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Goodwill
12 Months Ended
Dec. 31, 2020
Goodwill And Intangible Assets Disclosure [Abstract]  
Goodwill

11. Goodwill

The changes in the carrying amounts of goodwill for the years ended December 31, 2020 and 2019 were as follows:

 

(millions)

 

Commercial

 

 

Aviation

 

 

Total

 

Net book values as of January 1, 2019

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

$

376.8

 

 

$

208.7

 

 

$

585.5

 

Accumulated impairment losses

 

 

 

 

 

 

 

 

 

Total

 

$

376.8

 

 

$

208.7

 

 

$

585.5

 

Purchase price adjustments

 

 

 

 

 

0.3

 

 

 

0.3

 

Foreign currency translation

 

 

0.2

 

 

 

 

 

 

0.2

 

Net book value as of December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

$

377.0

 

 

$

209.0

 

 

$

586.0

 

Accumulated impairment losses

 

 

 

 

 

 

 

 

 

Total

 

$

377.0

 

 

$

209.0

 

 

$

586.0

 

Impairment

 

 

 

 

 

(59.5

)

 

 

(59.5

)

Foreign Currency translation

 

 

0.1

 

 

 

 

 

 

0.1

 

Net book value as of December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

$

377.1

 

 

$

209.0

 

 

$

586.1

 

Accumulated impairment losses

 

 

 

 

 

(59.5

)

 

 

(59.5

)

Total

 

$

377.1

 

 

$

149.5

 

 

$

526.6

 

 

In July 2020, the Company changed its internal reporting structure. All prior periods presented have been reclassified to reflect the new internal reporting structure. See Note 20. Segment Information for further discussion.

As discussed in Note 1. Significant Accounting Policies and Practices, due to the impacts of COVID-19, revenues for certain markets in which the Company operates have dropped significantly as compared to the expectations as of the October 1, 2019 annual impairment test. The Company does not know how long COVID-19 and its effects will continue to impact results of the Company. In addition, certain Aviation contracts were terminated in August 2020. The termination of these contracts and the ongoing impacts of COVID-19 on the Company’s expected future operating cash flows triggered the Company to complete a quantitative goodwill impairment analysis as of August 31, 2020 for the Aviation reporting unit. Accordingly, the Company determined the carrying value for the Aviation reporting unit was higher than its implied fair value. The implied fair value was determined based on cash flow projections that assume certain future revenue and cost levels, comparable marketplace data, assumed discount rates based upon current market conditions and other valuation factors. As a result, the Company recorded $59.5 million of impairment charges during the year ended December 31, 2020, which was recognized in Impairment of goodwill and intangible assets in the Consolidated Statements of (Loss) Income. The fair value of goodwill was classified as Level 3 in the fair value hierarchy. See Note 12 Fair Value Measurement for further discussion.

As of December 31, 2020 the Company performed a qualitative, rather than a quantitative, assessment to determine whether it is more likely than not that the fair value of a reporting unit was less than its carrying amount.  Generally, the more-likely-than-not-threshold is a greater than 50% likelihood that the fair value of a reporting unit is greater than the carrying value. In performing the qualitative analysis, the Company considered various factors, including the Company’s stock price as of December 31, 2020 and the reporting units’ actual results compared to projections used in the August 31, 2020 goodwill impairment analysis. Based on this qualitative analysis, the Company concluded there was no further impairment testing required. If the impacts from COVID-19 exceed the Company’s current expectations, additional impairment charges could be recorded in future periods.