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GOODWILL AND OTHER INTANGIBLES
 12 Months Ended
Dec. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND OTHER INTANGIBLES GOODWILL AND OTHER INTANGIBLES
Goodwill is the excess of the purchase price over the estimated fair value of identifiable net assets acquired in business combinations. As of December 31, 2024, the Company had four reportable segments and four goodwill reporting units.

During the first quarter of 2024, the Company reduced the outlook of its PowerDrive Systems business in response to volatility in actual and expected customer production schedules. This was viewed as a triggering event, and as a result, the Company performed an interim quantitative analysis of the fair value of the PowerDrive Systems reporting unit. Based on this interim impairment test, the PowerDrive Systems reporting unit had an estimated fair value that exceeded its carrying value, including goodwill, by approximately 5%, resulting in no impairment, at that time.

During the third quarter of 2024, as a result of the previously disclosed reportable segment realignment, the Company disaggregated certain entities within one of the Company’s historical goodwill reporting units across two reporting units: Drivetrain & Morse Systems and Battery & Charging Systems. As a result of this change, the Company allocated goodwill to these two reporting units on a relative fair value basis. The Company estimated the fair values of the businesses to be split from the historical reporting unit based upon the present value of their anticipated future cash flows. The Company’s determination of fair value involved judgment and the use of estimates and assumptions. In conjunction with the goodwill allocation, the Company performed a quantitative impairment assessment of the historical reporting units’ goodwill immediately before and after the segment realignment. The quantitative analyses did not result in any impairment charges as the fair value of each reporting unit exceeded its respective carrying value. The disclosures below have been updated accordingly, which included recasting prior period information for the new reporting structure. Refer to Note 24, “Reportable Segments and Related Information,” of the Consolidated Financial Statements for additional details.

During the fourth quarter of 2024, the Company performed a qualitative analysis on two of the reporting units and performed a quantitative analysis on the other two reporting units. During the fourth quarter of 2023, the Company performed a quantitative analysis on all reporting units. For the quantitative analyses, the estimated fair values were determined using an income and market approach. The market approach is based on market multiples (revenue and “EBITDA”, defined as earnings before interest, taxes, depreciation and amortization) and requires an estimate of appropriate multiples based on market data for comparable companies. The market valuation models and other financial ratios used by the Company require certain assumptions and estimates regarding the applicability of those models to the Company’s facts and circumstances.

The Company believes the assumptions and estimates used to determine the estimated fair value are reasonable. Different assumptions could materially affect the estimated fair value. The primary assumptions affecting the Company’s 2024 goodwill quantitative impairment review are as follows:

•Discount rates: The Company used a range of 13.5% to 14.5% weighted average cost of capital (“WACC”) as the discount rates for future cash flows. The WACC is intended to represent a rate of return that would be expected by a market participant.

•Operating income margin: The Company used historical and expected operating income margins, which may vary based on the projections of the reporting unit being evaluated.

•Revenue growth rates: The Company used a global automotive market industry growth rate forecast adjusted to estimate its own market participation for product lines.
In addition to the above primary assumptions, the Company noted the following risks to volume and operating income assumptions that could have an impact on the discounted cash flow models:

•The automotive industry is cyclical, and the Company’s results of operations could be adversely affected by industry downturns.
•The automotive industry is evolving, and if the Company does not respond appropriately, its results of operations could be adversely affected.
•The Company is dependent on market segments that use its key products and could be affected by decreasing demand in those segments.
•The Company is subject to risks related to international operations.

In connection with the preparation of the Company’s annual financial statements, the Company noted deterioration in the forecast for its PowerDrive Systems and Battery & Charging Systems businesses. This deterioration was due to further decreases in demand for eProducts as compared to the Company’s expectations as a result of electric vehicle adoption volatility across different regions. This downward revision to the outlooks of these businesses was due to volatility in actual and expected customer production schedules. The Company had made capital investments to support new eProducts business that has been delayed and/or launched with lower-than-expected volumes. As a result, during the fourth quarter of 2024, the Company recorded goodwill impairment charges of $468 million and $109 million related to the PowerDrive Systems and Battery & Charging Systems reporting units, respectively.

Future changes in the judgments, assumptions and estimates from those used in acquisition-related valuations and goodwill impairment testing, including discount rates or future operating results and related cash flow projections, could result in significantly different estimates of the fair values in the future. An increase in discount rates, a reduction in projected cash flows or a combination of the two could lead to a reduction in the estimated fair values, which may result in impairment charges that could materially affect the Company’s financial statements in any given year.

A summary of the changes in the carrying amount of goodwill is presented in the following tables. The prior period balances have been recast for inter-segment transitions of certain businesses that were completed during 2022. Refer to Note 24, “Reportable Segments and Related Information” for more information.
2024
(in millions)Turbos & Thermal TechnologiesDrivetrain & Morse SystemsPowerDrive SystemsBattery & Charging SystemsTotal
Gross goodwill balance, January 1$1,257 $1,126 $481 $651 $3,515 
Accumulated impairment losses, January 1(502)— — — (502)
Net goodwill balance, January 1$755 $1,126 $481 $651 $3,013 
Goodwill during the year:
Impairment— — (468)(109)(577)
Measurement period adjustments1
— — 6 — 6 
Other, primarily translation adjustment(22)(6)(19)(38)(85)
Net goodwill balance, December 31$733 $1,120 $— $504 $2,357 
2023
(in millions)Turbos & Thermal TechnologiesDrivetrain & Morse SystemsPowerDrive SystemsBattery & Charging SystemsTotal
Gross goodwill balance, January 1$1,246 $1,126 $480 $628 $3,480 
Accumulated impairment losses, January 1(502)— — — (502)
Net goodwill balance, January 1$744 $1,126 $480 $628 $2,978 
Goodwill during the year:
Acquisitions1
— — 14 8 22 
Measurement period adjustments1
— — — (6)(6)
Other, primarily translation adjustment11 — (13)21 19 
Net goodwill balance, December 31$755 $1,126 $481 $651 $3,013 
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1 Acquisitions and measurement period adjustments relate to the Company’s 2023 purchases of SSE and Eldor.

The Company’s other intangible assets, primarily from acquisitions, consist of the following:
 December 31, 2024December 31, 2023
(in millions)Estimated useful lives (years)Gross
carrying
amount		Accumulated
amortization		Net
carrying
amount		Gross
carrying
amount		Accumulated
amortization		Net
carrying
amount
Amortized intangible assets:      
Patented and unpatented technology
5 - 15
$352 $172 $180 $364 $145 $219 
Customer relationships
6 - 15
610 321 289 641 305 336 
Miscellaneous
2 - 5
9 7 2 9 6 3 
Total amortized intangible assets971 500 471 1,014 456 558 
Unamortized trade names3 — 3 6 — 6 
Total other intangible assets$974 $500 $474 $1,020 $456 $564 

Amortization of other intangible assets was $69 million, $67 million and $69 million for the years ended December 31, 2024, 2023 and 2022, respectively. The Company utilizes the straight-line method of amortization recognized over the estimated useful lives of the assets. The estimated future annual amortization expense, primarily for acquired intangible assets, is as follows: $66 million in 2025, $59 million in 2026, $53 million in 2027, $52 million in 2028, $52 million in 2029 and $189 million thereafter.

A roll forward of the gross carrying amounts and related accumulated amortization of the Company’s other intangible assets is presented below:
Gross carrying amountsAccumulated amortization
(in millions)2024202320242023
Beginning balance, January 1$1,020 $1,003 $456 $384 
Acquisitions and measurement period adjustments1 (Note 2)
(4)14 — — 
Write-offs(3)— — — 
Amortization— — 69 67 
Translation adjustment(39)3 (25)5 
Ending balance, December 31$974 $1,020 $500 $456 
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1    Acquisitions relate to the Company’s 2023 purchases of SSE and Eldor.