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GOODWILL AND OTHER INTANGIBLES | 12 Months Ended
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Dec. 31, 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 December 31, 2025, the Company had four reportable segments and four goodwill reporting units. 2025 Goodwill Analyses 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 first quarter of 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 2, “Acquisitions and Dispositions,” to the 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. 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 at that time. During the fourth quarter of 2025, the Company performed a qualitative analysis on its Turbos & Thermal Technologies and Drivetrain & Morse Systems reporting units and performed a quantitative analysis on its Battery & Charging Systems reporting unit. The goodwill associated with the Company’s PowerDrive Systems reporting unit was fully impaired during the year ended December 31, 2024. The Company’s qualitative assessment on its Turbos & Thermal Technologies and Drivetrain & Morse Systems reporting units indicated it was more-likely-than-not the fair value of these reporting units exceeded the carrying value. For the quantitative analysis of the Battery & Charging Systems reporting unit, the estimated fair values were determined using an income approach. Under the income approach, fair value is determined based on present value of estimated future cash flows, discounted at an appropriate risk-adjusted rate. 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 significant assumptions affecting the Company’s 2025 goodwill quantitative impairment review were as follows: •Discount rates: The Company used a 14% 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 (loss) margin: The Company used historical and expected operating income (loss) margins, which may vary based on the projection 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 significant 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. During the fourth quarter of 2025, in connection with the preparation of the Company’s annual financial statements, the Company noted deterioration in the forecast for its Battery & Charging Systems business. This deterioration was due to dual sourcing actions by certain customers and electric vehicle adoption delays in North America. As a result, during the fourth quarter of 2025, the Company recorded an incremental impairment charge of $410 million. For the year ended December 31, 2025, the Company recorded total goodwill impairment charges of $423 million related to the Battery & Charging Systems reporting unit. The goodwill impairment charges related to Battery & Charging Systems represent the difference between carrying value and fair value, meaning the carrying value for this reporting unit now approximates its fair value. 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. 2024 Goodwill Analyses 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. 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. 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. During the fourth quarter of 2024, 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. With respect to the quantitative analyses performed during the years ended December 31, 2025, 2024 and 2023, 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. Refer to Note 24, “Reportable Segments and Related Information” for more information.
| 2025
(in millions) | Turbos & Thermal Technologies |  | Drivetrain & Morse Systems |  | PowerDrive Systems |  | Battery & Charging Systems |  | Total
Gross goodwill balance, January 1 | $ | 1,235 |  |  | $ | 1,120 |  |  | $ | 468 |  |  | $ | 613 |  |  | $ | 3,436 |
Accumulated impairment losses, January 1 | (502) |  |  | — |  |  | (468) |  |  | (109) |  |  | (1,079) |
Net goodwill balance, January 1 | $ | 733 |  |  | $ | 1,120 |  |  | $ | — |  |  | $ | 504 |  |  | $ | 2,357 |
Goodwill during the year: |  |  |  |  |  |  |  |  |
Impairment | — |  |  | — |  |  | — |  |  | (423) |  |  | (423) |
Other, primarily translation adjustment | 44 |  |  | 12 |  |  | — |  |  | 65 |  |  | 121 |
Net goodwill balance, December 31 | $ | 777 |  |  | $ | 1,132 |  |  | $ | — |  |  | $ | 146 |  |  | $ | 2,055 |
Gross goodwill balance, December 31 | $ | 1,279 |  |  | $ | 1,132 |  |  | $ | 468 |  |  | $ | 678 |  |  | $ | 3,557 |
Accumulated impairment losses, December 31 | (502) |  |  | — |  |  | (468) |  |  | (532) |  |  | (1,502) |
Net goodwill balance, December 31 | $ | 777 |  |  | $ | 1,132 |  |  | $ | — |  |  | $ | 146 |  |  | $ | 2,055 |
| 2024
(in millions) | Turbos & Thermal Technologies |  | Drivetrain & Morse Systems |  | PowerDrive Systems |  | Battery & Charging Systems |  | Total
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 adjustments 1 | — |  |  | — |  |  | 6 |  |  | — |  |  | 6 |
Other, primarily translation adjustment | (22) |  |  | (6) |  |  | (19) |  |  | (38) |  |  | (85) |
Net goodwill balance, December 31 | $ | 733 |  |  | $ | 1,120 |  |  | $ | — |  |  | $ | 504 |  |  | $ | 2,357 |
Gross goodwill balance, December 31 | $ | 1,235 |  |  | $ | 1,120 |  |  | $ | 468 |  |  | $ | 613 |  |  | $ | 3,436 |
Accumulated impairment losses, December 31 | (502) |  |  | — |  |  | (468) |  |  | (109) |  |  | (1,079) |
Net goodwill balance, December 31 | $ | 733 |  |  | $ | 1,120 |  |  | $ | — |  |  | $ | 504 |  |  | $ | 2,357 |
_____________________________ 1 Measurement period adjustments relate to the Company’s 2023 purchase of Eldor Corporation. The Company’s other intangible assets, primarily from acquisitions, consist of the following:
|  |  | December 31, 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 |  | $ | 338 |  |  | $ | 210 |  |  | $ | 128 |  |  | $ | 352 |  |  | $ | 172 |  |  | $ | 180 |
Customer relationships | 6 - 15 |  | 639 |  |  | 379 |  |  | 260 |  |  | 610 |  |  | 321 |  |  | 289 |
Miscellaneous | 2 - 5 |  | 10 |  |  | 8 |  |  | 2 |  |  | 9 |  |  | 7 |  |  | 2 |
Total amortized intangible assets |  |  | 987 |  |  | 597 |  |  | 390 |  |  | 971 |  |  | 500 |  |  | 471 |
Unamortized trade names |  |  | 4 |  |  | — |  |  | 4 |  |  | 3 |  |  | — |  |  | 3 |
Total other intangible assets |  |  | $ | 991 |  |  | $ | 597 |  |  | $ | 394 |  |  | $ | 974 |  |  | $ | 500 |  |  | $ | 474 |
Amortization of other intangible assets was $66 million, $69 million and $67 million for the years ended December 31, 2025, 2024 and 2023, 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: $57 million in 2026, $49 million in 2027, $49 million in 2028, $50 million in 2029, $48 million in 2030 and $137 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 amounts |  | Accumulated amortization
(in millions) | 2025 |  | 2024 |  | 2025 |  | 2024
Beginning balance, January 1 | $ | 974 |  |  | $ | 1,020 |  |  | $ | 500 |  |  | $ | 456 |
Measurement period adjustments 1 | — |  |  | (4) |  |  | — |  |  | — |
Impairment / write-offs | (36) |  |  | (3) |  |  | (9) |  |  | — |
Amortization | — |  |  | — |  |  | 66 |  |  | 69 |
Translation adjustment | 53 |  |  | (39) |  |  | 40 |  |  | (25) |
Ending balance, December 31 | $ | 991 |  |  | $ | 974 |  |  | $ | 597 |  |  | $ | 500 |
_____________________________ 1 Measurement period adjustments relate to the Company’s 2023 purchase of Eldor Corporation.

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