Citibank 2009 Annual Report Download - page 196

186
19. GOODWILL AND INTANGIBLE ASSETS
Goodwill
The changes in Goodwill during 2008 and 2009 were as follows:
In millions of dollars
Balance at December 31, 2007 $41,053
Sale of German retail bank $ (1,047)
Sale of CitiCapital (221)
Sale of Citigroup Global Services Limited (85)
Purchase accounting adjustments—BISYS (184)
Purchase of the remaining shares of Nikko Cordial—net of purchase accounting adjustments 287
Acquisition of Legg Mason Private Portfolio Group 98
Foreign exchange translation (3,116)
Impairment of goodwill (9,568)
Smaller acquisitions, purchase accounting adjustments and other (85)
Balance at December 31, 2008 $27,132
Sale of Smith Barney $ (1,146)
Sale of Nikko Cordial Securities (558)
Sale of Nikko Asset Management (433)
Foreign exchange translation 547
Smaller acquisitions/divestitures, purchase accounting adjustments and other (150)
Balance at December 31, 2009 $25,392
The changes in Goodwill by segment during 2008 and 2009 were as follows:
In millions of dollars
Regional
Consumer
Banking
Institutional
Clients Group Citi Holdings
Corporate/
Other Total
Balance at December 31, 2007 (1) $19,751 $ 9,288 $12,014 $— $41,053
Goodwill acquired during 2008 $ 88 $ 108 $ 1,492 $— $ 1,688
Goodwill disposed of during 2008 — — (1,378) — (1,378)
Goodwill impaired during 2008 (6,547) — (3,021) — (9,568)
Other (1) (4,006) 775 (1,432) — (4,663)
Balance at December 31, 2008 (1) $ 9,286 $10,171 $ 7,675 $— $27,132
Goodwill acquired during 2009 $ — $ — $ — $— $ —
Goodwill disposed of during 2009 — (39) (2,248) — (2,287)
Other (1) 307 225 15 — 547
Balance at December 31, 2009 $ 9,593 $10,357 $ 5,442 $— $25,392
(1) Other changes in Goodwill primarily reflect foreign exchange effects on non-dollar-denominated goodwill, as well as purchase accounting adjustments.
Goodwill impairment testing is performed at a level below the business
segments (referred to as a reporting unit). The changes in the organizational
structure in 2009 resulted in the creation of new reporting segments. As
a result, commencing with the second quarter of 2009, the Company has
identified new reporting units as required under ASC 350, Intangibles—
Goodwill and Other. Goodwill affected by the reorganization has been
reassigned from 10 reporting units to nine, using a fair value approach.
During 2009, goodwill was allocated to disposals and tested for impairment
under the new reporting units. The Company performed goodwill
impairment testing for all reporting units as of April 1, 2009 and July 1, 2009.
Additionally, the Company performed an interim goodwill impairment test
for the Local Consumer Lending—Cards reporting unit as of November 30,
2009. No goodwill was written off due to impairment in 2009.
During 2008, the share prices of financial stocks continued to be very
volatile and were under considerable pressure in sustained turbulent markets.
In this environment, Citigroup’s market capitalization remained below
book value for most of the period and the Company performed goodwill
impairment testing for all reporting units as of February 28, 2008, July 1,
2008 and December 31, 2008. The results of the first step of the impairment
test showed no indication of impairment in any of the reporting units at any
of the periods except December 31, 2008 and, accordingly, the Company
did not perform the second step of the impairment test, except for the test
performed as of December 31, 2008. As of December 31, 2008, there was an
indication of impairment in the North America Consumer Banking, Latin
America Consumer Banking, and Local Consumer Lending—Other
reporting units and, accordingly, the second step of testing was performed on
these reporting units.