GOODWILL AND OTHER INTANGIBLE ASSETS
The changes in the carrying amount of goodwill in each of the Company’s reporting segments for the fiscal years ended September 30, 2013 and 2012 were as follows (in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | |
| September 30, 2011 | | Business Acquisitions | | Business Divestitures | | Impairments | | Currency Translation and Other | | September 30, 2012 |
Building Efficiency | | | | | | | | | | | |
North America Systems | $ | 519 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 2 |
| | $ | 521 |
|
North America Service | 710 |
| | — |
| | (2 | ) | | — |
| | — |
| | 708 |
|
Global Workplace Solutions | 184 |
| | — |
| | — |
| | — |
| | 3 |
| | 187 |
|
Asia | 391 |
| | — |
| | — |
| | — |
| | 5 |
| | 396 |
|
Other | 1,065 |
| | — |
| | (32 | ) | | — |
| | (39 | ) | | 994 |
|
Automotive Experience | | | | | | | | | | | |
Seating | 2,505 |
| | 34 |
| | — |
| | — |
| | (55 | ) | | 2,484 |
|
Interiors | 387 |
| | — |
| | — |
| | — |
| | 15 |
| | 402 |
|
Electronics | 251 |
| | — |
| | — |
| | — |
| | (1 | ) | | 250 |
|
Power Solutions | 1,004 |
| | 45 |
| | — |
| | — |
| | (9 | ) | | 1,040 |
|
Total | $ | 7,016 |
| | $ | 79 |
| | $ | (34 | ) | | $ | — |
| | $ | (79 | ) | | $ | 6,982 |
|
| | | | | | | | | | | |
| September 30, 2012 | | Business Acquisitions | | Business Divestitures | | Impairments | | Currency Translation and Other | | September 30, 2013 |
Building Efficiency | | | | | | | | | | | |
North America Systems | $ | 521 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | (1 | ) | | $ | 520 |
|
North America Service | 708 |
| | — |
| | — |
| | — |
| | — |
| | 708 |
|
Global Workplace Solutions | 187 |
| | 79 |
| | — |
| | — |
| | (9 | ) | | 257 |
|
Asia | 396 |
| | — |
| | — |
| | — |
| | (8 | ) | | 388 |
|
Other | 994 |
| | — |
| | — |
| | — |
| | 9 |
| | 1,003 |
|
Automotive Experience | | | | | | | | | | | |
Seating | 2,484 |
| | 187 |
| | (15 | ) | | — |
| | 3 |
| | 2,659 |
|
Interiors | 402 |
| | — |
| | — |
| | (430 | ) | | 28 |
| | — |
|
Electronics | 250 |
| | — |
| | (251 | ) | | — |
| | 1 |
| | — |
|
Power Solutions | 1,040 |
| | — |
| | — |
| | — |
| | 14 |
| | 1,054 |
|
Total | $ | 6,982 |
| | $ | 266 |
| | $ | (266 | ) | | $ | (430 | ) | | $ | 37 |
| | $ | 6,589 |
|
The fiscal 2013 Automotive Experience Electronics business divestitures amount includes $74 million of goodwill transferred to assets held for sale on the consolidated statement of financial position. Refer to Note 3, "Assets and Liabilities Held for Sale," of the notes to consolidated financial statements for further information regarding the Company's disposal groups classified as held for sale.
Based on a combination of factors, including the recent operating results of the Automotive Experience Interiors business, restrictions on future capital and restructuring funding, and the Company's announced intention to explore strategic options related to this business, the Company's forecasted cash flow estimates used in the goodwill assessment were negatively impacted as of September 30, 2013. As a result, the Company concluded that the carrying value of the Interiors reporting unit exceeded its fair value as of September 30, 2013. The Company recorded a goodwill impairment charge of $430 million in the fourth quarter of fiscal 2013, which was determined by comparing the carrying value of the reporting unit's goodwill with the implied fair value of goodwill for the reporting unit. The assumptions included in the impairment test require judgment, and changes to these inputs could impact the results of the calculation. Other than management's internal projections of future cash flows, the primary assumptions used in the impairment test were the weighted-average cost of capital and long-term growth rates. Although the Company's cash flow forecasts are based on assumptions that are considered reasonable by management and consistent with the plans and estimates management is using to operate the underlying business, there is significant judgment in determining the expected future cash flows attributable to the Interiors business. The impairment charge is a non-cash expense that was recorded within restructuring and impairment costs on the consolidated statement of income and did not adversely affect the Company's debt position, cash flow, liquidity or compliance with financial covenants.
The Company’s other intangible assets, primarily from business acquisitions valued based on independent appraisals, consisted of (in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | |
| September 30, 2013 | | September 30, 2012 |
| Gross Carrying Amount | | Accumulated Amortization | | Net | | Gross Carrying Amount | | Accumulated Amortization | | Net |
Amortized intangible assets | | | | | | | | | | | |
Patented technology | $ | 92 |
| | $ | (53 | ) | | $ | 39 |
| | $ | 188 |
| | $ | (113 | ) |
| $ | 75 |
|
Customer relationships | 537 |
| | (138 | ) | | 399 |
| | 517 |
| | (117 | ) | | 400 |
|
Miscellaneous | 336 |
| | (91 | ) | | 245 |
| | 204 |
| | (47 | ) | | 157 |
|
Total amortized intangible assets | 965 |
| | (282 | ) | | 683 |
| | 909 |
| | (277 | ) | | 632 |
|
Unamortized intangible assets | | | | | | | | | | | |
Trademarks | 316 |
| | — |
| | 316 |
| | 315 |
| | — |
| | 315 |
|
Total intangible assets | $ | 1,281 |
| | $ | (282 | ) | | $ | 999 |
| | $ | 1,224 |
| | $ | (277 | ) | | $ | 947 |
|
Amortization of other intangible assets for the fiscal years ended September 30, 2013, 2012 and 2011 was $75 million, $56 million and $53 million, respectively. Excluding the impact of any future acquisitions, the Company anticipates amortization for fiscal 2014, 2015, 2016, 2017 and 2018 will be approximately $73 million, $73 million, $67 million, $62 million and $57 million, respectively.
