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Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Changes in the carrying value of goodwill by reportable segment during the years ended December 31, 2016 and 2015 are as follows:



(in millions)	Water Infrastructure			Applied Water			Sensus			Total
Balance as of December 31, 2014	$	1,098		$	537		$	—		$	1,635
Activity in 2015
Acquired (a)	10			—			—			10
Foreign currency and other	(42		)	(19		)	—			(61		)
Balance as of December 31, 2015	$	1,066		$	518		$	—		$	1,584
Activity in 2016
Acquired (b)	38			—			1,068			1,106
Foreign currency and other	(30		)	(13		)	(15		)	(58		)
Balance as of December 31, 2016	$	1,074		$	505		$	1,053		$	2,632


(a)	On October 22, 2015, we acquired substantially all of the assets of Hypack, Inc. and recorded $10 million of goodwill. Refer to Note 3, "Acquisitions and Divestitures" for additional information.


(b)	On February 1, 2016, we acquired Tideland and recorded $38 million of goodwill. On October 18, 2016, we acquired Visenti and recorded $6 million of goodwill. On October 31, 2016, we acquired Sensus and recorded $1,062 million of goodwill. Refer to Note 3, "Acquisitions and Divestitures" for additional information.

During the fourth quarter of 2016, we performed our annual impairment assessment and determined that the estimated fair values of our goodwill reporting units were in excess of each of their carrying values. However, future goodwill impairment tests could result in a charge to earnings. We will continue to evaluate goodwill on an annual basis as of the beginning of our fourth quarter and whenever events and changes in circumstances indicate there may be a potential impairment.

Other Intangible Assets

Information regarding our other intangible assets is as follows:



(in millions)	December 31, 2016							December 31, 2015
	Carrying Amount		Accumulated Amortization			Net Intangibles		Carrying Amount		Accumulated Amortization			Net Intangibles
Customer and distributor relationships	$	891	$	(168	)	$	723	$	320	$	(140	)	$	180
Proprietary technology and patents	156		(61		)	95		116		(54		)	62
Trademarks	139		(23		)	116		35		(19		)	16
Software	218		(118		)	100		155		(110		)	45
Other	26		(13		)	13		8		(8		)	—
Indefinite-lived intangibles	154		—			154		132		—			132
Other intangibles	$	1,584	$	(383	)	$	1,201	$	766	$	(331	)	$	435

We determined that no impairment of the indefinite-lived intangibles existed as of the measurement date of our annual impairment assessment in 2016 or 2015. Future impairment tests could result in a charge to earnings. We will continue to evaluate the indefinite-lived intangible assets on an annual basis as of the beginning of our fourth quarter and whenever events and changes in circumstances indicate there may be a potential impairment.

Customer and distributor relationships, proprietary technology and patents, trademarks, software and other are amortized over weighted average lives of approximately 14 years, 16 years, 12 years, 5 years and 5 years, respectively.

Total amortization expense for intangible assets was $64 million, $45 million, and $47 million for 2016, 2015 and 2014, respectively.

Estimated amortization expense for each of the five succeeding years is as follows:



(in millions)
2017	$	119
2018	107
2019	103
2020	99
2021	85

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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