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Goodwill and Other Intangible Assets
 3 Months Ended
Mar. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Other Intangible Assets
6. Goodwill and Other Intangible Assets

As a result of the effects of the COVID-19 global pandemic on the Company's projected financial information, the Company concluded it was more likely than not the fair values value of certain reporting units and its indefinite-lived intangible assets had declined to below their carrying values during the three months ended March 31, 2020.

The Company completed a goodwill impairment analysis for four reporting units with goodwill in the Powertrain, Motorparts, and Ride Performance segments. The difference between the reporting units' carrying values and fair values were recognized as impairment charges. The Company recognized $267 million in non-cash impairment charges related to its goodwill during the three months ended March 31, 2020, which represented full impairments of the goodwill in one reporting unit in the Powertrain segment and one reporting unit in the Ride Performance segment, and partial impairments of goodwill in one reporting unit in the Powertrain segment and one reporting unit in the Motorparts segment.

The Company also completed an analysis to determine the fair value of its trade names and trademarks for its reporting units in the Ride Performance and Motorparts segments. It was determined their carrying values exceeded their fair values and the Company recognized $51 million in non-cash impairment charges related these indefinite-lived assets, which represented a full impairment of the trade names and trademarks in one of the reporting units in the Motorparts segment, and a partial impairment of the trade names and trademarks in one of the reporting units in the Ride Performance segment and one of the reporting units in the Motorparts segment. As a result, the remaining carrying value of the Company's trade names and trademarks equals fair value at March 31, 2020.

As discussed in more details in Note 4, Restructuring Charges, Net and Asset Impairments, the Company concluded impairment triggers had occurred for certain long-lived asset groups within the Ride Performance segment. As a result, the Company recorded non-cash impairment charges of $65 million related to its definite-lived intangible assets, which represented full impairments of the definite-lived intangible assets in these two reporting units.

As a result, impairment charges for goodwill and intangible assets recognized by segment during the three months ended March 31, 2020 consist of the following:
 
 
Three months ended March 31, 2020
 
 
Powertrain
 
Ride Performance
 
Motorparts
 
Total
Goodwill impairment charges
 
$
160

 
$
37

 
$
70

 
$
267

Trade names and trademarks intangible asset impairment charges
 
—

 
11

 
40

 
51

Definite-lived intangible assets impairment charges
 
—

 
65

 
—

 
65

 
 
$
160

 
$
113

 
$
110

 
$
383



There are many uncertainties regarding the COVID-19 global pandemic that could negatively affect the Company's results of operations, financial position, and cash flows. As a result, if there is an adverse change to the Company’s projected financial information, due to business performance or market conditions, this may be indicative the fair value of its reporting units have declined below their carrying values, which may result in additional non-cash goodwill or intangible asset impairment charges in a future period.

The following table shows a summary of the number of reporting units with goodwill in each segment and whether or not the reporting unit's fair value exceeds its carrying value by more or less than 10% at March 31, 2020:
 
Segments
 
Clean Air
 
Powertrain
 
Ride Performance
 
Motorparts
Number of reporting units with goodwill
3

 
1

 
1

 
1

 
 
 
 
 
 
 
 
Number of reporting units where fair value exceeds carrying value:
 
 
 
 
 
 
 
Greater than 10%
3

 
—

 
1

 
—

Less than 10%
—

 
1

 
—

 
1

 
 
 
 
 
 
 
 
Goodwill for reporting units where fair value exceeds carrying value:
 
 
 
 
 
 
 
Greater than 10%
$
22

 
$
—

 
$
7

 
$
—

Less than 10%
—

 
165

 
—

 
311

 
$
22

 
$
165

 
$
7

 
$
311


At March 31, 2020 and December 31, 2019, goodwill consists of the following:
 
Clean Air
 
Powertrain
 
Ride Performance
 
Motorparts
 
Total
Gross carrying amount at December 31, 2019
$
22

 
$
343

 
$
259

 
$
620

 
$
1,244

Foreign exchange
—

 
—

 
(3
)
 
—

 
(3
)
Gross carrying amount at March 31, 2020
22

 
343

 
256

 
620

 
1,241

 
 
 
 
 
 
 
 
 
 
Accumulated impairment loss at December 31, 2019
—

 
(18
)
 
(212
)
 
(239
)
 
(469
)
Impairment
—

 
(160
)
 
(37
)
 
(70
)
 
(267
)
Accumulated impairment loss at March 31, 2020
—

 
(178
)
 
(249
)
 
(309
)
 
(736
)
 
 
 
 
 
 
 
 
 
 
Net carrying value at end of period
$
22

 
$
165

 
$
7

 
$
311

 
$
505



During the first quarter of 2019, the Company reorganized the reporting structure of its Aftermarket, Ride Performance, and Motorparts segments and the underlying reporting units within those segments. The Company reassigned assets and liabilities (excluding goodwill) to the reporting units affected. Goodwill was then reassigned to the reporting units using a relative fair value approach based on the fair value of the elements transferred and the fair value of the elements remaining within the original reporting units. The Company tested goodwill for impairment on a pre-reorganization basis and determined there was no impairment for the affected reporting units. The Company also performed an impairment analysis on a post-reorganization basis and determined $60 million of goodwill was impaired for two reporting units within its Ride Performance segment, one of which was a full impairment of the goodwill. As a result, this non-cash charge was recorded in the three months ended March 31, 2019. Goodwill allocated to other reporting units was supported by the valuation performed at that time.

At March 31, 2020 and December 31, 2019, the Company's intangible assets consist of the following:
 
 
 
March 31, 2020
 
December 31, 2019
 
Useful Lives
 
Gross Carrying Value
 
Accumulated Amortization
 
Net Carrying Value
 
Gross Carrying Value
 
Accumulated Amortization
 
Net Carrying Value
Definite-lived intangible assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
Customer relationships and platforms
10 years
 
$
984

 
$
(209
)
 
$
775

 
$
988

 
$
(123
)
 
$
865

Customer contract
10 years
 
8

 
(6
)
 
2

 
8

 
(6
)
 
2

Patents
10 to 17 years
 
1

 
(1
)
 
—

 
1

 
(1
)
 
—

Technology rights
10 to 30 years
 
131

 
(41
)
 
90

 
133

 
(37
)
 
96

Packaged kits know-how
10 years
 
54

 
(8
)
 
46

 
54

 
(7
)
 
47

Catalogs
10 years
 
47

 
(7
)
 
40

 
47

 
(6
)
 
41

Licensing agreements
3 to 5 years
 
62

 
(23
)
 
39

 
63

 
(18
)
 
45

Land use rights
28 to 46 years
 
46

 
(3
)
 
43

 
47

 
(3
)
 
44

 
 
 
1,333

 
(298
)
 
1,035

 
1,341

 
(201
)
 
1,140

Indefinite-lived intangible assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
Trade names and trademarks
 
 
 
 
 
 
229

 
 
 
 
 
282

Total
 
 
 
 
 
 
$
1,264

 
 
 
 
 
$
1,422



The amortization expense associated with definite-lived intangible assets is as follows:
 
 
Three Months Ended March 31,
 
 
2020
 
2019
Amortization expense
 
$
34

 
$
35


The expected future amortization expense for the Company's definite-lived intangible assets is as follows:
 
 
2020
 
2021
 
2022
 
2023
 
2024
 
2025 and thereafter
 
Total
Expected amortization expense
 
$
98

 
$
126

 
$
122

 
$
120

 
$
113

 
$
456

 
$
1,035