JOHNSON CONTROLS INC | 2013 | FY | 3


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.

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