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Goodwill and Intangible Assets, Net
 6 Months Ended
Jun. 30, 2014
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets, Net
Goodwill and Intangible Assets, Net.
Goodwill consists of the following:
 
June 30, 2014
 
December 31, 2013
 
Gross Carrying Amount
 
Accumulated
Impairment
 
Net
Carrying
Value
 
Gross
Carrying
Amount
 
Accumulated
Impairment
 
Net
Carrying
Value
 
(in millions)
Automotive
$
1,395

 
$
(226
)
 
$
1,169

 
$
1,360

 
$
(226
)
 
$
1,134

Energy
930

 
—

 
930

 
930

 
—

 
930

Railcar
7

 
—

 
7

 
7

 
—

 
7

Food Packaging
3

 
—

 
3

 
3

 
—

 
3

 
$
2,335

 
$
(226
)
 
$
2,109

 
$
2,300

 
$
(226
)
 
$
2,074


Intangible assets, net consists of the following:
 
June 30, 2014
 
December 31, 2013
  
Gross Carrying Amount
 
Accumulated
Amortization
 
Net
Carrying
Value
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Value
 
(in millions)
Definite-lived intangible assets:
 
 
 
 
 
 
 
 
 
 
 
Customer relationships
$
965

 
$
(318
)
 
$
647

 
$
914

 
$
(291
)
 
$
623

Developed technology
120

 
(72
)
 
48

 
120

 
(67
)
 
53

In-place leases
121

 
(58
)
 
63

 
121

 
(53
)
 
68

Gasification technology license
60

 
(5
)
 
55

 
60

 
(4
)
 
56

Other
47

 
(18
)
 
29

 
47

 
(18
)
 
29

 
$
1,313

 
$
(471
)
 
$
842

 
$
1,262

 
$
(433
)
 
$
829

Indefinite-lived intangible assets:


 
  

 
  

 
  

 
  

 
  

Trademarks and brand names
 
 
 
 
$
258

 
 
 
 
 
$
255

Gaming licenses
 
 
 
 
40

 
 
 
 
 
29

 
 
 
 
 
298

 
 
 
 
 
284

Intangible assets, net
 
 
 
 
$
1,140

 
 
 
 
 
$
1,113


Amortization expense associated with definite-lived intangible assets for the three months ended June 30, 2014 and 2013 was $20 million and $20 million, respectively, and $40 million and $41 million for the six months ended June 30, 2014 and 2013, respectively. We utilize the straight-line method of amortization, recognized over the estimated useful lives of the assets.
Automotive
During the first quarter of 2014, our Automotive segment acquired Dimitrovgradskiy Zavod Vkladishey, a Russian bearings manufacturer, for $17 million in cash and allocated $8 million to goodwill, $2 million to customer relationships and $2 million to trademarks and brand names.
As further discussed in Note 2, "Operating Units - Automotive," during the second quarter of 2014, our Automotive segment consummated its Affinia Acquisition, recording $27 million in goodwill, $1 million of brand names and $52 million of customer relationships based on fair values as of the acquisition date with the assistance of third party valuation specialists. Fair values were determined using a combination of cost, income and market approaches. The preliminary allocation of the fair value of the assets acquired is subject to additional adjustment to provide Federal-Mogul with adequate time to complete the valuation of its Affinia Acquisition. The Affinia and Lumière (as discussed below) acquisitions are not material to our consolidated financial statements, either individually or in the aggregate.
Energy
We are currently performing the annual goodwill impairment test for our Energy segment which will be finalized during the third quarter of 2014. Based on the preliminary results of our annual goodwill impairment test for our Energy segment, the fair market values of our Energy segment's reporting units are substantially in excess of their carrying values.
Railcar
We perform the annual goodwill impairment test as of March 1 of each year for our Railcar segment. For purposes of goodwill impairment testing, our Railcar segment's manufacturing reporting unit is the only reporting unit with allocated goodwill. We assess qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is greater than its carrying amount. If, however, we had determined that it was more likely than not that the fair value of the reporting unit was less than its carrying amount, then we would perform the first step of the two-step goodwill impairment test. In evaluating whether it is more likely than not that the fair value of the reporting unit is greater than its carrying amount, we considered various qualitative and quantitative factors, including macroeconomic conditions, railcar industry trends and the fact that our Railcar segment's manufacturing reporting unit has historical positive operating cash flows that we anticipate will continue. After assessing these factors, we determined that it was more likely than not the fair value of our Railcar segment's manufacturing reporting unit was greater than its carrying amount, and therefore no further testing was necessary.
Gaming
As discussed in Note 2, "Operating Units - Gaming," on April 1, 2014, Tropicana consummated its previously announced acquisition of Lumière. A preliminary valuation of the assets of Lumière resulted in $252 million allocated to tangible net assets and $11 million allocated to other intangible assets based on the fair values of net assets acquired as of the acquisition date with the assistance of a third party valuation specialist. The preliminary allocation of the fair value of the net assets acquired is subject to additional adjustment to provide Tropicana with adequate time to complete the valuation of its Lumière acquisition. The Affinia (as discussed above) and Lumière acquisitions are not material to our consolidated financial statements, either individually or in the aggregate.
The gaming license is valued based on the Greenfield method, which takes into account the cost to build a new casino operation, build-out period, projected cash flows attributed to the business once operational and a discount rate. The projected cash flows assumed a revenue growth rate of 2.0% and an effective tax rate of 38.1%. The discount rate assumed was 12.0%, based on the weighted average cost of capital plus a premium to reflect the risk of construction costs and timing.