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Note 3 - Goodwill and Other Intangible Assets | 6 Months Ended
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Jun. 30, 2020
Notes to Financial Statements |
Goodwill and Intangible Assets Disclosure [Text Block] | Note 3. Goodwill and Other Intangible Assets Goodwill — Our goodwill is tested for impairment annually as of October 31 for all of our reporting units, and more frequent if events or circumstances warrant such a review. We completed numerous acquisitions in 2018 and 2019 that are included in our Commercial Vehicle and Off-Highway reporting units. These acquisitions were recorded on the balance sheet at their estimated acquisition date fair values and therefore had no cushion of fair value over their carrying value. As a result of the effect of COVID-19 on our expected future operating cash flows, a decrease in our share price which reduced our market capitalization below the book value of net assets and lower cushion in our expected reporting unit fair values as a result of the recent acquisitions, we determined certain impairment triggers had occurred. Accordingly, we performed interim impairment analyses at each of our reporting units as of March 31, 2020. As discussed in our 2019 Form 10-K, we estimate the fair value of the reporting units using various valuation methodologies, including discounted cash flow projections and multiples of current earnings. In determining fair value using discounted cash flow projections, we make significant assumptions and estimates about the extent and timing of future cash flows, including revenue growth rates, projected gross margins, discount rates, terminal growth rates, and exit earnings multiples. If the estimated fair value of the reporting unit exceeds its carrying value, the goodwill is considered not impaired. If the carrying value of the reporting unit exceeds its estimated fair value, a goodwill impairment charge is recorded for the difference, with the impairment loss limited to the total amount of goodwill allocated to that reporting unit. Based on the results of our interim impairment tests, we concluded that carrying value exceeded fair value in our Commercial Vehicle and Light Vehicle reporting units and we recorded a goodwill impairment charge of $51 in the first quarter of 2020. Our testing for the Off-Highway reporting unit indicated that fair value slightly exceeded carrying value and, accordingly, no impairment charge was required. The reduction in fair values, and the corresponding impairment charges, were primarily driven by the negative effect of the COVID-19 pandemic on each reporting unit’s near-term cash flows. The remaining balance of goodwill for the Commercial Vehicle and Off-Highway reporting units continues to be at risk for impairment. A prolonged shutdown due to COVID-19 or a significant reduction in demand caused by decreased consumer confidence and spending following the pandemic may result in the need to recognize an additional impairment charge in the Commercial Vehicle or Off-Highway reporting units. The remaining change in the carrying amount of goodwill in 2020 is primarily due to the acquisition of Ashwoods and currency fluctuation. See Note 2 for additional information on recent acquisitions. Changes in the carrying amount of goodwill by segment —
|  | Light Vehicle |  |  | Commercial Vehicle |  |  | Off-Highway |  |  | Power Technologies |  |  | Total |
Balance, December 31, 2019 |  | $ | 3 |  |  | $ | 228 |  |  | $ | 262 |  |  | $ | — |  |  | $ | 493 |
Acquisitions |  |  |  |  |  |  | 2 |  |  |  | 23 |  |  |  |  |  |  |  | 25 |
Impairment |  |  | (3 | ) |  |  | (48 | ) |  |  |  |  |  |  |  |  |  |  | (51 | )
Currency impact |  |  |  |  |  |  | (10 | ) |  |  | (6 | ) |  |  |  |  |  |  | (16 | )
Balance, June 30, 2020 |  | $ | — |  |  | $ | 172 |  |  | $ | 279 |  |  | $ | — |  |  | $ | 451 |
Components of other intangible assets —
|  |  |  |  | June 30, 2020 |  |  | December 31, 2019 |
|  | Weighted Average Useful Life (years) |  |  | Gross Carrying Amount |  |  | Accumulated Impairment and Amortization |  |  | Net Carrying Amount |  |  | Gross Carrying Amount |  |  | Accumulated Impairment and Amortization |  |  | Net Carrying Amount |
Amortizable intangible assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Core technology |  | 8 |  |  | $ | 131 |  |  | $ | (95 | ) |  | $ | 36 |  |  | $ | 133 |  |  | $ | (94 | ) |  | $ | 39 |
Trademarks and trade names |  | 13 |  |  |  | 30 |  |  |  | (7 | ) |  |  | 23 |  |  |  | 30 |  |  |  | (6 | ) |  |  | 24 |
Customer relationships |  | 8 |  |  |  | 506 |  |  |  | (412 | ) |  |  | 94 |  |  |  | 509 |  |  |  | (407 | ) |  |  | 102 |
Non-amortizable intangible assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trademarks and trade names |  |  |  |  |  | 75 |  |  |  |  |  |  |  | 75 |  |  |  | 75 |  |  |  |  |  |  |  | 75 |
|  |  |  |  | $ | 742 |  |  | $ | (514 | ) |  | $ | 228 |  |  | $ | 747 |  |  | $ | (507 | ) |  | $ | 240 |
The net carrying amounts of intangible assets, other than goodwill, attributable to each of our operating segments at June 30, 2020 were as follows: Light Vehicle — $24, Commercial Vehicle — $59, Off-Highway — $138 and Power Technologies — $7. Amortization expense related to amortizable intangible assets —
|  | Three Months Ended |  |  | Six Months Ended |
|  | June 30, |  |  | June 30, |
|  | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019 |
Charged to cost of sales |  | $ | 2 |  |  | $ | 1 |  |  | $ | 3 |  |  | $ | 2 |
Charged to amortization of intangibles |  |  | 3 |  |  |  | 4 |  |  |  | 6 |  |  |  | 6 |
Total amortization |  | $ | 5 |  |  | $ | 5 |  |  | $ | 9 |  |  | $ | 8 |
The following table provides the estimated aggregate pre-tax amortization expense related to intangible assets for each of the next five years based on June 30, 2020 exchange rates. Actual amounts may differ from these estimates due to such factors as currency translation, customer turnover, impairments, additional intangible asset acquisitions and other events.
|  | Remainder of 2020 |  |  | 2021 |  |  | 2022 |  |  | 2023 |  |  | 2024 |
Amortization expense |  | $ | 9 |  |  | $ | 17 |  |  | $ | 17 |  |  | $ | 17 |  |  | $ | 17 |

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