GOODWILL AND OTHER INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2020

NOTE 8. GOODWILL AND OTHER INTANGIBLE ASSETS


CHANGES IN GOODWILL BALANCES
			2019								2020
	Balance at December 31, 2018		Dispositions		Impairments		Currency exchange and other		Balance at December 31, 2019		Acquisitions		Impairments		Currency exchange and other		Balance at December 31, 2020
Power	$	139	$	—	$	—	$	6	$	145	$	—	$	—	$	—	$	146
Renewable Energy	4,730		—		(1,486)		46		3,290		—		—		111		3,401
Aviation	9,839		—		—		20		9,859		—		(877)		266		9,247
Healthcare	17,226		(5,558)		—		60		11,728		89		—		37		11,855
Capital	904		(39)		—		(26)		839		—		(839)		—		—
Corporate(a)	1,136		—		—		(262)		873		—		—		2		876
Total	$	33,974	$	(5,597)	$	(1,486)	$	(156)	$	26,734	$	90	$	(1,717)	$	417	$	25,524

(a) Corporate balance at December 31, 2020 and 2019 is our Digital business.

In the fourth quarter of 2020, we performed our annual impairment test. Based on the results of this test, the fair values of each of our reporting units exceeded their carrying values.

We continue to monitor the operating results and cash flow forecasts of our Additive reporting unit in our Aviation segment as the fair value of this reporting unit was not significantly in excess of its carrying value. At December 31, 2020, our Additive reporting unit had goodwill of $243 million.

In the second quarter of 2020 we performed an interim impairment test at our Additive reporting unit within our Aviation segment and GECAS reporting unit within our Capital segment, both of which incorporated a combination of income and market valuation approaches. The results of the analysis indicated that carrying values of both reporting units were in excess of their respective fair values. Therefore, we recorded non-cash impairment losses of $877 million and $839 million for the Additive and GECAS reporting units, respectively, in the caption Goodwill impairments in our consolidated Statement of Earnings (Loss). All of the goodwill in Additive was the result of the Arcam AB and Concept Laser GmBH acquisitions in 2016. Of the $839 million of goodwill for GECAS, $729 million arose from the acquisition of Milestone Aviation, our helicopter leasing business, in 2015. After the impairment charges, there was no goodwill remaining in our GECAS reporting unit.

In 2019, goodwill decreased by $7,240 million, primarily as a result of transferring goodwill in our BioPharma business within our Healthcare segment to held for sale in the amount of $5,548 million, and recognizing a total non-cash goodwill impairment loss in our Grid Solutions equipment and services and Hydro reporting units in our Renewable Energy segment of $744 million and $742 million, respectively. After the impairment charges, the Grid Solutions equipment and services and Hydro reporting units have no remaining goodwill.

Determining the fair value of reporting units requires the use of estimates and significant judgments that are based on a number of factors including actual operating results. It is reasonably possible that the judgments and estimates described above could change in future periods.


		2020						2019
INTANGIBLE ASSETS SUBJECT TO AMORTIZATION December 31	Useful lives (in years)	Gross carrying amount		Accumulated amortization		Net		Gross carrying amount		Accumulated amortization		Net
Customer-related(a)	3 - 30	$	6,862	$	(3,432)	$	3,430	$	6,770	$	(3,070)	$	3,701
Patents and technology	2 - 25	8,191		(4,135)		4,056		8,180		(3,730)		4,450
Capitalized software	3 - 10	5,826		(3,840)		1,986		5,822		(3,651)		2,171
Trademarks & other	3 - 50	778		(477)		301		737		(406)		332
Total		$	21,657	$	(11,883)	$	9,774	$	21,510	$	(10,857)	$	10,653

(a) Balance includes payments made to our customers, primarily within our Aviation business.

Intangible assets decreased in 2020, primarily as a result of amortization. Consolidated amortization expense was $1,382 million, $1,569 million and $2,163 million for the years ended December 31, 2020, 2019 and 2018, respectively. Included within amortization expense for the years ended December 31, 2020, 2019 and 2018 were non-cash pre-tax impairment charges of $113 million, $103 million, and $428 million respectively.

In the third quarter of 2020, we recognized a non-cash pre-tax impairment charge of $113 million related to intangible assets at our Steam business within our Power segment due to our recent announcement to exit the new build coal power market. We determined the fair value of these intangible assets using an income approach. This charge was recorded by Corporate in Selling, general, and administrative expenses in our consolidated Statement of Earnings (Loss).

Estimated consolidated annual pre-tax amortization for intangible assets over the next five calendar years are as follows:


ESTIMATED 5 YEAR CONSOLIDATED AMORTIZATION	2021		2022		2023		2024		2025
Estimated annual pre-tax amortization	$	1,162	$	1,085	$	992	$	889	$	817

During 2020, we recorded additions to intangible assets subject to amortization of $420 million with a weighted-average amortizable period of 5.9 years, including capitalized software of $360 million, with a weighted-average amortizable period of 5.2 years.