Goodwill and Intangibles

9 Months Ended

Sep. 30, 2021

Goodwill And Intangible Assets Disclosure [Abstract]

NOTE 6. GOODWILL AND INTANGIBLES

Goodwill

The changes in the carrying amount of goodwill by reportable segment for the nine months ended September 30, 2021 are as follows:


	Safety Services			Specialty Services		Industrial Services		Total Goodwill
Goodwill as of December 31, 2020	$	906		$	172	$	4	$	1,082
Acquisitions		30			5		—		35
Measurement period adjustments and other (1)		(18	)		—		—		(18	)
Goodwill as of September 30, 2021	$	918		$	177	$	4	$	1,099

(1)

Measurement period adjustments related to the purchase accounting for SKG and finalization of certain immaterial acquisitions in 2020 (see Note 4 – “Business Combinations”). Other includes fluctuations due to foreign currency translation.

As of September 30, 2020, the Company had recorded accumulated goodwill impairment charges of $193, including $83 in the Safety Services segment, $52 in the Specialty Services segment, and $58 in the Industrial Services segment.

During 2020, while the Company’s services were largely deemed essential under various governmental orders, the Company did experience negative impacts from COVID-19 on its operations including impacts from the Company’s suppliers, other vendors, and customer base. In addition to the impacts of COVID-19, the Company was also impacted by a significant decline in demand and volatility in oil prices as some of the Company’s services involve work within the energy industry. As a result of these factors and the significant decline in the Company’s market capitalization during the first quarter 2020, the Company concluded an impairment triggering event had occurred for all of its reporting units and performed impairment tests for its goodwill and recoverability tests for its long-lived assets, which primarily include finite-lived intangible assets, property and equipment and right of use lease assets. During the first quarter of 2020, based on preliminary carrying values from the October 1, 2019 acquisition of APi Group, Inc. (“APi Acquisition”), the Company determined goodwill was impaired as the preliminary carrying values of some reporting units exceeded fair values. During the nine months ended September 30, 2020, the Company recorded an impairment charge to goodwill of $193.

Intangibles

The Company’s identifiable intangible assets are comprised of the following as of September 30, 2021 and December 31, 2020:


	September 30, 2021
	Weighted Average Remaining Useful Lives (in Years)		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Amortized intangibles:
Contractual backlog		1.0	$	101	$	(96	)	$	5
Customer relationships		6.6		845		(195	)		650
Trade names		13.0		278		(36	)		242
Total			$	1,224	$	(327	)	$	897


	December 31, 2020
	Weighted Average Remaining Useful Lives (in Years)		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Amortized intangibles:
Contractual backlog		1.6	$	101	$	(92	)	$	9
Customer relationships		7.0		823		(119	)		704
Trade names		13.8		274		(22	)		252
Total			$	1,198	$	(233	)	$	965

Amortization expense recognized on identifiable intangible assets are as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Cost of revenues	$	2	$	6	$	5	$	51
Selling, general, and administrative expense		30		25		90		83
Total intangible asset amortization expense	$	32	$	31	$	95	$	134

During the year ended December 31, 2020, the Company finalized the fair value of goodwill and intangible assets related to the APi Acquisition. The measurement period adjustments recorded during the year ended December 31, 2020 resulted in a cumulative reversal to amortization expense that had been recorded earlier in the year. If the final intangible assets fair values had been known at the date of the APi Acquisition, amortization expense would have increased by $15 to $46 and by $5 to $139 for the three and nine months ended September 30, 2020, respectively.