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Goodwill and Other Intangible Assets | 12 Months Ended
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Dec. 31, 2018
Goodwill And Intangible Assets Disclosure [Abstract] |
Goodwill and Other Intangible Assets |
9. | Goodwill and Other Intangible Assets
The following table summarizes the changes in the carrying amount of goodwill for the years ended December 31, 2018 and 2017 (dollars in thousands):
|  | Americas |  |  | EMEA |  |  | Asia Pacific |  |  | Global Investment Management |  |  | Development Services |  |  | Total |
Balance as of December 31, 2016: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  | $ | 2,302,929 |  |  | $ | 1,047,295 |  |  | $ | 150,706 |  |  | $ | 462,305 |  |  | $ | 86,663 |  |  | $ | 4,049,898 |
Accumulated impairment losses |  |  | (798,290 | ) |  |  | (138,631 | ) |  |  | — |  |  |  | (44,922 | ) |  |  | (86,663 | ) |  |  | (1,068,506 | )
|  |  | 1,504,639 |  |  |  | 908,664 |  |  |  | 150,706 |  |  |  | 417,383 |  |  |  | — |  |  |  | 2,981,392 |
Purchase accounting entries related to acquisitions |  |  | 104,654 |  |  |  | 17,402 |  |  |  | 4,198 |  |  |  | 17,568 |  |  |  | — |  |  |  | 143,822 |
Foreign exchange movement |  |  | 993 |  |  |  | 91,761 |  |  |  | 11,204 |  |  |  | 25,568 |  |  |  | — |  |  |  | 129,526 |
Balance as of December 31, 2017: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  |  | 2,408,576 |  |  |  | 1,156,458 |  |  |  | 166,108 |  |  |  | 505,441 |  |  |  | 86,663 |  |  |  | 4,323,246 |
Accumulated impairment losses |  |  | (798,290 | ) |  |  | (138,631 | ) |  |  | — |  |  |  | (44,922 | ) |  |  | (86,663 | ) |  |  | (1,068,506 | )
|  |  | 1,610,286 |  |  |  | 1,017,827 |  |  |  | 166,108 |  |  |  | 460,519 |  |  |  | — |  |  |  | 3,254,740 |
Purchase accounting entries related to acquisitions |  |  | 450,380 |  |  |  | 17,838 |  |  |  | 8,096 |  |  |  | (5,110 | ) |  |  | — |  |  |  | 471,204 |
Foreign exchange movement |  |  | (1,623 | ) |  |  | (51,753 | ) |  |  | (8,556 | ) |  |  | (11,703 | ) |  |  | — |  |  |  | (73,635 | )
Balance as of December 31, 2018: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  |  | 2,857,333 |  |  |  | 1,122,543 |  |  |  | 165,648 |  |  |  | 488,628 |  |  |  | 86,663 |  |  |  | 4,720,815 |
Accumulated impairment losses |  |  | (798,290 | ) |  |  | (138,631 | ) |  |  | — |  |  |  | (44,922 | ) |  |  | (86,663 | ) |  |  | (1,068,506 | )
|  | $ | 2,059,043 |  |  | $ | 983,912 |  |  | $ | 165,648 |  |  | $ | 443,706 |  |  | $ | — |  |  | $ | 3,652,309 |
In the second quarter of 2018, we completed the FacilitySource Acquisition (see Note 4). Additionally, during 2018, we acquired a retail leasing and property management firm in Australia, two firms in Israel (our former affiliate and a majority interest in a local facilities management provider), a commercial real estate services provider in San Antonio, a provider of real estate and facilities consulting services to healthcare companies across the United States and the remaining 50% equity interest in our longstanding New England joint venture. During 2017, we completed 11 in-fill acquisitions, including two leading Software as a Service (SaaS) platforms – one that produces scalable interactive visualization technologies for commercial real estate and one that provides technology solutions for facilities management operations, a healthcare-focused project manager in Australia, a full-service brokerage and management boutique in South Florida, a technology-enabled national boutique commercial real estate finance and consulting firm in the United States, a retail consultancy in France, a majority interest in a Toronto-based investment management business specializing in private infrastructure and private equity investments, a San Francisco-based technology-focused boutique real estate brokerage firm, a project management and design engineering firm operating across the United States, a Washington, D.C.-based retail brokerage operation and a leading technical engineering services provider in Italy. Our annual assessment of goodwill and other intangible assets deemed to have indefinite lives has historically been completed as of the beginning of the fourth quarter of each year. We performed the 2018, 2017 and 2016 assessments as of October 1. When we performed our required annual goodwill impairment review as of October 1, 2018, 2017 and 2016, we determined that no impairment existed as the estimated fair value of our reporting units was in excess of their carrying value. Other intangible assets totaled $1.4 billion, net of accumulated amortization of $1.2 billion as of December 31, 2018, and $1.4 billion, net of accumulated amortization of $1.0 billion, as of December 31, 2017 and are comprised of the following (dollars in thousands):
