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Goodwill and Intangible Assets | 12 Months Ended
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Dec. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Intangible Assets | Note 11. Goodwill and Intangible Assets The following table presents the net carrying amount of goodwill allocated by segment, and changes during 2024:
(In millions) |  | Balance at December 31, 2023 |  |  | Acquisitions |  |  | Divestitures(1) |  |  | Impairment |  |  | Translation |  |  | Balance at December 31, 2024 |
Americas |  | $ | 724 |  |  | $ | — |  |  | $ | (9 | ) |  | $ | — |  |  | $ | — |  |  | $ | 715 |
Asia Pacific |  |  | 57 |  |  |  | — |  |  |  | (13 | ) |  |  | — |  |  |  | (3 | ) |  |  | 41 |
|  | $ | 781 |  |  | $ | — |  |  | $ | (22 | ) |  | $ | — |  |  | $ | (3 | ) |  | $ | 756 |
(1) The amounts reflect the goodwill on assets classified as held for sale due to the sale of the OTR business. The following table presents the net carrying amount of goodwill allocated by segment, and changes during 2023:
(In millions) |  | Balance at December 31, 2022 |  |  | Acquisitions |  |  | Divestitures |  |  | Impairment |  |  | Translation |  |  | Balance at December 31, 2023 |
Americas |  | $ | 724 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 724 |
Europe, Middle East and Africa (1) |  |  | 232 |  |  |  | — |  |  |  | — |  |  |  | (230 | ) |  |  | (2 | ) |  |  | — |
Asia Pacific |  |  | 58 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (1 | ) |  |  | 57 |
|  | $ | 1,014 |  |  | $ | — |  |  | $ | — |  |  | $ | (230 | ) |  | $ | (3 | ) |  | $ | 781 |
(1) The decrease during 2023 was due to the EMEA goodwill impairment. The accumulated amount of impairment recognized against EMEA's goodwill is $412 million. The following table presents information about intangible assets at December 31:
|  | 2024 |  |  | 2023 |
(In millions) |  | Gross Carrying Amount(1) |  |  | Accumulated Amortization /Impairment Charges(1) |  |  | Net Carrying Amount |  |  | Gross Carrying Amount(1) |  |  | Accumulated Amortization /Impairment Charges(1) |  |  | Net Carrying Amount |
Intangible assets with indefinite lives |  | $ | 680 |  |  | $ | (131 | ) |  | $ | 549 |  |  | $ | 687 |  |  | $ | (6 | ) |  | $ | 681 |
Customer relationships |  |  | 350 |  |  |  | (108 | ) |  |  | 242 |  |  |  | 350 |  |  |  | (77 | ) |  |  | 273 |
Other intangible assets |  |  | 30 |  |  |  | (25 | ) |  |  | 5 |  |  |  | 30 |  |  |  | (25 | ) |  |  | 5 |
Trademarks and patents |  |  | 29 |  |  |  | (20 | ) |  |  | 9 |  |  |  | 29 |  |  |  | (19 | ) |  |  | 10 |
|  | $ | 1,089 |  |  | $ | (284 | ) |  | $ | 805 |  |  | $ | 1,096 |  |  | $ | (127 | ) |  | $ | 969 |
(1) Includes impact of foreign currency translation. Intangible assets are primarily comprised of rights to use the Cooper and Dunlop brand names and related trademarks, Cooper Tire customer relationships, and certain other brand names and trademarks. Amortization expense for intangible assets totale d $32 million in 2024, $33 million in 2023, and $35 million in 2022. We estimate that annual amortization expense related to intangible assets will be $31 m illion in 2025, and an average of $29 million in 2026 through 2029. During the third quarter of 2024, we experienced a decline in our market capitalization as a result of a decrease in our stock price. Our stock price has a history of volatility, however, given the decrease was sustained throughout the quarter, we viewed this event as a triggering event and performed a quantitative analysis of the fair value of the North America reporting unit in our Americas segment as of September 30, 2024 which resulted in an estimated fair value that exceeded its carrying value, including goodwill. As part of our annual goodwill impairment analysis as of October 31, 2024, we completed a quantitative impairment analysis at our North America and Asia Pacific reporting units to determine if their fair values were less than their carrying amounts. For both the interim and annual impairment analysis, we determined the estimated fair value for the reporting units based on their discounted cash flow projections. The most critical assumptions used in the calculation of the fair value of each reporting unit are the projected revenue, projected operating margin and discount rate. Based on the quantitative test, the fair values of the North America reporting unit had an estimated fair value that exceeded its carrying value, including goodwill, by approximately 11% and the Asia Pacific reporting unit substantially exceeded its carrying value. The fair value of the North America 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. Although we believe our estimate of fair value is reasonable, the reporting unit’s future financial performance is dependent on our ability to execute our business plan and to successfully implement strategic actions which we expect will improve our long-term operating margin. If a reporting unit’s future financial performance falls below our expectations, there are adverse revisions to significant assumptions, or our market capitalization declines further or does not improve from the strategic actions we are implementing, this could be indicative that the fair values of each of our reporting units has declined below their carrying values, and therefore we may need to record a material, non-cash goodwill impairment charge in a future period. During the third quarter of 2024, we experienced a decline in volumes primarily in our lower tier indefinite-lived intangible assets related to the acquisition of Cooper Tire as a result of increased competition from lower tier imports in the market. We viewed this event as a triggering event and performed a quantitative analysis of the fair value of our indefinite-lived intangible assets related to the acquisition of Cooper Tire as of September 30, 2024. Based on the results of the quantitative impairment assessments, the fair value of the intangible assets was less than the carrying value, resulting in a non-cash impairment charge of $125 million in our Americas SBU during the third quarter of 2024. As part of our annual impairment analysis as of October 31, 2024, we completed a quantitative impairment analysis of our indefinite-lived intangible assets to determine if their fair values were less than their carrying amounts. Based on the results of the quantitative impairment assessments, the Company determined that no impairment was required as the estimated fair values of our indefinite-lived intangible assets exceeded or approximated their respective carrying values. We identified $435 million of indefinite-lived intangible assets related to the Cooper Tire acquisition for which the estimated fair values approximated their respective carrying values. As part of our interim and annual impairment analysis, we determine the fair value of indefinite-lived intangible assets using the relief-from-royalty method, which calculates the cost savings associated with owning rather than licensing the assets. The most critical assumptions used in the calculation of the fair value are projected revenue, discount rate and royalty rate. The fair value of the indefinite-lived intangible assets is sensitive to differences between estimated and actual revenue, including changes in the discount rate and royalty rate used to evaluate the fair value of these assets. Although we believe our estimate of fair value is reasonable, the indefinite-lived intangible asset performance is dependent on our ability to execute our business plan. If our future financial performance falls below our expectations, there are adverse revisions to significant assumptions, including projected revenues, discount rates or royalty rates, this could be indicative that the fair values of these indefinite-lived intangible assets has declined below their carrying values, and therefore we may need to record a material, non-cash impairment charge in a future period. We assessed the period from October 31, 2024 to December 31, 2024 and determined there were no factors that caused us to change our conclusions as of October 31, 2024. Future changes in the judgments, assumptions and estimates that are used in our impairment testing for goodwill and indefinite-lived intangible assets, including discount rates, royalty rates and cash flow projections, could result in significantly different estimates of the fair values. A significant reduction in the estimated fair values could result in additional impairment charges that could adversely affect our results of operations.

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