Goodwill and Other Intangible Assets (Notes)

12 Months Ended

Sep. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

The changes in the carrying amount of goodwill in each of the Company’s reportable segments for the fiscal years ended September 30, 2016 and 2015 were as follows (in millions):



	September 30, 2014		Business Acquisitions		Business Divestitures			Currency Translation and Other			September 30, 2015
Building Efficiency
Systems and Service North America	$	982	$	—	$	(2	)	$	(2	)	$	978
Products North America	1,688		34		(14		)	(7		)	1,701
Asia	414		—		—			(25		)	389
Rest of World	345		—		—			(35		)	310
Automotive Experience
Seating	2,556		—		(4		)	(188		)	2,364
Interiors	—		9		(9		)	—			—
Power Solutions	1,142		—		—			(60		)	1,082
Total	$	7,127	$	43	$	(29	)	$	(317	)	$	6,824

	September 30, 2015		Business Acquisitions		Business Divestitures			Currency Translation and Other			September 30, 2016
Buildings
Building Efficiency
Systems and Service North America	$	978	$	—	$	(3	)	$	—		$	975
Products North America	1,701		—		(3		)	(1		)	1,697
Asia	389		253		—			15			657
Rest of World	310		5		(13		)	(1		)	301
Tyco	—		16,364		—			(56		)	16,308
Automotive Experience
Seating	2,364		—		—			21			2,385
Power Solutions	1,082		—		—			4			1,086
Total	$	6,824	$	16,622	$	(19	)	$	(18	)	$	23,409

In connection with the Tyco merger, the Company recorded goodwill of $16,363 million based on the preliminary purchase price allocation. Refer to Note 2, "Merger Transaction," of the notes to consolidated financial statements for additional information.

At September 30, 2014, accumulated goodwill impairment charges included $430 million and $47 million related to the Automotive Experience Interiors and Building Efficiency Rest of World - Latin America reporting units, respectively. There were no goodwill impairments resulting from fiscal 2016 and 2015 annual impairment tests. Except for recent acquisitions which are recorded at fair value, no reporting unit was determined to be at risk of failing step one of the goodwill impairment test.

At October 1, 2015, the Company assessed goodwill for impairment in the Building Efficiency business due to the change in reportable segments as described in Note 19, "Segment Information," of the notes to consolidated financial statements. As a result, the Company performed impairment testing for goodwill under the new segments and determined that the estimated fair value of each reporting unit substantially exceeded its corresponding carrying amount including recorded goodwill, and as such, no impairment existed at October 1, 2015. No reporting unit was determined to be at risk of failing step one of the goodwill impairment test.

During fiscal 2014, as a result of operating results, restructuring actions and expected future profitability, the Company's forecasted cash flow estimates used in the goodwill assessment were negatively impacted as of September 30, 2014 for the Building Efficiency Rest of World - Latin America reporting unit. As a result, the Company concluded that the carrying value of the Building Efficiency Rest of World - Latin America reporting unit exceeded its fair value as of September 30, 2014. The Company recorded a goodwill impairment charge of $47 million in the fourth quarter of fiscal 2014, 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 Building Efficiency Rest of World - Latin America reporting unit has no remaining goodwill at September 30, 2016 and 2015.

The assumptions included in the impairment tests require judgment, and changes to these inputs could impact the results of the calculations. Other than management's projections of future cash flows, the primary assumptions used in the impairment tests 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 businesses, there are significant judgments in determining the expected future cash flows attributable to a reporting unit. The impairment charges are non-cash expenses recorded within restructuring and impairment costs on the consolidated statements 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, 2016							September 30, 2015
	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
Amortized intangible assets
Technology	$	1,556	$	(37	)	$	1,519	$	80	$	(59	)	$	21
Customer relationships	3,268		(274		)	2,994		975		(206		)	769
Miscellaneous	590		(155		)	435		307		(123		)	184
Total amortized intangible assets	5,414		(466		)	4,948		1,362		(388		)	974
Unamortized intangible assets
Trademarks/trade names	2,555		—			2,555		542		—			542
Miscellaneous	150		—			150		—		—			—
	2,705		—			2,705		542		—			542
Total intangible assets	$	8,119	$	(466	)	$	7,653	$	1,904	$	(388	)	$	1,516

Refer to Note 2, "Merger Transaction," of the notes to consolidated financial statements for additional information of intangibles recorded as a result of the Tyco merger.

Amortization of intangible assets for the fiscal years ended September 30, 2016, 2015 and 2014 was $133 million, $92 million and $86 million, respectively. Excluding the impact of any future acquisitions, the Company anticipates amortization for fiscal 2017, 2018, 2019, 2020 and 2021 will be approximately $465 million, $440 million, $424 million, $414 million and $405 million, respectively. Excluding the amortization expense of Automotive Experience and the nonrecurring impact of select Tyco intangible assets, the Company expects its fiscal 2017 amortization expense to be $430 million. There were no indefinite lived intangible asset impairments resulting from fiscal 2016, 2015 and 2014 annual impairment tests.

- 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.

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