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Goodwill and Intangible Assets, Net | 12 Months Ended
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Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net. Goodwill consists of the following:
| December 31, 2015
| Automotive |  | Energy |  | Railcar |  | Mining |  | Food Packaging |  | Consolidated
| (in millions)
Gross carrying amount, January 1 | $ | 1,389 |  |  | $ | 930 |  |  | $ | 7 |  |  | $ | — |  |  | $ | 3 |  |  | $ | 2,329 |
Acquisitions | 75 |  |  | — |  |  | — |  |  | 6 |  |  | — |  |  | 81 |
Foreign exchange | (6 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (6 | )
Gross carrying amount, December 31 | 1,458 |  |  | 930 |  |  | 7 |  |  | 6 |  |  | 3 |  |  | 2,404 |
Accumulated impairment, January 1 | (226 | ) |  | (103 | ) |  | — |  |  | — |  |  | — |  |  | (329 | )
Impairment | (312 | ) |  | (253 | ) |  | — |  |  | (6 | ) |  | — |  |  | (571 | )
Accumulated impairment, December 31 | (538 | ) |  | (356 | ) |  | — |  |  | (6 | ) |  | — |  |  | (900 | )
Net carrying value, December 31 | $ | 920 |  |  | $ | 574 |  |  | $ | 7 |  |  | $ | — |  |  | $ | 3 |  |  | $ | 1,504 |
| 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 |
Intangible assets, net consists of the following:
| December 31, 2015 |  | December 31, 2014
| Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Value |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Value
| (in millions)
Definite-lived intangible assets: |  |  |  |  |  |  |  |  |  |  |
Customer relationships | $ | 1,042 |  |  | $ | (409 | ) |  | $ | 633 |  |  | $ | 957 |  |  | $ | (345 | ) |  | $ | 612 |
Developed technology | 144 |  |  | (90 | ) |  | 54 |  |  | 120 |  |  | (77 | ) |  | 43 |
In-place leases | 121 |  |  | (73 | ) |  | 48 |  |  | 121 |  |  | (63 | ) |  | 58 |
Gasification technology license | 60 |  |  | (9 | ) |  | 51 |  |  | 60 |  |  | (7 | ) |  | 53 |
Other | 47 |  |  | (23 | ) |  | 24 |  |  | 47 |  |  | (20 | ) |  | 27 |
| $ | 1,414 |  |  | $ | (604 | ) |  | 810 |  |  | $ | 1,305 |  |  | $ | (512 | ) |  | 793 |
Indefinite-lived intangible assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trademarks and brand names |  |  |  |  | 260 |  |  |  |  |  |  | 257 |
Gaming licenses |  |  |  |  | 38 |  |  |  |  |  |  | 38 |
|  |  |  |  | 298 |  |  |  |  |  |  | 295 |
Intangible assets, net |  |  |  |  | $ | 1,108 |  |  |  |  |  |  | $ | 1,088 |
We recorded amortization expense associated with definite-lived intangible assets for the years ended December 31, 2015, 2014 and 2013 of $92 million, $83 million and $81 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)
2016 |  | $ | 91 |
2017 |  | 90 |
2018 |  | 81 |
2019 |  | 79 |
2020 |  | 78 |
Thereafter |  | 391 |
|  | $ | 810 |
Automotive As discussed in Note 3, "Operating Units - Automotive," during 2015, our Automotive segment consummated its TRW valvetrain business acquisitions. A preliminary valuation of the net assets of the TRW's valvetrain business acquisitions resulted in $209 million allocated to tangible net assets, $74 million to goodwill, $85 million to customer relationships and $22 million to developed technology as of the acquisition date. Because Federal-Mogul is in the process of finalizing certain customary post-closing adjustments, the provisional measurements of net assets are subject to change. The valuation of net assets was performed utilizing cost, income and market approaches. As discussed in Note 3, "Operating Units - Automotive," during 2015, our Automotive segment consummated its acquisition of IEH Auto. A valuation of the net assets of the IEH Auto business acquisition resulted in $331 million allocated to tangible net assets and $2 million allocated to trade names and favorable leases as of the acquisition date. The valuation of net assets was performed utilizing cost, income and market approaches. We perform the annual goodwill impairment test as of October 1 of each year for our Automotive 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. 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. Powertrain and Motorparts are our only Automotive segment reporting units with goodwill allocated to it. While the fair value of our Automotive segment's Powertrain reporting unit was substantially in excess of its carrying value, the Motorparts reporting unit failed "Step 1" of the goodwill impairment analysis. Based on "Step 2" of the goodwill impairment analysis of our Automotive segment's Motorparts reporting unit, we recorded a goodwill impairment charge of $312 million for the year ended December 31, 2015. Due to the complexity in "Step 2" goodwill impairment test, we expect to finalize the assessment of our Automotive segment's goodwill impairment during the first quarter of 2016 and any resulting difference in the amount of the impairment will be adjusted at that time. As discussed above, we recorded a goodwill impairment charge of $312 million for our Automotive segment's Motorparts reporting unit during the year ended December 31, 2015. As a result, there was $349 million of goodwill remaining in our Automotive segment's Motorparts reporting unit at December 31, 2015. Moreover, as a result of our recoverability analysis, there were no indications of impairment related to long-lived assets for our Automotive