Note 7: Goodwill and Other Intangible Assets

Goodwill

The following table summarizes changes in the carrying amount of goodwill for the years ended December 31, 2016 and 2015:

	Regulated Businesses					Market-Based Businesses					Consolidated
	Cost		Accumulated Impairment			Cost		Accumulated Impairment			Cost		Accumulated Impairment			Total Net
Balance as of January 1, 2015	$	3,412	$	(2,332	)	$	236	$	(108	)	$	3,648	$	(2,440	)	$	1,208
Goodwill from acquisitions		3		—			91		—			94		—			94
Balance as of December 31, 2015	$	3,415	$	(2,332	)	$	327	$	(108	)	$	3,742	$	(2,440	)	$	1,302
Goodwill from acquisitions		43		—			—		—			43		—			43
Balance as of December 31, 2016	$	3,458	$	(2,332	)	$	327	$	(108	)	$	3,785	$	(2,440	)	$	1,345

In 2016, the Company acquired aggregate goodwill of $43 associated with six of its acquisitions in the Regulated Businesses segment.

In 2015, the Company recorded goodwill of $91 as part of the Keystone acquisition. The Keystone business is an operating segment comprised of one reporting unit to which all of the goodwill arising from the acquisition was assigned and which is included in the Market-Based Business information. The Company also acquired aggregate goodwill of $3 associated with four of its acquisitions in its Regulated Businesses segment.

Excluding goodwill acquired in 2015 related to the Keystone acquisition, the Company determined that no qualitative factors were present that would indicate the estimated fair values of its reporting units were less than the respective carrying values. As such, the Company determined that further quantitative testing was not necessary at November 30, 2016 or 2015.

A step one test was completed for the Keystone goodwill. We used an income approach valuation technique which estimates the discounted future cash flows of operations. The discounted cash flow analysis relies on a single scenario reflecting best estimate projected cash flows. Significant assumptions were used in estimating the fair value, including the discount rate, growth rate and terminal value. The estimated fair value of the Keystone reporting unit exceeded its carrying value, and as such the Company determined the goodwill is not impaired.

There can be no assurances that the Company will not be required to recognize an impairment of goodwill in the future due to market conditions or other factors related to the performance of the Company’s reporting units. These market events could include a decline over a period of time of the Company’s stock price, a decline over a period of time in valuation multiples of comparable water utilities and reporting unit companies, the lack of an increase in the Company’s market price consistent with its peer companies, decreases in control premiums or continued downward pressure on commodity prices. A decline in the forecasted results in our business plan, such as changes in rate case results or capital investment budgets or changes in our interest rates, could also result in an impairment charge. In regards to the Keystone goodwill, adverse developments in market conditions, including prolonged depression of natural gas prices or other factors that negatively impact our forecast operating results, cash flows or key assumptions in the future could result in an impairment charge of a portion or all of the goodwill balance.

Other Intangible Assets

Included in other long-term assets at December 31, 2016 and 2015, is a $10 and $12, respectively, customer relationship intangible resulting from the Keystone acquisition. This intangible is being amortized on a straight-line basis over a period of eight years.