US BANCORP \DE\ | 2013 | FY | 3


NOTE 10   Intangible Assets

Intangible assets consisted of the following:

 

    Estimated     Amortization          Balance  
At December 31 (Dollars in Millions)  

Life (a)

   

Method (b)

          2013      2012  

Goodwill

      (c        $ 9,205       $ 9,143   

Merchant processing contracts

    10 years/8 years        SL/AC             229         281   

Core deposit benefits

    22 years/5 years        SL/AC             135         176   

Mortgage servicing rights

      (c          2,680         1,700   

Trust relationships

    14 years/6 years        SL/AC             122         149   

Other identified intangibles

    9 years/5 years        SL/AC             363         400   

Total

                       $ 12,734       $ 11,849   

 

(a) Estimated life represents the amortization period for assets subject to the straight line method and the weighted average or life of the underlying cash flows amortization period for intangibles subject to accelerated methods. If more than one amortization method is used for a category, the estimated life for each method is calculated and reported separately.

 

(b) Amortization methods:

   SL = straight line method
  

AC= accelerated methods generally based on cash flows

(c) Goodwill is evaluated for impairment, but not amortized. Mortgage servicing rights are recorded at fair value, and are not amortized.

Aggregate amortization expense consisted of the following:

 

Year Ended December 31 (Dollars in Millions)   2013        2012        2011  

Merchant processing contracts

  $ 64         $ 74         $ 90   

Core deposit benefits

    41           60           81   

Trust relationships

    34           39           35   

Other identified intangibles

    84           101           93   

Total

  $ 223         $ 274         $ 299   

The estimated amortization expense for the next five years is as follows:

 

(Dollars in Millions)       

2014

  $ 184   

2015

    148   

2016

    119   

2017

    98   

2018

    78   

The following table reflects the changes in the carrying value of goodwill for the years ended December 31, 2013, 2012 and 2011:

 

(Dollars in Millions)   Wholesale Banking and
Commercial Real Estate
    Consumer and Small
Business Banking
    Wealth Management and
Securities Services
    Payment
Services
    Treasury and
Corporate Support
    Consolidated
Company
 

Balance at December 31, 2010

  $ 1,605      $ 3,535      $ 1,463      $ 2,351      $      $ 8,954   

Other (a)

           (21            (6            (27

Balance at December 31, 2011

  $ 1,605      $ 3,514      $ 1,463      $ 2,345      $      $ 8,927   

Goodwill acquired

                  65        143               208   

Other (a)

                         8               8   

Balance at December 31, 2012

  $ 1,605      $ 3,514      $ 1,528      $ 2,496      $      $ 9,143   

Goodwill acquired

                  37        20               57   

Other (a)

                         5               5   

Balance at December 31, 2013

  $ 1,605      $ 3,514      $ 1,565      $ 2,521      $      $ 9,205   

 

(a) Other changes in goodwill include a reclassification from goodwill to covered loans related to an FDIC-assisted acquisition for Consumer and Small Business Banking and the effect of foreign exchange translation for Payment Services.

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