Goodwill and Other Intangible Assets (Notes)

12 Months Ended

Sep. 30, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Effective July 1, 2017, the Company reorganized the reportable segments within its Building Technologies & Solutions business to align with its new management reporting structure and business activities. Historical information has been revised to reflect the new Building Technologies & Solutions reportable segments. Refer to Note 19, "Segment Information," of the notes to consolidated financial statements for further information.

The changes in the carrying amount of goodwill in each of the Company’s reportable segments for the fiscal years ended September 30, 2017 and 2016 were as follows (in millions):



	September 30, 2015		Business Acquisitions			Business Divestitures			Currency Translation and Other			September 30, 2016
Building Technologies & Solutions
Building Solutions North America	$	930	$	8,829		$	(3	)	$	(22	)	$	9,734
Building Solutions EMEA/LA	195		1,787			—			(1		)	1,981
Building Solutions Asia Pacific	310		968			—			(18		)	1,260
Global Products	1,943		5,038			(16		)	(2		)	6,963
Power Solutions	1,082		—			—			4			1,086
Total	$	4,460	$	16,622		$	(19	)	$	(39	)	$	21,024

	September 30, 2016		Business Acquisitions			Business Divestitures			Currency Translation and Other			September 30, 2017
Building Technologies & Solutions
Building Solutions North America	$	9,734	$	(147	)	$	—		$	50		$	9,637
Building Solutions EMEA/LA	1,981		(37		)	—			68			2,012
Building Solutions Asia Pacific	1,260		(14		)	(2		)	11			1,255
Global Products	6,963		(58		)	(1,267		)	49			5,687
Power Solutions	1,086		—			—			11			1,097
Total	$	21,024	$	(256	)	$	(1,269	)	$	189		$	19,688

In connection with the Tyco Merger, the Company recorded goodwill of $16,105 million based on the final purchase price allocation. Refer to Note 2, "Merger Transaction," of the notes to consolidated financial statements for additional information.

The fiscal 2017 Global Products business divestiture amount includes $1,248 million of goodwill transferred to noncurrent assets held for sale on the consolidated statements of financial position for the sale of the Scott Safety business. Refer to Note 4, "Discontinued Operations," of the notes to consolidated financial statements for further information regarding the Company's assets and liabilities held for sale.

At September 30, 2015, accumulated goodwill impairment charges included $47 million related to the Building Solutions EMEA/LA - Latin America reporting unit.

At July 1, 2017, the Company assessed goodwill for impairment in the Building Technologies & Solutions business due to the change in reportable segments as described in Note 19, "Segment Information," of the notes to consolidated financial statements. The Company determined that the estimated fair value of each reporting unit exceeded its corresponding carrying amount including recorded goodwill, and as such, no impairment existed at July 1, 2017.

There were no goodwill impairments resulting from fiscal 2017 and 2016 annual impairment tests. With the exception of a Building Solutions North America reporting unit that has goodwill as a result of a recent acquisition and is recorded at fair value, no reporting unit was determined to be at risk of failing step one of the goodwill impairment test. The Company continuously monitors for events and circumstances that could negatively impact the key assumptions in determining fair value, including long-term revenue growth projections, profitability, discount rates, recent market valuations from transactions by comparable companies, volatility in the Company's market capitalization, and general industry, market and macro-economic conditions. It is possible that future changes in such circumstances, or in the variables associated with the judgments, assumptions and estimates used in assessing the fair value of the reporting unit, would require the Company to record a non-cash impairment charge.

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 Company’s other intangible assets, primarily from business acquisitions valued based on independent appraisals, consisted of (in millions):



	September 30, 2017							September 30, 2016
	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
Amortized intangible assets
Technology	$	1,328	$	(137	)	$	1,191	$	1,528	$	(24	)	$	1,504
Customer relationships	3,168		(486		)	2,682		3,168		(226		)	2,942
Miscellaneous	389		(147		)	242		519		(130		)	389
Total amortized intangible assets	4,885		(770		)	4,115		5,215		(380		)	4,835
Unamortized intangible assets
Trademarks/trade names	2,483		—			2,483		2,555		—			2,555
Miscellaneous	143		—			143		150		—			150
	2,626		—			2,626		2,705		—			2,705
Total intangible assets	$	7,511	$	(770	)	$	6,741	$	7,920	$	(380	)	$	7,540

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. Given the recent acquisition, the September 30, 2017 carrying amount of the indefinite-lived intangible assets recorded as a result of the Tyco Merger approximate fair value.

Amortization of other intangible assets included within continuing operations for the fiscal years ended September 30, 2017, 2016 and 2015 was $489 million, $116 million and $74 million, respectively. Excluding the impact of any future acquisitions, the Company anticipates amortization for fiscal 2018, 2019, 2020, 2021 and 2022 will be approximately $375 million, $375 million, $372 million, $369 million and $360 million, respectively. There were no indefinite-lived intangible asset impairments resulting from fiscal 2017, 2016 and 2015 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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