GOODWILL AND INTANGIBLE ASSETS

6 Months Ended

Jun. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The changes in Goodwill during the first six months of 2014 were as follows:



In millions of dollars
Balance at December 31, 2013	$	25,009
Foreign exchange translation and other	1
Divestitures	(2		)
Balance at March 31, 2014	$	25,008
Foreign exchange translation and other	208
Divestitures	(129		)
Balance at June 30, 2014	25,087

Goodwill is tested for impairment annually during the third quarter at the reporting unit level and between annual tests 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. During the first six months of 2014, an interim impairment test on goodwill was performed and no goodwill was written off due to impairment.

As discussed in Note 3 to the Consolidated Financial Statements, effective January 1, 2014, the businesses within the legacy ICG reporting units, Securities and Banking and Transaction Services, were realigned and aggregated within two new ICG reporting units—Banking and Markets and Securities Services (Markets). The ICG reorganization was identified as a triggering event for purposes of goodwill impairment testing. Consistent with the requirements of ASC 350, goodwill was assessed for impairment as of January 1, 2014. The total goodwill associated with the legacy reporting units was allocated among the component businesses based on their relative fair values, and these allocated goodwill amounts were then re-aggregated based on the new classification within either Banking or Markets reporting units. The fair values of the legacy and new ICG reporting units exceeded their respective carrying values, resulting in no impairment of goodwill. Subsequent to January 1, 2014, goodwill will be allocated to disposals and tested for impairment under Banking and Markets.

Furthermore, during the second quarter of 2014, the Company signed an agreement to sell the Spain consumer business including the entire Citi Holdings—Cards reporting unit. As a result, 100% of the Citi Holdings—Cards goodwill balance was allocated to the sale and transferred to assets held for sale as of June 30, 2014.

There were no other triggering events during the second quarter of 2014 and therefore no additional goodwill impairment test was performed. The fair values of the Company’s reporting units as of the most recent goodwill impairment tests substantially exceeded their carrying values and did not indicate a more likely than not risk of impairment.

The following table shows reporting units with goodwill balances as of June 30, 2014.



In millions of dollars
Reporting Unit⁽¹⁾	Goodwill
North America Global Consumer Banking	$	6,778
EMEA Global Consumer Banking	366
Asia Global Consumer Banking	5,182
Latin America Global Consumer Banking	1,782
Banking	3,915
Markets and Securities Services	7,022
Latin America Retirement Services	42
Citi Holdings—Cards⁽²⁾	—
Total	$	25,087


(1)	Citi Holdings—Other is excluded from the table as there is no goodwill allocated to it.


(2)	Citi Holdings—Cards goodwill of $116 million was reclassified to assets held for sale as of June 30, 2014.

Intangible Assets

The components of intangible assets as of June 30, 2014 and December 31, 2013 were as follows:



	June 30, 2014						December 31, 2013
In millions of dollars	Gross carrying amount		Accumulated amortization		Net carrying amount		Gross carrying amount		Accumulated amortization		Net carrying amount
Purchased credit card relationships	$	7,531	$	6,156	$	1,375	$	7,552	$	6,006	$	1,546
Core deposit intangibles	1,238		1,071		167		1,255		1,052		203
Other customer relationships	705		407		298		675		389		286
Present value of future profits	238		152		86		238		146		92
Indefinite-lived intangible assets	323		—		323		323		—		323
Other⁽¹⁾	5,066		2,613		2,453		5,073		2,467		2,606
Intangible assets (excluding MSRs)	$	15,101	$	10,399	$	4,702	$	15,116	$	10,060	$	5,056
Mortgage servicing rights (MSRs)	2,282		—		2,282		2,718		—		2,718
Total intangible assets	$	17,383	$	10,399	$	6,984	$	17,834	$	10,060	$	7,774


(1)	Includes contract-related intangible assets.

The changes in intangible assets during the six months ended June 30, 2014 were as follows:



	Net carrying amount at												Net carrying amount at
In millions of dollars	December 31, 2013		Acquisitions/ divestitures			Amortization			Impairments		FX and other ⁽¹⁾		June 30, 2014
Purchased credit card relationships	$	1,546	$	(9	)	$	(166	)	$	—	$	4	$	1,375
Core deposit intangibles	203		(6		)	(30		)	—		—		167
Other customer relationships	286		14			(14		)	—		12		298
Present value of future profits	92		—			(6		)	—		—		86
Indefinite-lived intangible assets	323		(2		)	—			—		2		323
Other	2,606		—			(165		)	2		10		2,453
Intangible assets (excluding MSRs)	$	5,056	$	(3	)	$	(381	)	$	2	$	28	$	4,702
Mortgage servicing rights (MSRs) ⁽²⁾	2,718												2,282
Total intangible assets	$	7,774											$	6,984


(1)	Includes foreign exchange translation and purchase accounting adjustments.


(2)	See Note 20 to the Consolidated Financial Statements for the roll-forward of MSRs.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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