eTrade 2011 Annual Report Download - page 82
Download and view the complete annual report
Please find page 82 of the 2011 eTrade annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.-
1 -
2
-
3
-
4
-
5
-
6
-
7
-
8
-
9
-
10
-
11
-
12
-
13
-
14
-
15
-
16
-
17
-
18
-
19
-
20
-
21
-
22
-
23
-
24
-
25
-
26
-
27
-
28
-
29
-
30
-
31
-
32
-
33
-
34
-
35
-
36
-
37
-
38
-
39
-
40
-
41
-
42
-
43
-
44
-
45
-
46
-
47
-
48
-
49
-
50
-
51
-
52
-
53
-
54
-
55
-
56
-
57
-
58
-
59
-
60
-
61
-
62
-
63
-
64
-
65
-
66
-
67
-
68
-
69
-
70
-
71
-
72 -
73 -
74 -
75 -
76 -
77 -
78 -
79 -
80 -
81 -
82 -
83 -
84 -
85 -
86 -
87 -
88 -
89 -
90 -
91 -
92 -
93
-
94
-
95
-
96
-
97
-
98
-
99
-
100
-
101
-
102
-
103
-
104
-
105
-
106
-
107
-
108
-
109
-
110
-
111
-
112
-
113
-
114
-
115
-
116
-
117
-
118
-
119
-
120
-
121
-
122
-
123
-
124
-
125
-
126
-
127
-
128
-
129
-
130
-
131
-
132
-
133
-
134
-
135
-
136
-
137
-
138
-
139
-
140
-
141
-
142
-
143
-
144
-
145
-
146
-
147
-
148
-
149
-
150
-
151
-
152
-
153
-
154
-
155
-
156
-
157
-
158
-
159
-
160
-
161
-
162
-
163
-
164
-
165
-
166
-
167
-
168
-
169
-
170
-
171
-
172
-
173
-
174
-
175
-
176
-
177
-
178
-
179
-
180
-
181
-
182
-
183
-
184
-
185
-
186
-
187
-
188
-
189
-
190
-
191
-
192
-
193
-
194
-
195
-
196
-
197
-
198
-
199
-
200
-
201
-
202
-
203
-
204
-
205
-
206
-
207
-
208
-
209
-
210
-
211
-
212
-
213
-
214
-
215
-
216
 |
 |
Judgments
The valuation of goodwill and other intangible assets depends on a number of factors, including estimates of
future market growth and trends, forecasted revenue and costs, expected useful lives of the assets, appropriate
discount rates and other variables. Goodwill is allocated to reporting units, which are components of the business
that are one level below operating segments. Each of these reporting units is tested for impairment individually
during the annual evaluation. There is no goodwill assigned to reporting units within the balance sheet
management segment. The following table shows the amount of goodwill allocated to each of the reporting units
in the trading and investing segment (dollars in millions):
Reporting Unit December 31, 2011
U.S. Brokerage $1,751.2
Capital Markets 142.4
Retail Bank 40.6
Total goodwill $1,934.2
In connection with our annual impairment test of goodwill, we concluded that the goodwill was not
impaired as the fair value of the reporting units was in excess of the book value of those reporting units as of
December 31, 2011. The fair value of the reporting units exceeded the book value of those reporting units by
substantial amounts (fair value as a percent of book value ranged from approximately 150% to 700%) and
therefore did not indicate a significant risk of goodwill impairment based on current projections and valuations.
We also evaluate the remaining useful lives on intangible assets each reporting period to determine whether
events and circumstances warrant a revision to the remaining period of amortization.
Effects if Actual Results Differ
If our estimates of fair value for the reporting units change due to changes in our business or other factors,
we may determine that an impairment charge is necessary. Estimates of fair value are determined based on a
complex model using cash flows and company comparisons. If management’s estimates of future cash flows are
inaccurate, the fair value determined could be inaccurate and impairment would not be recognized in a timely
manner. Intangible assets are amortized over their estimated useful lives. If changes in the estimated underlying
revenue occur, impairment or a change in the remaining life may need to be recognized.
79