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Goodwill and Other Intangible Assets
 9 Months Ended
Sep. 30, 2019
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Other Intangible Assets Goodwill and Other Intangible Assets
Goodwill    
Changes in the carrying value of goodwill by reportable segment for the nine months ended September 30, 2019 are as follows:
(in millions)
Water
Infrastructure
 
Applied Water
 
Measurement & Control Solutions
 
Total
Balance as of January 1, 2019
$
653

 
$
516

 
$
1,807

 
$
2,976

Activity in 2019
 
 
 
 
 
 
 
Divested/Acquired
—

 
—

 
19

 
19

Impairment
—

 
—

 
(148
)
 
(148
)
Foreign currency and other
(9
)
 
(7
)
 
(20
)
 
(36
)
Balance as of September 30, 2019
$
644

 
$
509

 
$
1,658

 
$
2,811


During the third quarter of 2019, the Company recorded a goodwill impairment charge of $148 million related to the Advanced Infrastructure Analytics (“AIA”) goodwill reporting unit. The impairment resulted from a downward revision of forecasted future cash flows. Factors that contributed to the revised forecast in the third quarter include lower than expected results as compared to prior forecasts, largely as a result of slower-than-expected conversion of pipeline opportunities to revenue. Additionally, we have continued to invest in the AIA platform ahead of the adoption curve, which has also impacted the near term profitability of the business. These factors drove the decrease in forecasted cash flows, and as such, the calculated fair value of the AIA reporting unit below its carrying value as of the third quarter.
To determine the fair value of the AIA reporting unit, the Company used the income approach. Under the income approach, the fair value of the AIA reporting unit was based on the present value of the estimated cash flows that the reporting unit is expected to generate over its remaining life. Cash flow projections were based on management’s estimates of revenue growth rates and operating margins, taking into consideration industry and market conditions. The discount rate was based on the weighted average cost of capital appropriate for the AIA reporting unit.
Other Intangible Assets
Information regarding our other intangible assets is as follows:
 
September 30, 2019
 
December 31, 2018
(in millions)
Carrying
Amount
 
Accumulated
Amortization
 
Net
Intangibles
 
Carrying
Amount
 
Accumulated
Amortization
 
Net
Intangibles
Customer and distributor relationships
$
939

 
$
(334
)
 
$
605

 
$
951

 
$
(286
)
 
$
665

Proprietary technology and patents
203

 
(105
)
 
98

 
198

 
(93
)
 
105

Trademarks
147

 
(49
)
 
98

 
148

 
(41
)
 
107

Software
405

 
(195
)
 
210

 
355

 
(164
)
 
191

Other
20

 
(16
)
 
4

 
24

 
(19
)
 
5

Indefinite-lived intangibles
165

 
—

 
165

 
159

 
—

 
159

Other Intangibles
$
1,879

 
$
(699
)
 
$
1,180

 
$
1,835

 
$
(603
)
 
$
1,232


Amortization expense related to finite-lived intangible assets was $35 million and $104 million for the three and nine months ended September 30, 2019, respectively, and $34 million and $108 million for the three and nine months ended September 30, 2018, respectively.
During the third quarter of 2019, the Company also assessed whether the carrying amounts of the AIA reporting unit’s long-lived assets may not be recoverable based on the revised forecasted cash flows, and therefore impaired. Our assessment resulted in an impairment charge of $7 million, primarily related to customer relationships, proprietary technology, software and property, plant and equipment. The charge was calculated
using an income approach, which is considered a Level 3 input for fair value measurement, and is reflected in “Restructuring and asset impairment charges” in our Condensed Consolidated Income Statements.
During the first quarter of 2019, we determined that the intended use of a finite lived customer relationship within the test application of our Measurement & Control Solutions segment had changed. Accordingly we recorded a $3 million impairment charge. The charge was also calculated using the income approach and is reflected in “Restructuring and asset impairment charges” in our Condensed Consolidated Income Statements.