US Bank 2014 Annual Report Download - page 113

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NOTE 11 INTANGIBLE ASSETS
Intangible assets consisted of the following:
Estimated
Life(a)
Amortization
Method(b)
Balance
At December 31 (Dollars in Millions) 2014 2013
Goodwill............................................................................... (c) $ 9,389 $ 9,205
Merchant processing contracts ....................................................... 9 years/8 years SL/AC 174 229
Core deposit benefits ................................................................. 22 years/5 years SL/AC 234 135
Mortgage servicing rights ............................................................. (c) 2,338 2,680
Trust relationships .................................................................... 10 years/6 years SL/AC 97 122
Other identified intangibles............................................................ 6 years/5 years SL/AC 319 363
Total ................................................................................ $12,551 $12,734
(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) 2014 2013 2012
Merchant processing contracts ................................................................................. $50 $64 $74
Core deposit benefits ........................................................................................... 38 41 60
Trust relationships.............................................................................................. 27 34 39
Other identified intangibles ..................................................................................... 84 84 101
Total ......................................................................................................... $199 $223 $274
Theestimatedamortizationexpenseforthenextfiveyearsisasfollows:
(Dollars in Millions)
2015 .................................................................................................................................... $169
2016 .................................................................................................................................... 139
2017 .................................................................................................................................... 118
2018 .................................................................................................................................... 97
2019 .................................................................................................................................... 75
The following table reflects the changes in the carrying value of goodwill for the years ended December 31, 2014, 2013 and
2012:
(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,
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
Goodwill acquired............ 43 166 8 – – 217
Other(a) ....................... – – (3) (30) – (33)
Balance at December 31,
2014 ......................... $1,648 $3,680 $1,570 $2,491 $– $9,389
(a) Other changes in goodwill include the effect of foreign exchange translation.
U.S. BANCORP The power of potential
111