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Goodwill and Other Intangible Assets
 12 Months Ended
Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Other Intangible Assets Goodwill and Other Intangible Assets
The Company performs an annual quantitative goodwill and indefinite-lived asset impairment analysis during the fourth quarter. The basis of the goodwill impairment and indefinite-lived intangible asset analyses is the Company's annual budget and three-year strategic plan. This includes a projection of future cash flows, which requires the Company to make significant assumptions and estimates about the extent and timing of future cash flows and revenue growth rates. These represent Company-specific inputs and assumptions about the use of the assets, as observable inputs are not available. These estimates and assumptions are subject to a high degree of uncertainty. Due to the many variables inherent in estimating fair value and the relative size of the goodwill and indefinite-lived intangible assets, differences in assumptions could have a material effect on the results of the analyses. There are many uncertainties regarding the COVID-19 global pandemic that could negatively affect the Company's results of operations, financial position, and cash flows. As a result, if there is an adverse change to the Company’s projected financial information, due to business performance or market conditions, this may be indicative that the fair value of its reporting units and indefinite-lived intangible assets have declined below their carrying values, which may result in non-cash goodwill or intangible asset impairment charges in a future period.

In the goodwill impairment analysis, for reporting units with goodwill, fair values are estimated using a combination of the income approach and market approach. The Company applies a 75% weighting to the income approach and a 25% weighting to the market approach. The most significant inputs in estimating the fair value of the Company's reporting units under the income approach are (i) projected operating margins, (ii) the revenue growth rate, and (iii) the discount rate, which is risk-adjusted based on the aforementioned inputs.

For the indefinite-lived asset impairment analysis, the fair value is based upon the prospective stream of hypothetical after-tax royalty cost savings discounted at rates that reflect the rates of return appropriate for these intangible assets. The primary, and most sensitive, inputs utilized in determining fair values of trade names and trademarks are (i) projected branded product sales, (ii) the revenue growth rate, (iii) the royalty rate, and (iv) the discount rate, which is risk-adjusted based on the projected branded sales.

Impairment charges for goodwill and intangible assets recognized by segment during the years ended December 31, 2020 and 2019 consist of the following:
Year Ended December 31, 2020
PowertrainRide PerformanceMotorpartsTotal
Goodwill impairment charges$160 $37 $70 $267 
Trade names and trademarks intangible asset impairment charges— 11 40 51 
Definite-lived intangible asset impairment charges— 65 — 65 
$160 $113 $110 $383 
Year Ended December 31, 2019
PowertrainRide PerformanceMotorpartsTotal
Goodwill impairment charges$18 $69 $21 $108 
Trade names and trademarks intangible asset impairment charges— — 133 133 
$18 $69 $154 $241 

At December 31, 2020 and 2019, goodwill consisted of the following:
December 31, 2020
Clean AirPowertrainRide PerformanceMotorpartsTotal
Gross carrying amount at beginning of period$22 $343 $259 $620 $1,244 
Reclassification from assets held for sale— — — 2 2 
Foreign exchange1 — 6 1 8 
Gross carrying amount at end of period23 343 265 623 1,254 
Accumulated impairment loss at beginning of period— (18)(212)(239)(469)
Impairment— (160)(37)(70)(267)
Foreign exchange— — (9)(1)(10)
Accumulated impairment loss at end of period— (178)(258)(310)(746)
Net carrying value at end of period$23 $165 $7 $313 $508 
December 31, 2019
Clean AirPowertrainRide PerformanceMotorpartsTotal
Gross carrying amount at beginning of period$22 $388 $210 $611 $1,231 
Measurement period adjustments— (45)24 13 (8)
Acquisitions— — 28 — 28 
Reclassification to assets held for sale— — — (4)(4)
Foreign exchange— — (3)— (3)
Gross carrying amount at end of period22 343 259 620 1,244 
Accumulated impairment loss at beginning of period— — (143)(219)(362)
Impairment— (18)(69)(21)(108)
Foreign exchange— — — 1 1 
Accumulated impairment loss at end of period— (18)(212)(239)(469)
Net carrying value at end of period$22 $325 $47 $381 $775 

During the first quarter of 2020, the Company concluded it was more likely than not that the fair values of certain of its reporting units and its indefinite-lived intangible assets had declined below their carrying values as a result of the effects of the COVID-19 global pandemic on the Company's projected financial information. The Company completed a goodwill impairment analysis for four of its reporting units with goodwill in the Powertrain, Motorparts, and Ride Performance segments. The difference between the reporting units' carrying values and fair values were recognized as impairment charges. The Company recognized $267 million in non-cash impairment charges related to its goodwill during the year ended December 31, 2020, which represented full impairments of the goodwill in one reporting unit in the Powertrain segment and one reporting unit in the Ride Performance segment, and partial impairments of goodwill in one reporting unit in the Powertrain segment and one reporting unit in the Motorparts segment.

For the annual impairment test performed in the fourth quarter of 2020, the estimated fair value of all reporting units with goodwill exceeded their carrying values. Additionally, the estimated fair value of all indefinite-lived assets exceeded their carrying values. No additional impairment expense was recognized in the fourth quarter of 2020.
The following table shows a summary of the number of reporting units with goodwill in each segment and whether or not the reporting unit's fair value exceeded its carrying value by more or less than 25%:
Segments
Clean AirPowertrainRide PerformanceMotorparts
Number of reporting units with goodwill3 1 1 1 
Number of reporting units where fair value exceeds carrying value:
Greater than 25%3 — 1 1 
Less than 25%— 1 — 
Goodwill for reporting units where fair value exceeds carrying value:
Greater than 25%$23 $— $7 $313 
Less than 25%— 165 — — 
$23 $165 $7 $313 

The one reporting unit above where fair value is not in excess of carrying value by 25% or more is a reporting unit acquired as part of the Federal-Mogul Acquisition.

