Prudential 2012 Annual Report Download - page 150

PRUDENTIAL FINANCIAL, INC.
Notes to Consolidated Financial Statements
8. VALUE OF BUSINESS ACQUIRED (continued)
The following table provides estimated future amortization, net of interest, for the periods indicated.
2013 2014 2015 2016 2017
(in millions)
Estimated future VOBA amortization ............................................... $392 $336 $285 $248 $218
9. GOODWILL AND OTHER INTANGIBLES
The changes in the book value of goodwill by area are as follows:
Asset
Management Retirement
International
Insurance Total
(in millions)
Balance at December 31, 2009:
Gross Goodwill ............................................... $242 $444 $ 23 $709
Accumulated Impairment Losses ................................. 0 0 0 0
Net Goodwill ................................................. 242 444 23 709
2010 Activity:
Other(1) ................................................. (3) 0 1 (2)
Balance at December 31, 2010:
Gross Goodwill ............................................... 239 444 24 707
Accumulated Impairment Losses ................................. 0 0 0 0
Net Goodwill ................................................. 239 444 24 707
2011 Activity:
Acquisitions .............................................. 0 0 184 184
Other(1) ................................................. (1) 0 (2) (3)
Balance at December 31, 2011:
Gross Goodwill ............................................... 238 444 206 888
Accumulated Impairment Losses ................................. 0 0 0 0
Net Goodwill ................................................. 238 444 206 888
2012 Activity:
Other(1) ................................................. 0 0 (15) (15)
Balance at December 31, 2012:
Gross Goodwill ............................................... 238 444 191 873
Accumulated Impairment Losses ................................. 0000
Net Goodwill ................................................. $238 $444 $191 $873
(1) Other represents foreign currency translation and purchase price adjustments.
The Company tests goodwill for impairment annually as of December 31 and more frequently if an event occurs or circumstances change
that would more likely than not reduce the fair value of a reporting unit below its carrying amount, as discussed in further detail in Note 2.
The Company performed goodwill impairment testing for all reporting units that had goodwill at December 31, 2012 and
December 31, 2011 and no impairments were needed.
Other Intangibles
Other intangible balances at December 31, are as follows:
2012 2011
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
(in millions)
Subject to amortization:
Mortgage servicing rights .......................... $358 $(192) $166 $ 320 $(159) $161
Customer relationships ............................ 287 (173) 114 288 (126) 162
Other .......................................... 51 (24) 27 25 (21) 4
Not subject to amortization ............................. N/A N/A 4 N/A N/A 8
Total .......................................... $311 $335
The fair values of net mortgage servicing rights were $170 million and $164 million at December 31, 2012 and 2011, respectively.
Amortization expense for other intangibles was $56 million, $50 million and $45 million for the years ending December 31, 2012, 2011
and 2010, respectively. Amortization expense for other intangibles is expected to be approximately $52 million in 2013, $47 million in
2014, $43 million in 2015, $36 million in 2016 and $29 million in 2017. The amortization expense amounts listed above for 2012, 2011
and 2010 do not include impairments recorded for mortgage servicing rights or other intangibles. See the non-recurring fair value
measurements section of Note 20 for more information regarding these impairments.
148 Prudential Financial, Inc. 2012 Annual Report