Goodwill and Other Intangible Assets—Net

12 Months Ended

Dec. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets—Net

Goodwill and Other Intangible Assets

At December 31, 2018 and 2017, goodwill consists of the following:



	December 31, 2018
	Clean Air Segment			Ride Performance Segment			Aftermarket Segment			Powertrain		Motorparts		Total
	(Millions)
Gross carrying amount, January 1	$	23		$	156		$	229		$	—	$	—	$	408
Acquisition of Federal-Mogul ⁽¹⁾	—			—			—			388		437		825
Currency translation	(1		)	(1		)	—			—		—		(2		)
Gross carrying amount, December 31	22			155			229			388		437		1,231

Accumulated impairment loss, January 1	$	—		$	(140	)	$	(219	)	$	—	$	—	$	(359	)
Impairment	—			(3		)	—			—		—		(3		)
Currency translation	—			—			—			—		—		—
Accumulated impairment loss, December 31	—			(143		)	(219		)	—		—		(362		)

Net carrying value, December 31	$	22		$	12		$	10		$	388	$	437	$	869

	December 31, 2017
	Clean Air Segment			Ride Performance Segment			Aftermarket Segment			Powertrain		Motorparts		Total
	(Millions)
Gross carrying amount, January 1	$	21		$	155		$	229		$	—	$	—	$	405
Currency translation	2			1			—			—		—		3
Gross carrying amount, December 31	23			156			229			—		—		408

Accumulated impairment loss, January 1	$	—		$	(133	)	$	(215	)	$	—	$	—	$	(348	)
Impairment	—			(7		)	(4		)	—		—		(11		)
Currency translation	—			—			—			—		—		—
Accumulated impairment loss, December 31	—			(140		)	(219		)	—		—		(359		)

Net carrying value, December 31	$	23		$	16		$	10		$	—	$	—	$	49

⁽¹⁾The acquisition on October 1, 2018 of Federal-Mogul resulted in goodwill of $825 million. See Note 3, Acquisitions and Divestitures for additional information.

As a result of the goodwill impairment evaluation in the fourth quarter of 2018, the estimated fair value of the Ride Performance North America reporting unit was lower than its carrying value. Accordingly, a full goodwill impairment charge of $3 million for Ride Performance was recorded for the year ended December 31, 2018.

As a result of the goodwill impairment evaluation in the fourth quarter of 2017, the estimated fair value of the Europe and South America Ride Performance and Aftermarket reporting units were lower than their carrying value. Accordingly, a full goodwill impairment charge of $7 million for Ride Performance and $4 million for Aftermarket was recorded for the year ended December 31, 2017.

At December 31, 2018 and 2017, the Company's intangible assets consist of the following:



		December 31, 2018							December 31, 2017
	Useful Lives	Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Gross Carrying Value		Accumulated Amortization			Net Carrying Value
		(Millions)
Definite-lived intangible assets:
Customer relationships and platforms	10 years	$	964	$	(24	)	$	940	$	—	$	—		$	—
Customer contract	10 years	8		(5		)	3		8		(5		)	3
Patents	10 to 17 years	1		(1		)	—		1		(1		)	—
Technology rights	10 to 30 years	98		(27		)	71		29		(23		)	6
Packaged kits know-how	10 years	36		(1		)	35		—		—			—
Licensing agreements	3 to 5 years	66		(3		)	63		—		—			—
Land use rights	28 to 46 years	44		(2		)	42		15		(2		)	13
		1,217		(63		)	1,154		53		(31		)	22
Indefinite-lived intangible assets:
Trade names and trademarks		365		—			365		—		—			—
Total		$	1,582	$	(63	)	$	1,519	$	53	$	(31	)	$	22

Included in the table above are definite-lived and indefinite-lived intangible assets of $1,165 million and $365 million, respectively, identified in connection with the October 1, 2018 acquisition of Federal-Mogul. See Note 3, Acquisitions and Divestitures for additional information.

Amortization of intangibles amounted to $32 million in 2018 and $3 million in both 2017 and 2016, and are included in the consolidated statements of income caption “Depreciation and amortization.”

The expected future amortization expense for the Company's definite-lived intangible assets is as follows:



	2019		2020		2021		2022		2023		2024 and thereafter		Total
	(Millions)
Expected Amortization Expense	$	124	$	125	$	124	$	119	$	116	$	546	$	1,154

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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