XML 105 R16.htm IDEA: XBRL DOCUMENT
v2.4.1.9

Goodwill and Intangible Assets, Net | 12 Months Ended
--- | ---
Dec. 31, 2014
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net. Goodwill consists of the following:
| December 31, 2014
| Automotive |  | Energy |  | Railcar |  | Food Packaging |  | Consolidated
| (in millions)
Gross carrying amount, January 1 | $ | 1,360 |  |  | $ | 930 |  |  | $ | 7 |  |  | $ | 3 |  |  | $ | 2,300 |
Acquisitions | 32 |  |  | — |  |  | — |  |  | — |  |  | 32 |
Foreign exchange | (3 | ) |  | — |  |  | — |  |  | — |  |  | (3 | )
Gross carrying amount, December 31 | 1,389 |  |  | 930 |  |  | 7 |  |  | 3 |  |  | 2,329 |
Accumulated impairment, January 1 | (226 | ) |  | — |  |  | — |  |  | — |  |  | (226 | )
Impairment | — |  |  | (103 | ) |  | — |  |  | — |  |  | (103 | )
Accumulated impairment, December 31 | (226 | ) |  | (103 | ) |  | — |  |  | — |  |  | (329 | )
Net carrying value, December 31 | $ | 1,163 |  |  | $ | 827 |  |  | $ | 7 |  |  | $ | 3 |  |  | $ | 2,000 |
| December 31, 2013
| Automotive |  | Energy |  | Railcar |  | Food Packaging |  | Consolidated
| (in millions)
Gross carrying amount, January 1 | $ | 1,368 |  |  | $ | 930 |  |  | $ | 7 |  |  | $ | 3 |  |  | $ | 2,308 |
Adjustment to step-up value | 8 |  |  | — |  |  | — |  |  | — |  |  | 8 |
Foreign exchange | (16 | ) |  | — |  |  | — |  |  | — |  |  | (16 | )
Gross carrying amount, December 31 | 1,360 |  |  | 930 |  |  | 7 |  |  | 3 |  |  | 2,300 |
Accumulated impairment, January 1 | (226 | ) |  | — |  |  | — |  |  | — |  |  | (226 | )
Impairment | — |  |  | — |  |  | — |  |  | — |  |  | — |
Accumulated impairment, December 31 | (226 | ) |  | — |  |  | — |  |  | — |  |  | (226 | )
Net carrying value, December 31 | $ | 1,134 |  |  | $ | 930 |  |  | $ | 7 |  |  | $ | 3 |  |  | $ | 2,074 |
Intangible assets, net consists of the following:
| December 31, 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 | $ | 957 |  |  | $ | (345 | ) |  | $ | 612 |  |  | $ | 914 |  |  | $ | (291 | ) |  | $ | 623 |
Developed technology | 120 |  |  | (77 | ) |  | 43 |  |  | 120 |  |  | (67 | ) |  | 53 |
In-place leases | 121 |  |  | (63 | ) |  | 58 |  |  | 121 |  |  | (53 | ) |  | 68 |
Gasification technology license | 60 |  |  | (7 | ) |  | 53 |  |  | 60 |  |  | (4 | ) |  | 56 |
Other | 47 |  |  | (20 | ) |  | 27 |  |  | 47 |  |  | (18 | ) |  | 29 |
| $ | 1,305 |  |  | $ | (512 | ) |  | 793 |  |  | $ | 1,262 |  |  | $ | (433 | ) |  | 829 |
Indefinite-lived intangible assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trademarks and brand names |  |  |  |  | 257 |  |  |  |  |  |  | 255 |
Gaming licenses |  |  |  |  | 38 |  |  |  |  |  |  | 29 |
|  |  |  |  | 295 |  |  |  |  |  |  | 284 |
Intangible assets, net |  |  |  |  | $ | 1,088 |  |  |  |  |  |  | $ | 1,113 |
We recorded amortization expense associated with definite-lived intangible assets for the years ended December 31, 2014, 2013 and 2012 of $83 million, $81 million and $77 million, respectively. We utilize the straight-line method of amortization, recognized over the estimated useful lives of the assets. The estimated future amortization expense for our definite-lived intangible assets is as follows:
Year |  | Amount
|  | (in millions)
2015 |  | $ | 83 |
2016 |  | 81 |
2017 |  | 81 |
2018 |  | 72 |
2019 |  | 71 |
Thereafter |  | 405 |
|  | $ | 793 |
Automotive During the first quarter of 2014, our Automotive segment acquired Dimitrovgradskiy Zavod Vkladishey ("DZV"), a Russian bearings manufacturer, for $15 million net of cash acquired and allocated $6 million to goodwill, $2 million to customer relationships and $1 million to trademarks and brand names. As further discussed in Note 3, "Operating Units - Automotive," during the second quarter of 2014, our Automotive segment consummated its Affinia Acquisition, recording $26 million in goodwill, $1 million of brand names and $51 million of customer relationships based on fair values as of the acquisition date. 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. During the year ended December 31, 2013, we increased our Automotive segment's goodwill by $8 million and decreased definite-lived intangible assets by $3 million to adjust for the purchase price allocation relating to its spark plug business acquisition from BorgWarner, Inc. in June 2012. Additionally, in connection with the various dispositions of our Automotive segment's businesses during the year ended December 31, 2013, we decreased goodwill by $16 million. In addition, in connection with these dispositions, we also decreased definite-lived intangible assets by $2 million and trademarks and brand names by $6 million. Our Automotive segment's reporting unit fair values are based upon consideration of various valuation methodologies, one of which is projecting future cash flows discounted at rates commensurate with the risks involved (“Discounted Cash Flow” or “DCF”). Assumptions used in a DCF require the exercise of significant judgment, including judgment about appropriate discount rates and terminal values, growth rates, and the amount and timing of expected future cash flows. The forecasted cash flows are based on current plans and for years beyond that plan, the estimates are based on assumed growth rates. We believe that our assumptions are consistent with the plans and estimates used to manage the underlying businesses. The discount rates, which are intended to reflect the risks inherent in future cash flow projections, used in a DCF are based on estimates of the weighted-average cost of capital (“WACC”) of a market participant. Such estimates are derived from our analysis of peer companies and consider the industry weighted average return on debt and equity from a market participant perspective. Both of our Automotive reporting units with goodwill passed "Step 1" of our October 1, 2014 goodwill impairment analysis. Powertrain and Motorparts, representing our Automotive segment reporting