Goodwill and Other Intangible Assets, Net

For reporting units with goodwill, we perform goodwill impairment tests on an annual basis on August 1st, or more frequently, if circumstances change or an event occurs that would more likely than not reduce the fair value of a reporting unit below its carrying amount. As part of our impairment analysis for these reporting units, we performed a qualitative assessment or we determined the fair value of the reporting unit based on estimates of its future cash flows.

Changes in the carrying amount of goodwill for each operating segment are as follows:



(in millions)	North America Truck			North America Parts		Global Operations			Total
As of October 31, 2010	$	82		$	38	$	204		$	324
Currency translation	—			—		2			2
Adjustments^(A)	—			—		(7		)	(7		)
As of October 31, 2011	$	82		$	38	$	199		$	319
Currency translation	—			—		(33		)	(33		)
Adjustments^(A)	—			—		(6		)	(6		)
As of October 31, 2012	$	82		$	38	$	160		$	280
Impairments	(81		)	—		—			(81		)
Currency translation	—			—		(12		)	(12		)
Adjustments^(A)	(1		)	—		(2		)	(3		)
As of October 31, 2013	$	—		$	38	$	146		$	184

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(A)	Adjustments to goodwill primarily result from the tax benefit attributable to the amortization of tax deductible goodwill in excess of goodwill recorded for financial statement purposes as measured in the IIAA balance sheet immediately after its acquisition in 2005.

In the fourth quarter of 2013, our North America Truck segment recorded a non-cash charge of $77 million to reflect impairment of goodwill. As a result of certain changes in our organizational and reporting structures, we reviewed the recoverability of our goodwill in the North America truck reporting unit. The income approach, which was based on discounted cash flows was used in the impairment analysis for the reporting unit. The impairment charges were included in Asset impairment charges. In the second quarter of 2013, our North America Truck segment recorded a non-cash charge of $4 million to reflect impairment of goodwill related to the divestiture of Monaco. The impairment charges were included in the Income (loss) from discontinued operations, net of tax.

During 2013, a Brazilian reporting unit with goodwill of $146 million experienced declines in forecasted results and cashflow. As a result of these factors as well as slower than expected growth in the Brazilian economy and a weakening of the Brazilian currency, we performed an impairment analysis in the third and fourth quarters. The income approach, which is based on discounted cash flows which are derived from internal forecasts and economic expectations, was used in the impairment analysis of the reporting unit. As a result of the goodwill impairment analysis, we determined that the goodwill was not impaired and that the fair value of the reporting unit exceeded its carrying amount by less than 10%.

Information regarding our intangible assets that are not subject to amortization as of October 31 is as follows:



(in millions)	2013		2012
Dealer franchise rights	$	1	$	5
Trademarks	45		50
Intangible assets not subject to amortization	$	46	$	55

We had an agreement with a third-party engine manufacturer under which we acquired the rights to certain intellectual property utilized in the production of our MaxxForce 11L and 13L engines for €30 million. During the year ended October 31, 2012, we made the final payment of €9 million (the equivalent of US$12 million at October 31, 2012) to acquire the intellectual property.

Information regarding our intangible assets that are subject to amortization at October 31, 2013 and 2012 is as follows:



	As of October 31, 2013
(in millions)	Customer Base and Relationships			Trademarks, Patents and Other			Total
Gross carrying value	$	88		$	101		$	189
Accumulated amortization	(55		)	(42		)	(97		)
Net of amortization	$	33		$	59		$	92



	As of October 31, 2012
(in millions)	Customer Base and Relationships			Trademarks, Patents and Other			Total
Gross carrying value	$	93		$	101		$	194
Accumulated amortization	(47		)	(31		)	(78		)
Net of amortization	$	46		$	70		$	116

For the year ended October 31, 2012, we recognized $41 million of charges for impairment of intangible assets of which $23 million related to customer base and relationships and $18 million related to trademarks, patents and other. Of this amount, $28 million was recognized in the Loss from discontinued operations, net of tax and $10 million was recognized by the North America Parts segment. For the year ended October 31, 2011, the Company recorded $51 million of charges for impairment of intangible assets, all of which was recognized in the Loss from discontinued operations, net of tax. Of this amount, $26 million of was related to customer base and relationships and $25 million was related to trademarks, patents and other. See Note 3, Restructurings and impairments, for further discussion.

We recorded amortization expense for our finite-lived intangible assets of $22 million, $25 million, and $29 million for the years ended October 31, 2013, 2012, and 2011, respectively. Future estimated amortization expense for our finite-lived intangible assets for the remaining years is as follows:



(in millions)	Estimated Amortization
2014	$	21
2015	16
2016	15
2017	14
2018	9
Thereafter	17