Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill — The following table summarizes the carrying amount of goodwill by reportable segment for the years ended December 31, 2017 and 2016 (in millions):



	US			Andes			MCAC		Eurasia			Total
Balance as of December 31, 2016
Goodwill	$	2,674		$	899		$	149	$	190		$	3,912
Accumulated impairment losses	(2,633		)	—			—		(122		)	(2,755		)
Net balance	41			899			149		68			1,157
Transfer to assets held-for-sale ⁽¹⁾	—			(30		)	—		(68		)	(98		)
Balance as of December 31, 2017
Goodwill	2,674			869			149		122			3,814
Accumulated impairment losses	(2,633		)	—			—		(122		)	(2,755		)
Net balance	$	41		$	869		$	149	$	—		$	1,059

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⁽¹⁾	See Note 22---Held-For-Sale Businesses and Dispositions for further information.

DP&L — During the fourth quarter of 2015, the Company performed the annual goodwill impairment test at its DP&L reporting unit and recognized a goodwill impairment expense of $317 million. The reporting unit failed Step 1 as its fair value was less than its carrying amount, which was primarily due to a decrease in forecasted dark spreads that were driven by decreases in projected forward power prices, and lower than expected revenues from a new CP product. The fair value of the reporting unit was determined under the income approach using a discounted cash flow valuation model. The significant assumptions included within the discounted cash flow valuation model were forward commodity price curves, the amount of non-bypassable charges from the pending ESP, expected revenues from the new CP product, and planned environmental expenditures. In Step 2, goodwill was determined to have an implied negative fair value after the hypothetical purchase price allocation under the accounting guidance for business combinations; therefore, a full impairment of the remaining goodwill balance of $317 million was recognized. DP&L is reported in the US SBU reportable segment.

Other Intangible Assets — The following table summarizes the balances comprising Other intangible assets in the accompanying Consolidated Balance Sheets (in millions) as of the periods indicated:



	December 31, 2017							December 31, 2016
	Gross Balance		Accumulated Amortization			Net Balance		Gross Balance		Accumulated Amortization			Net Balance
Subject to Amortization
Internal-use software	$	416	$	(330	)	$	86	$	396	$	(304	)	$	92
Contracts	92		(21		)	71		53		(15		)	38
Contractual payment rights ⁽¹⁾	65		(47		)	18		56		(42		)	14
Project development rights	57		(1		)	56		4		(1		)	3
Other ⁽²⁾	98		(42		)	56		103		(37		)	66
Subtotal	728		(441		)	287		612		(399		)	213
Indefinite-Lived Intangible Assets
Land use rights	45		—			45		47		—			47
Water rights	20		—			20		17		—			17
Other	14		—			14		10		—			10
Subtotal	79		—			79		74		—			74
Total	$	807	$	(441	)	$	366	$	686	$	(399	)	$	287

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⁽¹⁾	Represent legal rights to receive system reliability payments from the regulator.


⁽²⁾	Includes management rights, sales concessions, gas extraction rights, and other individually insignificant intangible assets.

The following tables summarize other intangible assets acquired during the periods indicated (in millions):



December 31, 2017	Amount		Subject to Amortization/Indefinite-Lived	Weighted Average Amortization Period (in years)	Amortization Method
Project Development Rights	$	53	Subject to Amortization	30	Straight-line
Contracts	34		Subject to Amortization	25	Straight-line
Internal-use software	17		Subject to Amortization	7	Straight-line
Other	8		Various	N/A	N/A
Total	$	112



December 31, 2016	Amount		Subject to Amortization/Indefinite-Lived	Weighted Average Amortization Period (in years)	Amortization Method
Internal-use software	$	41	Subject to Amortization	4	Straight-line
Contracts	24		Subject to Amortization	26	Straight-line
Other	5		Subject to Amortization	13	Straight-line
Total	$	70

The following table summarizes the estimated amortization expense by intangible asset category for 2018 through 2022:



(in millions)	2018		2019		2020		2021		2022
Internal-use software	$	17	$	14	$	12	$	10	$	9
Contracts	5		5		5		5		5
Other	11		12		10		8		9
Total	$	33	$	31	$	27	$	23	$	23

Intangible asset amortization expense was $34 million, $37 million and $47 million for the years ended December 31, 2017, 2016 and 2015, respectively.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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