Note 3 - Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2021

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

Goodwill — Our goodwill is tested for impairment annually as of October 31 for all of our reporting units, and more frequent if events or circumstances warrant such a review. No impairment charge was recorded in connection with our annual goodwill impairment test performed as of October 31, 2020 and we did not identify any events or circumstances during the first six months of 2021 that required an interim impairment test. We expect that the fair value of our reporting units will continue to exceed their carrying values in future periods.

As a result of the effect of the global COVID-19 pandemic on our expected future operating cash flows, a decrease in our share price which reduced our market capitalization below the book value of net assets and lower cushion in our expected reporting unit fair values as a result of the recent acquisitions, we determined certain impairment triggers had occurred in the first quarter of 2020. Accordingly, we performed interim impairment analyses at each of our reporting units as of March 31, 2020. Based on the results of our interim impairment tests, we concluded that carrying value exceeded fair value in our Commercial Vehicle and Light Vehicle reporting units and we recorded a goodwill impairment charge of $51 in the first quarter of 2020. See Note 3 to our consolidated financial statements in Item 8 of our 2020 Form 10-K for additional information on these impairment losses.

The change in the carrying amount of goodwill in 2021 is primarily due to the acquisition of Pi Innovo, measurement period adjustments for the 2020 Ashwoods acquisition and currency fluctuation. See Note 2 for additional information on recent acquisitions.

Changes in the carrying amount of goodwill by segment — 

	Light Vehicle		Commercial Vehicle		Off-Highway			Power Technologies		Total
Balance, December 31, 2020	$	—	$	177	$	302		$	—	$	479
Acquisitions				22		(11	)				11
Currency impact				6		(6	)				—
Balance, June 30, 2021	$	—	$	205	$	285		$	—	$	490

Components of other intangible assets — 

		June 30, 2021							December 31, 2020
	Weighted Average Useful Life (years)	Gross Carrying Amount		Accumulated Impairment and Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Impairment and Amortization			Net Carrying Amount
Amortizable intangible assets
Core technology	8	$	164	$	(107	)	$	57	$	146	$	(103	)	$	43
Trademarks and trade names	13		31		(10	)		21		31		(9	)		22
Customer relationships	8		527		(433	)		94		525		(431	)		94
Non-amortizable intangible assets
Trademarks and trade names			76					76		77					77
		$	798	$	(550	)	$	248	$	779	$	(543	)	$	236

The net carrying amounts of intangible assets, other than goodwill, attributable to each of our operating segments at  June 30, 2021 were as follows: Light Vehicle — $21, Commercial Vehicle — $80, Off-Highway — $141 and Power Technologies — $6.

Amortization expense related to amortizable intangible assets — 

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Charged to cost of sales	$	2	$	2	$	5	$	3
Charged to amortization of intangibles		3		3		7		6
Total amortization	$	5	$	5	$	12	$	9

The following table provides the estimated aggregate pre-tax amortization expense related to intangible assets for each of the next five years based on June 30, 2021 exchange rates. Actual amounts may differ from these estimates due to such factors as currency translation, customer turnover, impairments, additional intangible asset acquisitions and other events.

	Remainder of 2021		2022		2023		2024		2025
Amortization expense	$	11	$	22	$	22	$	22	$	22