Goodwill and Other Intangible Assets

9 Months Ended

Jun. 30, 2014

Goodwill And Intangible Assets Disclosure [Abstract]

F. Goodwill and Other Intangible Assets

Cabot had goodwill balances of $555 million and $502 million at June 30, 2014 and September 30, 2013, respectively. Goodwill of $2 million which was presented under the Advanced Technologies reportable segment as of September 30, 2013 has been reclassified to Assets held for sale in the Company’s Consolidated Balance Sheets for all periods presented as a result of the then pending divestiture of the Security Materials business discussed in Note D. The carrying amount of goodwill attributable to each reportable segment with goodwill balances and the changes in those balances during the period ended June 30, 2014 are as follows:


	Reinforcement Materials		Performance Materials		Purification Solutions		Total
	(Dollars in millions)
Balance at September 30, 2013	$	25	$	11	$	466	$	502
Goodwill acquired⁽¹⁾		51		—		—		51
Foreign currency impact		—		—		2		2

Balance at June 30, 2014	$	76	$	11	$	468	$	555

⁽¹⁾	Goodwill acquired relates to the NHUMO transaction as described in Note C.

Goodwill impairment tests are performed at least annually. The Company performed its last annual impairment assessment as of May 31, 2014 and determined there was no impairment.

Net intangible assets of $2 million which were presented as other intangible assets as of September 30, 2013 have been reclassified to Assets held for sale in the Company’s Consolidated Balance Sheets for all periods presented as a result of the then pending divestiture of the Security Materials business discussed in Note D. The following table provides information regarding the Company’s intangible assets:


	June 30, 2014							September 30, 2013
	Gross Carrying Value		Accumulated Amortization			Net Intangible Assets		Gross Carrying Value		Accumulated Amortization			Net Intangible Assets
	(Dollars in millions)

Intangible assets with finite lives
Developed technology	$	155	$	(15	)	$	140	$	154	$	(9	)	$	145
Customer relationships⁽¹⁾		171		(14	)		157		113		(7	)		106

Total intangible assets, finite lives	$	326	$	(29	)	$	297	$	267	$	(16	)	$	251
Trademarks, indefinite lives		57		—			57		57		—			57

Total intangible assets	$	383	$	(29	)	$	354	$	324	$	(16	)	$	308

⁽¹⁾	The change in the gross carrying value of the Customer relationships intangible asset is primarily due to the NHUMO transaction as described in Note C.

Intangible assets with finite lives are amortized over their estimated useful lives, which range from sixteen to twenty years, with a weighted average amortization period of approximately nineteen years. Amortization expense for the three months ended June 30, 2014 and 2013 was $4 million and is included in Cost of sales and Selling and administrative expenses in the Consolidated Statements of Operations. Amortization expense for the nine months ended June 30, 2014 and 2013 was $13 million and $10 million, respectively, and is included in Cost of sales and Selling and administrative expenses in the Consolidated Statements of Operations. Total amortization expense is estimated to be approximately $17 million each year for the next five fiscal years. Intangible assets with indefinite lives are evaluated for impairment at least annually. The Company performed its last annual impairment assessment as of May 31, 2014, and determined there was no impairment.

- 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+ Details