US Bank 2013 Annual Report Download - page 107

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NOTE 10 Intangible Assets
Intangible assets consisted of the following:
Estimated Amortization Balance
At December 31 (Dollars in Millions) Life (a) Method (b) 2013 2012
Goodwill ............................................................................... (c) $ 9,205 $ 9,143
Merchant processing contracts ........................................................ 10 years/8 years SL/AC 229 281
Core deposit benefits .................................................................. 22 years/5 years SL/AC 135 176
Mortgage servicing rights .............................................................. (c) 2,680 1,700
Trust relationships ..................................................................... 14 years/6 years SL/AC 122 149
Other identified intangibles ............................................................ 9 years/5 years SL/AC 363 400
Total ................................................................................. $12,734 $11,849
(a) Estimated life represents the amortization period for assets subject to the straight line method and the weighted average or life of the underlying cash flows amortization period for
intangibles subject to accelerated methods. If more than one amortization method is used for a category, the estimated life for each method is calculated and reported separately.
(b) Amortization methods: SL = straight line method
AC= accelerated methods generally based on cash flows
(c) Goodwill is evaluated for impairment, but not amortized. Mortgage servicing rights are recorded at fair value, and are not amortized.
Aggregate amortization expense consisted of the following:
Year Ended December 31 (Dollars in Millions) 2013 2012 2011
Merchant processing contracts .................................................................................. $64 $74 $90
Core deposit benefits ............................................................................................ 41 60 81
Trust relationships ................................................................................................ 34 39 35
Other identified intangibles ....................................................................................... 84 101 93
Total ........................................................................................................... $223 $274 $299
The estimated amortization expense for the next five years is as follows:
(Dollars in Millions)
2014 ...................................................................................................................................... $184
2015 ...................................................................................................................................... 148
2016 ...................................................................................................................................... 119
2017 ...................................................................................................................................... 98
2018 ...................................................................................................................................... 78
The following table reflects the changes in the carrying value of goodwill for the years ended December 31, 2013, 2012 and
2011:
(Dollars in Millions)
Wholesale Banking and
Commercial Real Estate
Consumer and Small
Business Banking
Wealth Management and
Securities Services
Payment
Services
Treasury and
Corporate Support
Consolidated
Company
Balance at December 31, 2010 ... $1,605 $3,535 $1,463 $2,351 $– $8,954
Other (a) ............................... – (21) – (6) – (27)
Balance at December 31, 2011 ... $1,605 $3,514 $1,463 $2,345 $– $8,927
Goodwill acquired ..................... – – 65 143 – 208
Other (a) ............................... –– –8–8
Balance at December 31, 2012 ... $1,605 $3,514 $1,528 $2,496 $– $9,143
Goodwill acquired ..................... – – 37 20 – 57
Other (a) ............................... –– –5–5
Balance at December 31, 2013 ... $1,605 $3,514 $1,565 $2,521 $– $9,205
(a) Other changes in goodwill include a reclassification from goodwill to covered loans related to an FDIC-assisted acquisition for Consumer and Small Business Banking and the effect of
foreign exchange translation for Payment Services.
U.S. BANCORP 105