GOODWILL AND OTHER INTANGIBLES

Goodwill

The following table summarizes goodwill attributable to our reporting units for the periods presented:



Millions of dollars	North America			EMEA			Latin America			Asia			Total Whirlpool
Beginning balance December 31, 2017	$	1,755		$	920		$	5		$	438		$	3,118
Reassignment of goodwill ⁽¹⁾	(54		)	—			53			1			—
Impairment ⁽²⁾	—			(579		)	—			—			(579		)
Reclassification to asset held for sale	—			—			(23		)	—			(23		)
Currency translation adjustment	(8		)	(32		)	(2		)	(23		)	(65		)
Ending net balance December 31, 2018	$	1,693		$	309		$	33		$	416		$	2,451

⁽¹⁾ Effective January 1, 2018, we realigned the composition of certain segments to align with our new leadership reporting structure. We now report our Mexico business as a part of our Latin America segment. As a result, we reassigned approximately $53 million of goodwill, using a relative fair value approach, from the North America reporting unit to the Latin America reporting unit.

⁽²⁾The EMEA reporting unit has $579 million of accumulated impairment losses as of December 31, 2018. No other reporting units have accumulated impairment losses as of December 31, 2018.

Interim impairment assessment

In connection with the preparation of our Consolidated Condensed Financial Statements for three months ended June 30, 2018, we identified indicators of goodwill impairment for our EMEA reporting unit based on our qualitative assessment, which required us to complete an interim quantitative impairment assessment. The primary indicator of impairment for our EMEA reporting unit was the segment's continuing negative financial performance in 2018 that did not improve as anticipated, primarily driven by significant volume loss. The actual operating results for the three-months ended June 30, 2018 were significantly lower than forecasted resulting in weak business performance. While the Indesit integration activities are substantially complete, as of the impairment date, the operating and macro-environment in the EMEA region continued to be very challenging and had not improved as anticipated. While our commercial transformation and supply chain initiatives are progressing, as of the impairment determination date, progress on market share recovery was slower than previously anticipated and the business had been impacted by raw material inflation and currency headwinds.

In performing our quantitative assessment of goodwill during the second quarter of 2018, we estimated the reporting unit's fair value under an income approach using a discounted cash flow model. The income approach used the reporting unit's projections of estimated operating results and cash flows that were discounted using a market participant discount rate based on the weighted-average cost of capital. The main assumptions supporting the cash flow projections included revenue growth, EBIT margins and the discount rate. The financial projections reflect management's best estimate of economic and market conditions over the projected period including forecasted revenue growth, EBIT margins, tax rate, capital expenditures, depreciation and amortization, changes in working capital requirements and the terminal growth rate.

Based on our interim quantitative impairment assessment as of June 30, 2018, the carrying value of the EMEA reporting unit exceeded its fair value by $579 million and we recorded a goodwill impairment charge in this amount in 2018.

Future impairments could result if the reporting unit experiences further deterioration in business performance or if there is a significant change in other qualitative or quantitative factors, including an increase in discount rates or a decrease in forecasted EBIT margin.

Annual impairment assessment

We completed our annual impairment test for goodwill as of October 1, 2018. The Company elected to bypass the qualitative assessment and perform a quantitative assessment to evaluate goodwill for all our reporting units. Based on the quantitative assessment we determined there was no impairment of goodwill.

Other Intangible Assets

The following table summarizes other intangible assets for the period presented:



	December 31, 2018							December 31, 2017
Millions of dollars	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
Other intangible assets, finite lives:
Customer relationships ⁽¹⁾	$	622	$	(330	)	$	292	$	639	$	(297	)	$	342
Patents and other ⁽²⁾	328		(197		)	131		387		(179		)	208
Total other intangible assets, finite lives	$	950	$	(527	)	$	423	$	1,026	$	(476	)	$	550
Trademarks, indefinite lives ⁽³⁾	1,873		—			1,873		2,041		—			2,041
Total other intangible assets	$	2,823	$	(527	)	$	2,296	$	3,067	$	(476	)	$	2,591

⁽¹⁾ Customer relationships have an estimated useful life of 5 to 19 years.

⁽²⁾ Patents and other intangibles have an estimated useful life of 3 to 43 years^.Includes impairment charges of $60 million at June 30, 2018 and the transfer of certain intangible land use rights to the China government resulting in a $27 million gain, as well as the impact of foreign currency.

⁽³⁾ Includes impairment charges of $108 million at June 30, 2018.

Interim impairment assessment

In connection with the preparation of our Consolidated Condensed Financial Statements for three months ended June 30, 2018, we identified indicators of impairment associated with other intangible assets in our EMEA reporting unit based on our qualitative assessment, which required us to complete an interim quantitative impairment assessment. The primary indicator of impairment was the continuing decline in revenue from weaker volumes through the six months ended June 30, 2018 that did not improve as anticipated. The actual operating results for the three months ended June 30, 2018 were significantly lower than forecasted.

In performing our quantitative assessment of other intangible assets, primarily brands, we estimate the fair value using the relief-from-royalty method which requires assumptions related to projected revenues from our long-range plans; assumed royalty rates that could be payable if we did not own the brand; and a market participant discount rate based on a weighted-average cost of capital.

Based on our interim quantitative impairment assessment as of June 30, 2018, the carrying value of certain other intangible assets, including Indesit and Hotpoint*, exceeded their fair value, and we recorded an impairment charge of $168 million in 2018.

Annual impairment assessment

We completed our annual impairment assessment for other intangible assets as of October 1, 2018. The Company elected to bypass the qualitative assessment and perform a quantitative assessment to evaluate certain brand trademarks. Based on the results of the quantitative assessment, we determined there was an immaterial impairment

*Whirlpool ownership of the Hotpoint brand in the EMEA and Asia Pacific regions is not affiliated with the Hotpoint brand sold in the Americas.

as a result of the restructuring initiative announced in the fourth quarter to exit from the domestic sales operations in Turkey (not including manufacturing operations). See Note 13 to the Consolidated Financial Statements for additional information. There was no impairment of any other indefinite-life intangible assets.

The Company elected to perform a qualitative assessment on the other indefinite-life intangible assets noting no events that indicated that the fair value was less than carrying value that would require a quantitative impairment assessment.

See Note 10 to the Consolidated Financial Statements for additional information on the fair value measurement and disclosures related to the goodwill and other intangibles impairment.

The estimates of future cash flows used in determining the fair value of goodwill and intangible assets involve significant management judgment and are based upon assumptions about expected future operating performance, economic conditions, market conditions and cost of capital. Inherent in estimating the future cash flows are uncertainties beyond our control, such as changes in capital markets. The actual cash flows could differ materially from management's estimates due to changes in business conditions, operating performance and economic conditions.

Amortization expense was $75 million, $79 million and $71 million for the years ended December 31, 2018, 2017 and 2016, respectively.

The following table summarizes our future estimated amortization expense by year:



Millions of dollars
2019	$	67
2020	58
2021	56
2022	49
2023	43