Goodwill and intangible assets

3 Months Ended

Mar. 31, 2012

Note 6 – Goodwill and intangible assets

Impairment testing

Goodwill impairment testing is performed at least annually at the reporting unit level. Intangible assets not subject to amortization are tested annually for impairment or more often if events or circumstances indicate they may be impaired.

BNY Mellon’s three business segments include seven reporting units for which goodwill impairment testing is performed on an annual basis, in the second quarter. Although there was no specific event or circumstance in the first quarter of 2012 that would require an interim test, BNY Mellon conducted an additional goodwill impairment analysis of the Asset Management reporting unit. The estimated fair value of the Asset Management reporting unit exceeded its carrying value in the interim test and no goodwill impairment was recognized.

Goodwill

The tables below provide a breakdown of goodwill by business.


Goodwill by business (in millions)	Investment Management			Investment Services			Other		Consolidated
Balance at Dec. 31, 2011	$	9,373		$	8,491		$	40	$	17,904
Foreign exchange translation		59			40			-		99
Other (a)		(1	)		(10	)		10		(1	)
Balance at March 31, 2012	$	9,431		$	8,521		$	50	$	18,002

(a)

Other changes in goodwill include purchase price adjustments and certain other reclassifications.


Goodwill by business (in millions)	Investment Management			Investment Services			Other		Consolidated
Balance at Dec. 31, 2010	$	9,359		$	8,643		$	40	$	18,042
Foreign exchange translation		53			63			-		116
Other (a)		(1	)		(1	)		-		(2	)
Balance at March 31, 2011	$	9,411		$	8,705		$	40	$	18,156

(a)

Other changes in goodwill include purchase price adjustments and certain other reclassifications.

Intangible assets

The tables below provide a breakdown of intangible assets by business.


Intangible assets – net carrying amount by business (in millions)	Investment Management			Investment Services			Other		Consolidated
Balance at Dec. 31, 2011	$	2,382		$	1,922		$	848	$	5,152
Amortization		(48	)		(48	)		-		(96	)
Foreign exchange translation		13			3			-		16
Other (a)		-			(2	)		2		-
Balance at March 31, 2012	$	2,347		$	1,875		$	850	$	5,072

(a)

Other changes in intangible assets include purchase price adjustments and certain other reclassifications.


Intangible assets – net carrying amount by business (in millions)	Investment Management			Investment Services			Other		Consolidated
Balance at Dec. 31, 2010	$	2,592		$	2,254		$	850	$	5,696
Acquisitions		-			12			-		12
Amortization		(55	)		(53	)		-		(108	)
Foreign exchange translation		13			7			-		20
Impairment		-			(3	)		-		(3	)
Balance at March 31, 2011	$	2,550		$	2,217		$	850	$	5,617

The table below provides a breakdown of intangible assets by type.

Intangible assets

March 31, 2012

Dec. 31, 2011

(in millions)

Gross
carrying
amount

Accumulated
amortization

Net
carrying
amount

Remaining
weighted-
average
amortization
period

Net

carrying
amount

Subject to amortization:

Customer relationships - Investment Management

2,104

(1,225

)

879

yrs.

920

Customer contracts - Investment Services

2,354

(880

)

1,474

1,517

Other

132

(99

)

Total subject to amortization

4,590

(2,204

)

2,386

yrs.

2,473

Not subject to amortization: (a)

Trade name

1,368

N/A

1,368

N/A

1,366

Customer relationships

1,318

N/A

1,318

N/A

1,313

Total not subject to amortization

2,686

N/A

2,686

N/A

2,679

Total intangible assets

7,276

(2,204

)

5,072

N/A

5,152

(a)

Intangible assets not subject to amortization have an indefinite life.

N/A - Not applicable.

Estimated annual amortization expense for current intangibles for the next five years is as follows:


For the year ended Dec. 31,	Estimated amortization expense (in millions)
2012	$	384
2013		335
2014		298
2015		267
2016		237

- 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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