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Intangible Assets Including Goodwill
9 Months Ended
Sep. 30, 2021
Intangible Assets Including Goodwill  
Intangible Assets Including Goodwill

6.

Intangible Assets Including Goodwill:

Intangible Assets

The following tables present the Company’s intangible asset balances by major asset class.

At September 30, 2021

    

Gross Carrying

    

Accumulated

    

Net Carrying

(Dollars in millions)

    

Amount

    

Amortization

    

Amount

Capitalized software

$

17

$

(10)

$

7

Client relationships

 

130

 

(91)

 

39

Completed technology

 

20

 

(19)

 

Patents and trademarks

 

2

 

(2)

 

Total

$

169

$

(122)

$

47

At December 31, 2020

    

Gross Carrying

    

Accumulated

    

Net Carrying

(Dollars in millions)

    

Amount

    

Amortization

    

Amount

Capitalized software

$

7

$

(4)

$

3

Client relationships

 

130

 

(77)

 

53

Completed technology

 

20

 

(17)

 

3

Patents and trademarks

 

2

 

(2)

 

Total

$

159

$

(99)

$

60

The net carrying amount of intangible assets decreased $13 million during the first nine months of 2021, primarily due to intangible asset amortization, partially offset by additions of capitalized software. The aggregate intangible asset amortization expense was $9 million and $26 million for the third quarter and first nine months of 2021, respectively. In the first nine months of 2021, the Company retired $3 million of fully amortized intangible assets, impacting both the gross carrying amount and accumulated amortization by this amount.

The future amortization expense relating to intangible assets currently recorded in the Combined Balance Sheet was estimated to be the following at September 30, 2021:

Capitalized

Acquired

(Dollars in millions)

    

Software

    

Intangibles

    

Total

Remainder of 2021

$

4

$

5

$

9

2022

 

3

 

18

 

21

2023

 

 

10

 

11

2024

 

 

6

 

6

2025

 

 

 

Thereafter

 

Goodwill

Goodwill attributed to the Company represents the historical goodwill balances in the Parent’s managed infrastructure services business arising from acquisitions specific to the Company. The changes in the goodwill balances by segment for the nine months ended September 30, 2021 and for the year ended December 31, 2020 were as follows:

Foreign

Foreign

Currency

Currency

Translation

Translation

(Dollars in millions)

Balance at

and Other

Balance at

and Other

Balance at

Segment

    

January 1, 2020

    

Adjustments*

December 31, 2020

    

Adjustments*

    

September 30, 2021

Americas

$

416

$

24

$

440

$

(8)

$

431

EMEA

 

272

 

16

 

288

 

4

 

292

Japan

 

401

 

23

 

424

 

(9)

 

415

Asia Pacific

 

74

 

4

 

78

 

(16)

 

62

Total

$

1,162

$

67

$

1,230

$

(29)

$

1,201

*

Primarily driven by foreign currency translation.

There were no goodwill impairment losses recorded during the first nine months of 2021 or full-year 2020 and the Company has no accumulated impairment losses. We review goodwill for impairment annually and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable by first assessing qualitative factors to determine if it is more likely than not that fair value is less than carrying value. As discussed in note 4, “Segments”, we will evaluate whether to recast our geographic segments to reflect management’s updated view of the business. Segment changes are considered triggering events for quantitative assessment for impairment, so if the Company determines that a change in its segment definitions is warranted, it will perform quantitative tests for all affected reporting units. The Company intends to complete its annual goodwill impairment analysis for all reporting units during the fourth quarter of 2021.