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Goodwill and Other Intangible Assets
 12 Months Ended
Dec. 31, 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 during the years ended December 31, 2019 and 2018 are as follows:
(in millions)
Water
Infrastructure
 
Applied Water
 
Measurement & Control Solutions
 
Total
Balance as of December 31, 2017
$
667

 
$
526

 
$
1,575

 
$
2,768

Activity in 2018
 
 
 
 
 
 
 
Divested/acquired
—

 
—

 
279

 
279

Foreign currency and other
(14
)
 
(10
)
 
(47
)
 
(71
)
Balance as of December 31, 2018
$
653

 
$
516

 
$
1,807

 
$
2,976

Activity in 2019
 
 
 
 
 
 
 
Acquired
—

 
—

 
19

 
19

Impairment
—

 
—

 
(148
)
 
(148
)
Foreign currency and other
(2
)
 
(3
)
 
(3
)
 
(8
)
Balance as of December 31, 2019
$
651

 
$
513

 
$
1,675

 
$
2,839


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 July 1, 2019.
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.
During the fourth quarter of 2019, 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, 2019
 
December 31, 2018
 
Carrying
Amount
 
Accumulated
Amortization
 
Net
Intangibles
 
Carrying
Amount
 
Accumulated
Amortization
 
Net
Intangibles
Customer and distributor relationships
$
945

 
$
(352
)
 
$
593

 
$
951

 
$
(286
)
 
$
665

Proprietary technology and patents
204

 
(111
)
 
93

 
198

 
(93
)
 
105

Trademarks
148

 
(52
)
 
96

 
148

 
(41
)
 
107

Software
428

 
(206
)
 
222

 
355

 
(164
)
 
191

Other
20

 
(16
)
 
4

 
24

 
(19
)
 
5

Indefinite-lived intangibles
166

 
—

 
166

 
159

 
—

 
159

Other intangibles
$
1,911

 
$
(737
)
 
$
1,174

 
$
1,835

 
$
(603
)
 
$
1,232


We determined that no impairment of the indefinite-lived intangibles existed as of the measurement date of our impairment assessment in 2019 or 2018. 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, 14 years, 13 years, 6 years and 3 years, respectively.
Total amortization expense for intangible assets was $140 million, $144 million, and $125 million for 2019, 2018 and 2017, respectively.
Estimated amortization expense for each of the five succeeding years is as follows:
(in millions)
 
2020
$
136

2021
124

2022
115

2023
108

2024
99


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 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 Consolidated Income Statements.