units, had fair values that were substantially in excess of their carrying values. Based on the results of our "Step 1" goodwill impairment analysis for our Automotive segment, we concluded that no impairment existed and therefore "Step 2" of the goodwill impairment analysis was not necessary. Intangible Assets Based upon certain impairment indicators related to our Automotive segment's friction business during the second quarter of 2012, including lower than expected profits and cash flows due to continued lower aftermarket volumes, further product mix shifts and pressure on margins, our Automotive segment performed a trademarks and brand names impairment analysis in accordance with the subsequent measurement provisions of FASB ASC Topic 350. In addition, in conjunction with our goodwill impairment test that was precipitated by the reorganization as of September 1, 2012, we also performed a trademarks and brand names impairment analysis in accordance with FASB ASC 350, Intangibles-Goodwill and other, as of September 1, 2012. Our impairment analyses compare the fair values of these assets to the related carrying values, and impairment charges are recorded for any excess of carrying values over fair values. These fair values are based upon the prospective stream of hypothetical after-tax royalty cost savings discounted at rates that reflect the rates of return appropriate for these intangible assets. Based upon these analyses, our Automotive segment recognized an aggregate impairment charge of $46 million impairment for the year ended December 31, 2012. Energy Goodwill impairment analysis We perform our annual goodwill impairment analysis as of April 30 of each year for our Energy segment, or more frequently if impairment indicators exist. The first step of the impairment analysis involves comparing the fair values of these assets to the respective carrying values to determine the potential for goodwill impairment. The second step of the impairment test, if necessary, involves quantifying the level of goodwill impairment. The fair values of our Energy segment's reporting units are based upon consideration of various valuation methodologies, including a DCF analysis and pricing multiples of current and future earnings observed for comparable public companies. Assumptions used in a DCF require the exercise of significant judgment, including judgment about appropriate discount rates and terminal values, growth rates, and the amount and timing of expected future cash flows. The forecasted cash flows are based on current plans and for years beyond that plan, the estimates are based on assumed growth rates. We believe that our assumptions are consistent with the plans and estimates used to manage the underlying businesses. The discount rates, which are intended to reflect the risks inherent in future cash flow projections, used in a DCF are based on estimates of the weighted-average cost of capital (“WACC”) of a market participant. Such estimates are derived from our analysis of peer companies and consider the industry weighted average return on debt and equity from a market participant perspective. During the fourth quarter of 2014, based on certain negative trends occurring in the energy markets, particularly with respect to the significant volatility in the oil markets as a result of a drop in forecasted worldwide demand for crude oil supply and inventories, we determined that goodwill impairment indicators existed in both of our Energy segment's Petroleum and Fertilizer reporting units. Accordingly, we performed a "Step 1" goodwill impairment analysis for our Energy segment's reporting units as of December 1, 2014. Our Energy segment’s petroleum reporting unit passed “Step 1” of the goodwill impairment analysis, and therefore, we did not perform “Step 2” of the goodwill impairment analysis for this reporting unit. Because our Energy segment's Fertilizer reporting unit failed "Step 1" of the goodwill impairment analysis, we therefore, performed "Step 2" of the goodwill impairment analysis. Based on "Step 2" results of the goodwill impairment analysis we recognized a preliminary impairment charge of $103 million for our Energy segment's Fertilizer reporting unit for the year ended December 31, 2014. Due to the complexity inherent in the "Step 2" goodwill impairment test, we expect to finalize the assessment of Energy segment's goodwill impairment during the first quarter of 2015 and any resulting difference in the amount of the impairment will be adjusted at that time. Metals Our Metals segment performed its annual impairment review of indefinite-lived intangible assets in the fourth quarter of 2012. Because of the downturn in the scrap metals industry in 2012, along with continued challenging market conditions in the metals industry, our Metals segment determined that all of its goodwill and trade name intangible assets were impaired. As a result, our Metals segment recorded an impairment charge of $18 million during the year ended December 31, 2012. 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 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 manufacturing reporting unit was greater than its carrying amount, and therefore no further testing was necessary. Gaming As discussed in Note 3, "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 $9 million allocated to other intangible assets based on the fair values of net assets acquired as of the acquisition date. 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.

X
- Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16323-109275 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=35741047&loc=d3e13816-109267 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16265-109275 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16373-109275 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=35741047&loc=d3e13854-109267 + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration