Goodwill is the excess of the purchase price over the estimated fair value of identifiable net assets acquired in business combinations. As of March 31, 2026, 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 Battery Energy Systems reportable segment 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 three months ended March 31, 2025, the relative fair value analysis resulted in an allocation, and subsequent impairment, of $13 million related to the goodwill and $22 million related to other intangible assets allocated to the charging business. Refer to Note 3, “Acquisitions and Dispositions,” to the Condensed Consolidated Financial Statements for more information.

As a result of the Company’s annual goodwill and indefinite-lived intangible assets assessment during the fourth quarter of 2025, the Company performed a quantitative impairment assessment of the remaining Battery Energy Systems reportable segment’s goodwill after the impairment of the goodwill associated with the charging business during the first quarter of 2025. The estimated fair value of the Battery Energy Systems business was determined using an income approach. 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. As a result, during the fourth quarter of 2025, the Battery Energy Systems recorded an incremental impairment charge of $410 million. The goodwill impairment charges related to Battery Energy Systems represent the difference between carrying value and fair value, resulting in the carrying value for this reporting unit to approximate its fair value.

The fair value of the goodwill of the Battery Energy Systems reportable segment 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.


(in millions)	Turbos & Thermal Technologies		Drivetrain & Morse Systems		PowerDrive Systems		Battery Energy Systems		Total
Gross goodwill balance, January 1, 2026	$	1,279	$	1,132	$	468	$	678	$	3,557
Accumulated impairment losses, January 1, 2026	(502)		—		(468)		(532)		(1,502)
Net goodwill balance, January 1, 2026	$	777	$	1,132	$	—	$	146	$	2,055
Changes in goodwill during the period:

Other, primarily translation adjustment	(7)		(2)		—		(3)		(12)
Ending balance, March 31, 2026	$	770	$	1,130	$	—	$	143	$	2,043

Gross goodwill balance, March 31, 2026	1,272		1,130		468		675		3,545
Accumulated impairment losses, March 31, 2026	(502)		—		(468)		(532)		(1,502)
Net goodwill balance, March 31, 2026	$	770	$	1,130	$	—	$	143	$	2,043


		March 31, 2026						December 31, 2025
(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	$	335	$	213	$	122	$	338	$	210	$	128
Customer relationships	6 - 15	632		382		250		639		379		260
Miscellaneous	2 - 5	10		9		1		10		8		2
Total amortized intangible assets		977		604		373		987		597		390
Unamortized trade names		4		—		4		4		—		4
Total other intangible assets		$	981	$	604	$	377	$	991	$	597	$	394