PNC Bank 2009 Annual Report Download - page 131

N OTE 9G OODWILL AND O THER I NTANGIBLE A SSETS
Changes in goodwill by business segment during 2008 and 2009 follow:
Changes in Goodwill by Business Segment (a)
In millions
Retail
Banking
Corporate &
Institutional
Banking
Asset
Management
Group
Black-
Rock
Residential
Mortgage
Banking Other (b) Total
January 1, 2008 $4,702 $2,403 $14 $ 57 $1,229 $8,405
Sterling acquisition 517 76 593
Hilliard Lyons divestiture (140) (140)
Harris Williams contingent consideration 44 44
Other acquisitions (23) (2) 4 (21)
BlackRock (13) (13)
December 31, 2008 5,056 2,521 14 44 1,233 8,868
National City acquisition 315 235 54 $43 647
Other acquisitions (2) 10 8
BlackRock (18) (18)
December 31, 2009 $5,369 $2,756 $68 $26 $43 $1,243 $9,505
(a) The Distressed Assets Portfolio business segment does not have any goodwill allocated to it.
(b) Represents goodwill related to GIS.
Changes in goodwill and other intangible assets during 2009
follow:
Summary of Changes in Goodwill and Other Intangible
Assets
In millions Goodwill
Customer-
Related
Servicing
Rights
January 1, 2009 $8,868 $ 930 $1,890
Additions/adjustments:
National City acquisition 647 451 18
Other acquisitions 8
Mortgage and other loan
servicing rights 503
BlackRock (18)
Reversal of prior impairment charge,
net 29
Sale of servicing rights (74)
Amortization (236) (107)
December 31, 2009 $9,505 $1,145 $2,259
We conduct a goodwill impairment test on our reporting units
at least annually or more frequently if any adverse triggering
events occur. Based on the results of our analysis, there were
no impairment charges related to goodwill recognized in 2009,
2008 or 2007. The fair value of our reporting units is
determined by using discounted cash flow and market
comparability methodologies.
Assets and liabilities of acquired entities are recorded at
estimated fair value as of the acquisition date and are subject
to refinement as information relative to the fair values at the
date of acquisition becomes available.
The purchase price allocation for the National City acquisition
was completed as of December 31, 2009 with goodwill of
$647 million recognized.
Our investment in BlackRock changes when BlackRock
repurchases its shares in the open market or issues shares for
an acquisition or pursuant to its employee compensation plans.
We adjust goodwill when BlackRock repurchases its shares at
an amount greater (or less) than book value per share which
results in an increase (or decrease) in our percentage
ownership interest.
The gross carrying amount, accumulated amortization and net
carrying amount of other intangible assets by major category
consisted of the following:
Other Intangible Assets
December 31 - In millions 2009 2008
Customer-related and other intangibles
Gross carrying amount $1,742 $1,291
Accumulated amortization (597) (361)
Net carrying amount $1,145 $ 930
Mortgage and other loan servicing rights
Gross carrying amount $2,729 $2,286
Valuation allowance (35)
Accumulated amortization (470) (361)
Net carrying amount $2,259 $1,890
Total $3,404 $2,820
During 2009, adjustments were made to the estimated fair
values of assets acquired and liabilities assumed as part of the
National City acquisition. This resulted in the recognition of
$451 million of core deposit and other relationship intangibles
at December 31, 2009.
While certain of our other intangible assets have finite lives
and are amortized primarily on a straight-line basis, certain
core deposit intangibles are amortized on an accelerated basis.
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