GOODWILL AND INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The changes in Goodwill during the nine months ended September 30, 2015 were as follows:



In millions of dollars
Balance at December 31, 2014	$	23,592
Foreign exchange translation and other	(312		)
Impairment of goodwill	(16		)
Divestitures, purchase accounting adjustments and other	(114		)
Balance at March 31, 2015	$	23,150
Foreign exchange translation and other	(123		)
Divestitures, purchase accounting adjustments and other	(15		)
Balance at June 30, 2015	$	23,012
Foreign exchange translation and other	$	(470	)
Impairment of goodwill	(15		)
Divestitures, purchase accounting adjustments and other	(83		)
Balance at September 30, 2015	$	22,444

The goodwill impairment testing process, including the methodology and assumptions used to estimate the fair value of the reporting units, is disclosed in more detail in Note 1 of Citigroup’s 2014 Annual Report on Form 10-K.

As previously discussed in Note 17 of Citigroup’s 2014 Annual Report on Form 10-K, effective January 1, 2015, certain consumer banking and institutional businesses were transferred to Citi Holdings and aggregated to form five new reporting units: Citi Holdings Consumer EMEA, Citi Holdings—Consumer Latin America, Citi Holdings—Consumer Japan, Citi Holdings—Consumer Finance South Korea, and Citi Holdings—ICG. Goodwill balances associated with the transfers were allocated to each of the component businesses based on their relative fair values to the legacy reporting units.

As required by ASC 350, a goodwill impairment test was performed as of January 1, 2015 under the legacy and new reporting structures. The test resulted in full impairment of the new Citi Holdings—Consumer Finance South Korea reporting unit's $16 million of goodwill, which was recorded as an operating expense in the first quarter of 2015. There were no other impairments recorded during the first and second quarters of 2015.

The Company performed its annual goodwill impairment test as of July 1, 2015. The fair values of the Company’s reporting units substantially exceeded their carrying values and did not indicate a risk of impairment based on current valuations, with the exception of Citi Holdings—Consumer Latin America reporting unit.

During the third quarter of 2015, Citi signed definitive agreements to sell most of its businesses in Citi Holdings—Consumer Latin America reporting unit, with allocated goodwill to the sales of $55 million transferred to assets held-for-sale; the remaining $15 million of goodwill was tested for impairment. Due to the deficit of the remaining fair value to book value for this reporting unit, the goodwill of $15 million was taken as an impairment charge. Furthermore, the Company signed definitive agreements to sell all of its remaining businesses in Citi Holdings— Consumer EMEA reporting unit, with the entire goodwill balance of $13 million allocated to the sales and transferred to assets held-for-sale as of September 30, 2015.

The following table shows reporting units with goodwill balances as of September 30, 2015.



In millions of dollars
Reporting Unit⁽¹⁾⁽²⁾	Goodwill
North America Global Consumer Banking	$	6,714
EMEA Global Consumer Banking	299
Asia Global Consumer Banking	4,504
Latin America Global Consumer Banking	1,343
Banking	3,104
Markets and Securities Services	6,480
Total	$	22,444


(1)	Citi Holdings—Other, Citi Holdings—Consumer Finance South Korea and Citi Holdings—ICG are excluded from the table as there is no goodwill allocated to them.


(2)	Citi Holdings—Consumer EMEA, Citi Holdings—Consumer Japan and Citi Holdings—Consumer Latin America are excluded from the table as the remaining goodwill were either impaired or classified as held-for-sale.

Intangible Assets

The components of intangible assets as of September 30, 2015 and December 31, 2014 were as follows:



	September 30, 2015						December 31, 2014
In millions of dollars	Gross carrying amount		Accumulated amortization		Net carrying amount		Gross carrying amount		Accumulated amortization		Net carrying amount
Purchased credit card relationships	$	7,595	$	6,457	$	1,138	$	7,626	$	6,294	$	1,332
Core deposit intangibles	1,058		967		91		1,153		1,021		132
Other customer relationships	478		338		140		579		331		248
Present value of future profits	159		153		6		233		154		79
Indefinite-lived intangible assets	256		—		256		290		—		290
Other⁽¹⁾	5,097		2,848		2,249		5,217		2,732		2,485
Intangible assets (excluding MSRs)	$	14,643	$	10,763	$	3,880	$	15,098	$	10,532	$	4,566
Mortgage servicing rights (MSRs) ⁽²⁾	1,766		—		1,766		1,845		—		1,845
Total intangible assets	$	16,409	$	10,763	$	5,646	$	16,943	$	10,532	$	6,411


(1)	Includes contract-related intangible assets.


(2)	For additional information on Citi’s MSRs, including the roll-forward for the nine months ended September 30, 2015, see Note 20 to the Consolidated Financial Statements.

The changes in intangible assets during the nine months ended September 30, 2015 were as follows:



	Net carrying amount at														Net carrying amount at
In millions of dollars	December 31, 2014		Acquisitions/ divestitures			Amortization			Impairments			FX and other ⁽¹⁾			September 30, 2015
Purchased credit card relationships	$	1,332	$	—		$	(199	)	$	—		$	5		$	1,138
Core deposit intangibles	132		—			(32		)	—			(9		)	91
Other customer relationships	248		(87		)	(18		)	—			(3		)	140
Present value of future profits	79		(68		)	(4		)	—			(1		)	6
Indefinite-lived intangible assets	290		—			—			—			(34		)	256
Other	2,485		(21		)	(226		)	(5		)	16			2,249
Intangible assets (excluding MSRs)	$	4,566	$	(176	)	$	(479	)	$	(5	)	$	(26	)	$	3,880
Mortgage servicing rights (MSRs) ⁽²⁾	1,845														1,766
Total intangible assets	$	6,411													$	5,646


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


(2)	For additional information on Citi’s MSRs, including the roll-forward for the nine months ended September 30, 2015, see Note 20 to the Consolidated Financial Statements.

- 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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