The Öhlins Acquisition in 2019 resulted in $42 million of goodwill which was included in the Ride Performance segment. During the year ended December 31, 2019, the Company made the following adjustments to goodwill in the measurement period to the preliminary purchase price allocation for the Acquisitions:
•an increase of $14 million for the Öhlins Acquisition; and
•a net decrease of $22 million for the Federal-Mogul Acquisition.

The Company recognized goodwill impairment charges of $108 million for the year ended December 31, 2019, which consisted of the following:
•During the first quarter of 2019, the Company reorganized the reporting structure of its Aftermarket, Ride Performance, and Motorparts segments and the underlying reporting units within those segments. The Company reassigned assets and liabilities (excluding goodwill) to the reporting units affected. Goodwill was then reassigned to the reporting units using a relative fair value approach based on the fair value of the elements transferred and the fair value of the elements remaining within the original reporting units. The Company tested goodwill for impairment on a pre-reorganization basis and determined there was no impairment for the affected reporting units. The Company also performed an impairment analysis on a post-reorganization basis and determined $60 million of goodwill was impaired for two reporting units within its Ride Performance segment, one of which was a full impairment of the goodwill. As a result, this non-cash charge was recorded in the first quarter of 2019. Goodwill allocated to other reporting units was supported by the valuation performed at that time;
•During the third quarter of 2019, the Company finalized purchase accounting for the Federal-Mogul Acquisition. As a result, the final goodwill allocation was reassigned to the reorganized segments and reporting unit structure that occurred in the first quarter of 2019 using a relative fair value approach and the Company determined an incremental $9 million of goodwill was impaired for one reporting unit in its Ride Performance segment, which continued to represent a full impairment of goodwill in that reporting unit. This non-cash charge was recorded in the third quarter of 2019; and
•As a result of the annual goodwill impairment analysis performed in the fourth quarter of 2019, the estimated fair value of one of the reporting units in the Motorparts segment was lower than its carrying value and an impairment charge of $21 million was recognized, which was a full impairment of the goodwill in that reporting unit. Additionally, the estimated fair value of one of the reporting units in the Powertrain segment was determined to be lower than the carrying value, and a partial goodwill impairment charge of $18 million was recognized. At December 31, 2019, this reporting unit has $40 million of goodwill after recognizing the impairment. This non-cash charge was recorded in the fourth quarter of 2019.

As a result of the goodwill impairment analysis in the fourth quarter of 2018, the estimated fair value for one reporting unit in the Ride Performance segment was lower than its carrying value and an impairment charge of $3 million was recognized for the year ended December 31, 2018.
At December 31, 2020 and 2019, intangible assets consisted of the following:
 December 31, 2020December 31, 2019
 Useful LivesGross Carrying
Value		Accumulated
Amortization		Net Carrying
Value		Gross Carrying
Value		Accumulated
Amortization		Net Carrying
Value
Definite-lived intangible assets:
Customer relationships and platforms10 years$995 $(282)$713 $988 $(123)$865 
Customer contract10 years8 (6)2 8 (6)2 
Patents
10 to 17 years
1 (1)— 1 (1)— 
Technology rights
10 to 30 years
139 (51)88 133 (37)96 
Packaged kits know-how10 years54 (12)42 54 (7)47 
Catalogs10 years47 (11)36 47 (6)41 
Licensing agreements
3 to 5 years
66 (35)31 63 (18)45 
Land use rights
28 to 46 years
49 (4)45 47 (3)44 
$1,359 $(402)957 $1,341 $(201)1,140 
Indefinite-lived intangible assets:
Trade names and trademarks237 282 
Total$1,194 $1,422 

The amortization expense associated with definite-lived intangible assets for the year ended December 31, 2020, 2019, and 2018 was $130 million, $138 million, and $32 million and is included in “Depreciation and amortization” within the consolidated statements of income (loss).

During the first quarter of 2020, the Company also completed an analysis to determine the fair value of its trade names and trademarks for its reporting units in the Ride Performance and Motorparts segments. It was determined their carrying values exceeded their fair values and the Company recognized $51 million in non-cash impairment charges related to these indefinite-lived intangible assets during the year ended December 31, 2020, which represented a full impairment of certain trade names and trademarks in the Motorparts segment, and a partial impairment of certain trade names and trademarks in the Ride Performance and Motorparts segments.

As discussed in more details in Note 4, “Restructuring Charges, Net and Asset Impairments”, the Company concluded impairment triggers had occurred during the first quarter of 2020 for certain long-lived asset groups within the Ride Performance segment. As a result, the Company recorded non-cash impairment charges of $65 million related to its definite-lived intangible assets during the year ended December 31, 2020, which represented full impairments of the definite-lived intangible assets in these two reporting units.

As a result of the annual indefinite-lived intangible asset analysis performed in the fourth quarter of 2019, the estimated fair value of certain trademarks and trade names within the Motorparts segment were less than their carrying values. Accordingly, non-cash impairment charges of $133 million were recognized, both of which were partial impairments. As a result, the carrying value equals fair value at December 31, 2019.

The expected future amortization expense for the Company's definite-lived intangible assets is as follows:
202120222023202420252026 and thereafterTotal
Expected amortization expense$130 $125 $122 $115 $115 $350 $957