10. Goodwill and Specifically Identifiable Intangible Assets
The changes in the carrying amount of goodwill (in millions) by reportable segment were as follows:
|
For the Year Ended December 31, 2013 |
|||||||||||||||
|
Acquisition |
Cumulative |
||||||||||||||
|
Balance |
Impairment |
||||||||||||||
|
as of |
as of |
Balance |
|||||||||||||
|
Beginning- |
Beginning- |
as of End- |
|||||||||||||
|
of-Year |
of-Year |
Impairment |
of-Year |
||||||||||||
|
Annuities |
$ |
1,040 |
$ |
(600) |
$ |
- |
$ |
440 | |||||||
|
Retirement Plan Services |
20 |
- |
- |
20 | |||||||||||
|
Life Insurance |
2,188 | (649) |
- |
1,539 | |||||||||||
|
Group Protection |
274 |
- |
- |
274 | |||||||||||
|
Other Operations – Media |
341 | (341) |
- |
- |
|||||||||||
|
Total goodwill |
$ |
3,863 |
$ |
(1,590) |
$ |
- |
$ |
2,273 | |||||||
|
For the Year Ended December 31, 2012 |
|||||||||||||||
|
Acquisition |
Cumulative |
||||||||||||||
|
Balance |
Impairment |
||||||||||||||
|
as of |
as of |
Balance |
|||||||||||||
|
Beginning- |
Beginning- |
as of End- |
|||||||||||||
|
of-Year |
of-Year |
Impairment |
of-Year |
||||||||||||
|
Annuities |
$ |
1,040 |
$ |
(600) |
$ |
- |
$ |
440 | |||||||
|
Retirement Plan Services |
20 |
- |
- |
20 | |||||||||||
|
Life Insurance |
2,188 | (649) |
- |
1,539 | |||||||||||
|
Group Protection |
274 |
- |
- |
274 | |||||||||||
|
Other Operations – Media |
341 | (341) |
- |
- |
|||||||||||
|
Total goodwill |
$ |
3,863 |
$ |
(1,590) |
$ |
- |
$ |
2,273 | |||||||
We perform a Step 1 goodwill impairment analysis on all of our reporting units at least annually on October 1. To determine the implied fair value for our reporting units, we utilize primarily a discounted cash flow valuation technique (“income approach”), although limited available market data is also considered. In determining the estimated fair value, we consider discounted cash flow calculations, the level of our own share price and assumptions that market participants would make in valuing the reporting unit. This analysis requires us to make judgments about revenues, earnings projections, capital market assumptions and discount rates.
As of October 1, 2013, our Annuities and Retirement Plan Services reporting units passed the Step 1 analysis. Given the Step 1 results, we performed a Step 2 analysis for our Life Insurance and Group Protection reporting units. Based upon our Step 2 analysis for Life Insurance and Group Protection, we determined that there was no impairment due to the implied fair value of goodwill being in excess of the carrying value of goodwill.
As of October 1, 2012, our Annuities, Retirement Plan Services and Group Protection reporting units passed the Step 1 analysis, and although the carrying value of the net assets for Group Protection was within the estimated fair value range, we deemed it prudent to validate the carrying value of goodwill through a Step 2 analysis. Given the Step 1 results, we also performed a Step 2 analysis for our Life Insurance reporting unit. Based upon our Step 2 analysis for Life Insurance and Group Protection, we determined that there was no impairment due to the implied fair value of goodwill being in excess of the carrying value of goodwill.
As of October 1, 2011, our Annuities, Retirement Plan Services and Group Protection reporting units passed the Step 1 analysis, and although the carrying value of the net assets for Group Protection was within the estimated fair value range, we deemed it prudent to validate the carrying value of goodwill through a Step 2 analysis. Given the Step 1 results, we also performed a Step 2 analysis for our Life Insurance and Media reporting units. Based upon our Step 2 analysis for Life Insurance, we recorded a goodwill impairment that was attributable primarily to marketplace dynamics and lower expectations associated with product changes that we have implemented or will implement shortly that we believe will have an unfavorable effect on our sales levels for a period of time. Based upon our Step 2 analysis for Group Protection, we determined that there was no impairment due to the implied fair value of goodwill being in excess of the carrying value of goodwill. Based upon our Step 2 analysis for Media, we recorded a goodwill impairment that was primarily a result of the deterioration in operating environment and outlook for the business.
The gross carrying amounts and accumulated amortization (in millions) for each major specifically identifiable intangible asset class by reportable segment were as follows:
|
As of December 31, 2013 |
As of December 31, 2012 |
|||||||||||||||
|
Gross |
Gross |
|||||||||||||||
|
Carrying |
Accumulated |
Carrying |
Accumulated |
|||||||||||||
|
Amount |
Amortization |
Amount |
Amortization |
|||||||||||||
|
Life Insurance: |
||||||||||||||||
|
Sales force |
$ |
100 |
$ |
31 |
$ |
100 |
$ |
27 | ||||||||
|
Retirement Plan Services: |
||||||||||||||||
|
Mutual fund contract rights (1) |
5 |
- |
5 |
- |
||||||||||||
|
Other Operations: |
||||||||||||||||
|
FCC licenses (1) |
131 |
- |
129 |
- |
||||||||||||
|
Other |
4 | 3 | 4 | 3 | ||||||||||||
|
Total |
$ |
240 |
$ |
34 |
$ |
238 |
$ |
30 | ||||||||
|
(1) |
No amortization recorded as the intangible asset has indefinite life. |
Future estimated amortization of specifically identifiable intangible assets (in millions) as of December 31, 2013, was as follows:
|
2014 |
$ |
4 | |
|
2015 |
4 | ||
|
2016 |
4 | ||
|
2017 |
4 | ||
|
2018 |
4 | ||
|
Thereafter |
50 |