segment’s Motorparts reporting unit. Energy 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 our Energy segment's assets to their 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 value of our Energy segment's reporting unit is 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 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. We finalized the annual goodwill impairment test for our Energy segment during the third quarter of 2015. Based on the results of our annual goodwill impairment test for our Energy segment, while the fair market value of our Energy segment's Petroleum reporting unit was substantially in excess of its carrying value, the fair market value of our Energy segment's Fertilizer reporting unit was approximately 1% in excess of its carrying value and was therefore considered at risk for failing "Step 1" of the goodwill impairment analysis. Based on worsening sales trends for our Energy segment's Fertilizer reporting unit during the fourth quarter of 2015, we performed an interim goodwill impairment test for our Energy segment's Fertilizer reporting unit during the fourth quarter of 2015. Based on this analysis, our Energy segment recognized a goodwill impairment charge of $253 million, which represented the full amount of the remaining goodwill allocated to this reporting unit. Due to the complexity in "Step 2" goodwill impairment test, we expect to finalize the assessment of our Energy segment's goodwill impairment during the first quarter of 2016 and any resulting difference in the amount of the impairment will be adjusted at that time. In connection with recording a goodwill impairment charge of $253 million, representing the full amount of the remaining goodwill allocated to our Energy segment's Fertilizer reporting unit, we also performed an impairment test for long-lived assets for our Energy segment's fertilizer business, including finite-lived intangible assets, utilizing estimates of undiscounted future cash flows based on the use of the assets for their remaining useful life for our Energy segment's fertilizer business. The impairment test did not result in the impairment of any long-lived assets for the year ended December 31, 2015. 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 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 of the "Step 2" goodwill impairment test, we finalized the assessment of our Energy segment's goodwill impairment during the first quarter of 2015 and noted that no additional adjustments to goodwill were required for the first quarter of 2015. Metals Our Metals segment performed a review of its intangible assets in the fourth quarter of 2015 and recorded an impairment of $2 million related to its supplier and customer relationship intangible assets. Railcar Historically, we have performed the annual goodwill impairment test for our Railcar segment on March 1 of each year; however, we have elected to change this date to November 1 of each year, beginning in 2015. As a result, we performed this assessment as of March 1 and November 1 during 2015. We believe that this change in the goodwill impairment testing date does not represent a material change to its method of applying an accounting principle. For purposes of goodwill impairment testing, ARI 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 the ARI reporting unit was greater than its carrying amount, and therefore no further testing was necessary. Mining As discussed in Note 3, "Operating Units - Mining," during 2015, we acquired Ferrous Resources. A preliminary valuation of the net assets of the Ferrous Resources business acquisition resulted in $356 million allocated to tangible net assets and $6 million allocated to goodwill as of the acquisition date. Because of the complexity inherent in the valuation process, the provisional measurements of net assets acquired are subject to change. The valuation of net assets was performed utilizing cost, income and market approaches. As further discussed in Note 6, "Fair Value Measurements," during the fourth quarter of 2015, there were impairment indicators for our Mining segment, mainly due to decreases in both demand and price of iron ore. As a result, we performed a fair value analysis of our Mining segment's property, plant and equipment as of December 31, 2015. In addition, in conjunction with our fair value analysis of our Mining segment's property, plant and equipment, we noted that our Mining segment's goodwill was also impaired and thus, we recorded a goodwill impairment charge of $6 million. Due to the complexity of these fair value analyses, we expect to finalize the impairment assessments of our Mining segment's property, plant and equipment and goodwill during the first quarter of 2016 and any resulting difference in the amount of the impairment will be adjusted at that time.

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- 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 3 -URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16373-109275 Reference 2: 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 3: 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 4: 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 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
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