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GOODWILL AND OTHER INTANGIBLES | 6 Months Ended
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Jun. 30, 2025
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 June 30, 2025, the Company had four reportable segments and four goodwill reporting units. During the fourth quarter of each year, the Company assesses its goodwill and indefinite-lived intangible assets assigned to each of its reporting units. In addition, the Company may test goodwill in between annual test dates if an event occurs or circumstances change that could more-likely-than-not reduce the fair value of a reporting unit below its carrying value. During the first quarter of 2025, as a result of the Company’s plan to exit the charging business, the Company separately allocated the goodwill from its historical reporting unit of Battery & Charging Systems to the battery systems business and to the charging business on a relative fair value basis. The Company estimated the allocated fair values of the businesses from the historical reporting unit based upon the present value of their anticipated future cash flows. The estimated fair value of the charging business was determined using a cost approach. The Company’s determination of fair value involved judgment and the use of estimates and assumptions. During the six months ended June 30, 2025, the relative fair value analysis resulted in an allocation, and subsequent impairment, of $13 million related to the goodwill allocated to the charging business. Refer to Note 3, “Acquisitions and Dispositions,” to the Condensed Consolidated Financial Statements for more information. In conjunction with the goodwill allocation in the first quarter of 2025, the Company performed a quantitative impairment assessment of the Battery & Charging Systems’ goodwill after the impairment of the charging business’ goodwill. The estimated fair value of the battery systems business was determined using an income approach, consistent with the Company’s analysis performed during the fourth quarter of 2024. The most critical assumptions used in the calculation of the fair value of the battery systems business were projected revenue growth rates, projected operating income, and discount rates. Based on this interim impairment test, the Battery & Charging Systems reporting unit had an estimated fair value that exceeded its carrying value, including goodwill, by approximately 18%, resulting in no impairment. The fair value of the Battery & Charging Systems reporting unit’s goodwill is sensitive to differences between estimated and actual cash flows, including changes in the projected revenue, projected operating margin and discount rate used to evaluate the fair value of these assets and market multiples assumptions applied by the Company. Future changes in the judgments, assumptions and estimates from those used in 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. Additionally, as a result of the Company’s exit of the charging business, during the six months ended June 30, 2025, the Company impaired $22 million of other intangible assets. Other than as described above, the Company noted no events or circumstances related to any of the Company’s reporting units in the three and six months ended June 30, 2025 that required additional assessment or testing. A summary of the changes in the carrying amount of goodwill are as follows:
(in millions) | Turbos & Thermal Technologies |  | Drivetrain & Morse Systems |  | PowerDrive Systems |  | Battery & Charging Systems |  | Total
Gross goodwill balance, December 31, 2024 | $ | 1,235 |  |  | $ | 1,120 |  |  | $ | 468 |  |  | $ | 613 |  |  | $ | 3,436 |
Accumulated impairment losses, December 31, 2024 | (502) |  |  | — |  |  | (468) |  |  | (109) |  |  | (1,079) |
Net goodwill balance, December 31, 2024 | $ | 733 |  |  | $ | 1,120 |  |  | $ | — |  |  | $ | 504 |  |  | $ | 2,357 |
Goodwill during the period: |  |  |  |  |  |  |  |  |
Impairment | — |  |  | — |  |  | — |  |  | (13) |  |  | (13) |
Other, primarily translation adjustment | 44 |  |  | 14 |  |  | — |  |  | 65 |  |  | 123 |
Ending balance, June 30, 2025 | $ | 777 |  |  | $ | 1,134 |  |  | $ | — |  |  | $ | 556 |  |  | $ | 2,467 |
The Company’s other intangible assets, primarily from acquisitions, consist of the following:
|  |  | June 30, 2025 |  | December 31, 2024
(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 |  | $ | 344 |  |  | $ | 196 |  |  | $ | 148 |  |  | $ | 352 |  |  | $ | 172 |  |  | $ | 180 |
Customer relationships | 6 - 15 |  | 639 |  |  | 363 |  |  | 276 |  |  | 610 |  |  | 321 |  |  | 289 |
Miscellaneous | 2 - 5 |  | 10 |  |  | 8 |  |  | 2 |  |  | 9 |  |  | 7 |  |  | 2 |
Total amortized intangible assets |  |  | 993 |  |  | 567 |  |  | 426 |  |  | 971 |  |  | 500 |  |  | 471 |
Unamortized trade names |  |  | 4 |  |  | — |  |  | 4 |  |  | 3 |  |  | — |  |  | 3 |
Total other intangible assets |  |  | $ | 997 |  |  | $ | 567 |  |  | $ | 430 |  |  | $ | 974 |  |  | $ | 500 |  |  | $ | 474 |

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- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 350 -SubTopic 30 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/350-30/tableOfContent Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 350 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/350-20/tableOfContent + Details
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