Goodwill

The following table reflects goodwill allocated to each reporting segment as of September 30, 2014:



	Electricity			Gas			Water			Total Company
	(in thousands)
Balance at January 1, 2014
Goodwill before impairment	$	493,610		$	394,878		$	429,783		$	1,318,271
Accumulated impairment losses	(433,378		)	—			(336,315		)	(769,693		)
Goodwill, net	60,232			394,878			93,468			548,578

Goodwill impairment	(977		)	—			—			(977		)
Effect of change in exchange rates	(2,408		)	(24,211		)	(5,341		)	(31,960		)

Balance at September 30, 2014
Goodwill before impairment	463,550			370,667			397,462			1,231,679
Accumulated impairment losses	(406,703		)	—			(309,335		)	(716,038		)
Goodwill, net	$	56,847		$	370,667		$	88,127		$	515,641

During our 2013 annual goodwill impairment test, we determined that the carrying value of the Electricity reporting unit exceeded its fair value, primarily due to delays in global smart grid projects and lower volumes and pricing pressures in certain regions in Europe and Asia/Pacific. The revised forecast for the Electricity business drove a decrease in the fair value of the reporting unit. As a result, we performed the second step of the goodwill impairment test for the Electricity reporting unit, which indicated a goodwill impairment of $173.2 million. This charge was recorded during the fourth quarter of 2013. Upon finalizing our 2013 goodwill analysis late in the year-end reporting process, we determined $977,000 of additional goodwill impairment expense should have been recognized. In accordance with relevant accounting guidance, we evaluated the materiality of the error from a qualitative and quantitative perspective. Based on such evaluation, we concluded that recognizing the incremental goodwill impairment during the three months ended March 31, 2014 would not be material, quantitatively or qualitatively, to our results of operations for the three months ended March 31, 2014 or our expected full year results of operations for 2014 and would not have had a material impact on our results for the year ended December 31, 2013.

Refer to Note 1 for a description of our reporting units and the methods used to determine the fair values of our reporting units and to determine the amount of any goodwill impairment.

Our stock price has declined from $43.04 at October 1, 2013 to $38.75 at October 1, 2014, resulting in a decrease in our market capitalization. However, there were no indicators of impairment that would require an interim goodwill impairment test prior to our annual goodwill impairment test.

Goodwill and accumulated impairment losses associated with our international subsidiaries are recorded in their respective functional currencies; therefore, the carrying amounts of these balances increase or decrease, with a corresponding change in accumulated OCI, due to changes in foreign currency exchange rates.