Citibank 2010 Annual Report Download - page 225

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18. GOODWILL AND INTANGIBLE ASSETS
Goodwill
The changes in Goodwill during 2009 and 2010 were as follows:
In millions of dollars
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
Foreign exchange translation $ 685
Smaller acquisitions/divestitures, purchase accounting adjustments and other 75
Balance at December 31, 2010 $26,152
The changes in Goodwill by segment during 2009 and 2010 were as follows:
In millions of dollars
Regional
Consumer
Banking
Institutional
Clients
Group Citi Holdings
Corporate/
Other Total
Balance at December 31, 2008 $ 9,755 $10,503 $ 6,874 $— $27,132
Goodwill acquired during 2009 $ — — — $— $ —
Goodwill disposed of during 2009 — (39) (2,248) — (2,287)
Other (1) 166 225 156 — 547
Balance at December 31, 2009 $ 9,921 $10,689 $ 4,782 $— $25,392
Goodwill acquired during 2010 $ — $ — $ — $— $ —
Goodwill disposed of during 2010 — — (102) — (102)
Other (1) 780 137 (55) — 862
Balance at December 31, 2010 $10,701 $10,826 $ 4,625 $— $26,152
(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 reporting unit structure in
2010 is consistent with those reporting units identified in the second quarter
of 2009 as a result of the change in organizational structure. During 2010,
goodwill was allocated to disposals and tested for impairment for each of
the reporting units. The Company performed goodwill impairment testing
for all reporting units as of July 1, 2010. Additionally, an interim goodwill
impairment test was performed for the Brokerage and Asset Management
and Local Consumer Lending—Cards reporting units as of May 1, 2010
and May 31, 2010, respectively. No goodwill was written off due to
impairment in 2009 and 2010.
During 2008, the share prices of financial stocks continued to be very
volatile and were under considerable pressure in sustained turbulent markets.
In such an 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. As of December 31, 2008, there was an
indication of impairment in the North America Regional 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.
Based on the results of the second step of testing at December 31, 2008,
the Company recorded a $9.6 billion pretax ($8.7 billion after tax) goodwill
impairment charge in the fourth quarter of 2008, representing most of the
goodwill allocated to these reporting units. The impairment was composed of
a $2.3 billion pretax charge ($2.0 billion after tax) related to North America
Regional Consumer Banking, a $4.3 billion pretax charge ($4.1 billion
after tax) related to Latin America Regional Consumer Banking and a
$3.0 billion pretax charge ($2.6 billion after tax) related to Local Consumer
Lending—Other.