|  | December 31, |
|  | 2018 |  |  | 2017 |
|  | Gross Carrying Amount |  |  | Accumulated Amortization |  |  | Gross Carrying Amount |  |  | Accumulated Amortization |
Unamortizable intangible assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Management contracts |  | $ | 86,585 |  |  |  |  |  |  | $ | 90,503 |  |  |  |  |
Trademarks |  |  | 56,800 |  |  |  |  |  |  |  | 56,800 |  |  |  |  |
Trade names |  |  | 16,250 |  |  |  |  |  |  |  | 16,250 |  |  |  |  |
|  |  | 159,635 |  |  |  |  |  |  |  | 163,553 |  |  |  |  |
Amortizable intangible assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships |  |  | 843,387 |  |  | $ | (435,225 | ) |  |  | 802,597 |  |  | $ | (355,642 | )
Mortgage servicing rights |  |  | 697,322 |  |  |  | (272,852 | ) |  |  | 608,757 |  |  |  | (235,626 | )
Trademarks/Trade name |  |  | 312,699 |  |  |  | (76,514 | ) |  |  | 321,406 |  |  |  | (64,866 | )
Management contracts |  |  | 200,251 |  |  |  | (135,835 | ) |  |  | 203,291 |  |  |  | (122,450 | )
Covenant not to compete |  |  | 73,750 |  |  |  | (73,750 | ) |  |  | 73,750 |  |  |  | (57,358 | )
Other |  |  | 334,657 |  |  |  | (186,217 | ) |  |  | 226,496 |  |  |  | (164,796 | )
|  |  | 2,462,066 |  |  |  | (1,180,393 | ) |  |  | 2,236,297 |  |  |  | (1,000,738 | )
Total intangible assets |  | $ | 2,621,701 |  |  | $ | (1,180,393 | ) |  | $ | 2,399,850 |  |  | $ | (1,000,738 | )
Unamortizable intangible assets include management contracts identified as a result of the REIM Acquisitions relating to relationships with open-end funds, a trademark separately identified as a result of the 2001 Acquisition and a trade name separately identified in connection with the REIM Acquisitions, which represents the Clarion Partners trade name in the U.S. These intangible assets have indefinite useful lives and accordingly are not being amortized. Customer relationships relate to existing relationships acquired through acquisitions mainly in the brokerage, occupier outsourcing and property management lines of business that are being amortized over useful lives of up to 20 years. Mortgage servicing rights represent the carrying value of servicing assets in our mortgage brokerage line of business in the U.S. The mortgage servicing rights are being amortized over the estimated period that net servicing income is expected to be received, which is typically up to ten years. In connection with the GWS Acquisition, trademarks of approximately $280 million were separately identified and are being amortized over 20 years. Management contracts consist primarily of asset management contracts relating to relationships with closed-end funds and separate accounts in the U.S., Europe and Asia that were separately identified as a result of the REIM Acquisitions. These management contracts are being amortized over useful lives of up to 13 years. A covenant not to compete of approximately $74 million was separately identified in connection with the GWS Acquisition and was amortized over three years. Other amortizable intangible assets mainly represent transition costs, which primarily get amortized to cost of services over the life of the associated contract. Amortization expense related to intangible assets was $258.7 million, $238.7 million and $211.7 million for the years ended December 31, 2018, 2017 and 2016, respectively. The estimated annual amortization expense for each of the years ending December 31, 2019 through December 31, 2023 approximates $208.2 million, $182.2 million, $151.4 million, $134.1 million and $119.9 million, respectively.

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