83		26
Total intangible asset amortization expense	$	31	$	8	$	134	$	26

During the nine months ended September 30, 2020, the Company recorded measurement period adjustments to goodwill and intangible assets for finalizing their fair values from the APi Acquisition. This resulted in a cumulative reversal to amortization expense of $15 related to intangible assets. If the final intangible assets fair values had been known at the date of the APi Acquisition, amortization expense would have been lower by $5, $5 and $5 for the year ended December 31, 2019 (Successor), and the three months ended March 31, 2020 and June 30, 2020, respectively.