GOODWILL AND INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The changes in Goodwill during 2014 and 2013 were as follows:



In millions of dollars
Balance at December 31, 2012	$	25,673
Foreign exchange translation	$	(577	)
Smaller acquisitions/divestitures, purchase accounting adjustments and other	(25		)
Sale of Brazil Credicard	(62		)
Balance at December 31, 2013	$	25,009
Foreign exchange translation and other	$	(1,214	)
Smaller acquisitions/divestitures, purchase accounting adjustments and other	(203		)
Balance at December 31, 2014	$	23,592

The changes in Goodwill by segment during 2014 and 2013 were as follows:



In millions of dollars	Global Consumer Banking			Institutional Clients Group			Citi Holdings			Total
Balance at December 31, 2012	$	14,539		$	10,981		$	153		$	25,673
Goodwill disposed of during 2013 ⁽¹⁾	$	(82	)	$	—		$	—		$	(82	)
Other ⁽²⁾	(472		)	(113		)	3			$	(582	)
Balance at December 31, 2013	$	13,985		$	10,868		$	156		$	25,009
Goodwill disposed of during 2014 ⁽³⁾	$	(86	)	$	(1	)	$	(116	)	$	(203	)
Other ⁽²⁾	(505		)	(711		)	2			$	(1,214	)
Balance at December 31, 2014	$	13,394		$	10,156		$	42		$	23,592


(1)	Primarily related to the sale of Credicard. See Note 2 to the Consolidated Financial Statements.


(2)	Other changes in Goodwill primarily reflect foreign exchange effects on non-dollar-denominated goodwill and purchase accounting adjustments.


(3)	Primarily related to the sale of the Spain consumer operations and the agreement to sell the Japan retail banking business. See Note 2 to the Consolidated Financial Statements.

Goodwill impairment testing is performed at the level below the business segments (referred to as a reporting unit). The Company performed its annual goodwill impairment test as of July 1, 2014 resulting in no impairment for any of the reporting units. The reporting unit structure in 2014 was the same as the reporting unit structure in 2013, except for the effect of the ICG reorganization during the first quarter of 2014 noted below and the sale involving the Citi Holdings—Cards reporting unit during the third quarter of 2014.

Effective January 1, 2014, the businesses within the legacy ICG reporting units, Securities and Banking and Transaction Services, were realigned and aggregated as Banking and Markets and securities services (Markets). An interim goodwill impairment test was performed on the impacted reporting units as of January 1, 2014, resulting in no impairment. Subsequent to January 1, 2014, goodwill was allocated to disposals and tested for impairment under Banking and Markets. Furthermore, on September 22, 2014, Citi sold its consumer operations in Spain, which included the Citi Holdings—Cards reporting unit. As a result, 100% of the Citi Holdings—Cards goodwill balance was allocated to the sale. No other interim goodwill impairment tests were performed during 2014, other than the test performed related to the ICG reorganization discussed above.

No goodwill was deemed impaired in 2014, 2013 and 2012.

The following table shows reporting units with goodwill balances as of December 31, 2014 and the fair value as a percentage of allocated book value as of the annual impairment test.



In millions of dollars
Reporting Unit⁽¹⁾	Fair Value as a % of allocated book value		Goodwill
North America Global Consumer Banking	260	%	$	6,756
EMEA Global Consumer Banking	178		332
Asia Global Consumer Banking	264		4,704
Latin America Global Consumer Banking	214		1,602
Banking	404		3,481
Markets and Securities Services	200		6,675
Latin America Retirement Services	193		42


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

During the fourth quarter of 2014, Citi announced its intention to exit its consumer businesses in 11 markets in Latin America, Asia and EMEA, as well as its consumer finance business in Korea. Citi also announced its intention to exit several non-core transactions businesses within ICG. Effective January 1, 2015, these businesses were transferred to Citi Holdings and aggregated to 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.

Intangible Assets

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



	December 31, 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	$	7,626	$	6,294	$	1,332	$	7,552	$	6,006	$	1,546
Core deposit intangibles	1,153		1,021		132		1,255		1,052		203
Other customer relationships	579		331		248		675		389		286
Present value of future profits	233		154		79		238		146		92
Indefinite-lived intangible assets	290		—		290		323		—		323
Other⁽¹⁾	5,217		2,732		2,485		5,073		2,467		2,606
Intangible assets (excluding MSRs)	$	15,098	$	10,532	$	4,566	$	15,116	$	10,060	$	5,056
Mortgage servicing rights (MSRs) ⁽²⁾	1,845		—		1,845		2,718		—		2,718
Total intangible assets	$	16,943	$	10,532	$	6,411	$	17,834	$	10,060	$	7,774


(1)	Includes contract-related intangible assets.


(2)	For additional information on Citi’s MSRs, including the roll-forward from 2013 to 2014, see Note 22 to the Consolidated Financial Statements.

Intangible assets amortization expense was $756 million, $808 million and $856 million for 2014, 2013 and 2012, respectively. Intangible assets amortization expense is estimated to be $659 million in 2015, $634 million in 2016, $938 million in 2017, $411 million in 2018 and $368 million in 2019.

The changes in intangible assets during the 12 months ended December 31, 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⁾			December 31, 2014
Purchased credit card relationships	$	1,546	$	110		$	(324	)	$	—		$	—		$	1,332
Core deposit intangibles	203		(6		)	(59		)	—			(6		)	132
Other customer relationships	286		14			(28		)	—			(24		)	248
Present value of future profits	92		—			(12		)	—			(1		)	79
Indefinite-lived intangible assets	323		(2		)	—			—			(31		)	290
Other	2,606		157			(333		)	(2		)	57			2,485
Intangible assets (excluding MSRs)	$	5,056	$	273		$	(756	)	$	(2	)	$	(5	)	$	4,566
Mortgage servicing rights (MSRs) ⁽²⁾	2,718														1,845
Total intangible assets	$	7,774													$	6,411


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


(2)	For additional information on Citi’s MSRs, including the roll-forward from 2013 to 2014, see Note 22 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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