GOODWILL AND INTANGIBLE ASSETS

6 Months Ended

Jun. 30, 2011

14. GOODWILL AND INTANGIBLE ASSETS

Goodwill

The changes in Goodwill during the first six months of 2011 were as follows:

*In millions of dollars*

Balance at December 31, 2010	$	26,152

Foreign exchange translation	$	345
Smaller acquisitions/divestitures, purchase accounting adjustments and other		(11	)
Discontinued operations		(147	)

Balance at March 31, 2011	$	26,339

Foreign exchange translation		292
Smaller acquisitions/divestitures and other		(10	)

Balance at June 30, 2011	$	26,621

During the second quarter of 2011, no goodwill was written off due to impairment and no interim impairment test on goodwill was performed. 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. There were no triggering events present during the second quarter of 2011 for any reporting unit and an interim goodwill impairment test was not required.

While no goodwill was written off during the second quarter of 2011, the Company will continue to monitor the Local Consumer Lending—Cards reporting unit for triggering events in the interim as the goodwill present in this reporting unit may be sensitive to further deterioration because the valuation of the reporting unit is particularly dependent upon economic conditions that affect consumer credit risk and behavior. The fair value as a percentage of allocated book value for Local Consumer Lending—Cards is 120%, based on the results of the goodwill impairment test performed during the third quarter of 2010. Small deterioration in the assumptions used in the valuations, in particular the discount rate, expected recovery, and expected loss rates, could significantly affect Citigroup's impairment evaluation and, hence, results. If the future were to differ adversely from management's best estimate of key economic assumptions, and associated cash flows were to decrease by a small margin, the Company could potentially experience future material impairment charges with respect to the $4,429 million of goodwill remaining in its Local Consumer Lending—Cards reporting unit. Any such charges, by themselves, would not negatively affect the Company's Tier 1 Common, Tier 1 Capital or Total Capital regulatory ratios, its Tangible Common Equity or the Company's liquidity position.

The following tables present the Company's goodwill balances by reporting unit and by segment at June 30, 2011:

*In millions of dollars*

Reporting unit(1)		Goodwill
North America Regional Consumer Banking		$	2,530
EMEA Regional Consumer Banking			355
Asia Regional Consumer Banking			6,303
Latin America Regional Consumer Banking			1,865
Securities and Banking			9,492
Global Transaction Services			1,579
Brokerage and Asset Management			68
Local Consumer Lending—Cards			4,429

	Total	$	26,621

By Segment
Regional Consumer Banking		$	11,053
Institutional Clients Group			11,071
Citi Holdings			4,497

	Total	$	26,621

(1): Local Consumer Lending—Other is excluded from the table as there is no goodwill allocated to such unit.

Intangible Assets

The components of intangible assets as of June 30, 2011 and December 31, 2010 were as follows:

	June 30, 2011						December 31, 2010

*In millions of dollars*	Gross carrying amount		Accumulated amortization		Net carrying amount		Gross carrying amount		Accumulated amortization		Net carrying amount
Purchased credit card relationships	$	7,757	$	5,218	$	2,539	$	7,796	$	5,048	$	2,748
Core deposit intangibles		1,431		989		442		1,442		959		483
Other customer relationships		804		312		492		796		289		507
Present value of future profits		244		123		121		241		114		127
Indefinite-lived intangible assets		581		—		581		550		—		550
Other(1)		4,744		1,783		2,961		4,723		1,634		3,089

Intangible assets (excluding MSRs)	$	15,561	$	8,425	$	7,136	$	15,548	$	8,044	$	7,504
Mortgage servicing rights (MSRs)		4,258		—		4,258		4,554		—		4,554

Total intangible assets	$	19,819	$	8,425	$	11,394	$	20,102	$	8,044	$	12,058

(1): Includes contract-related intangible assets.

The changes in intangible assets during the first six months of 2011 were as follows:

*In millions of dollars*	Net carrying amount at December 31, 2010		Acquisitions/ divestitures		Amortization			Impairments			FX and other(1)		Discontinued Operations			Net carrying amount at June 30, 2011

Purchased credit card relationships	$	2,748	$	6	$	(221	)	$	—		$	6	$	—		$	2,539
Core deposit intangibles		483		—		(49	)		—			8		—			442
Other customer relationships		507		—		(26	)		—			11		—			492
Present value of future profits		127		—		(7	)		—			1		—			121
Indefinite-lived intangible assets		550		—		—			—			31		—			581
Other		3,089		47		(153	)		(16	)		12		(18	)		2,961

Intangible assets (excluding MSRs)	$	7,504	$	53	$	(456	)	$	(16	)	$	69	$	(18	)	$	7,136
Mortgage servicing rights (MSRs)(2)		4,554															4,258

Total intangible assets	$	12,058														$	11,394

(1): Includes foreign exchange translation and purchase accounting adjustments.
(2): See Note 17 to the Consolidated Financial Statements for the roll-forward of MSRs.

- Definition

Discloses 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 or 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. This element may be used as a single block of text to include the entire intangible asset disclosure including data and tables.

+ References+ Details