Equity Method Investments in Affiliates

The following table presents the change in Equity method investments in Affiliates (net):



	Equity Method Investments in Affiliates (Net)
Balance, as of December 31, 2018	$	2,791.0
Earnings	80.1
Intangible amortization and impairments	(438.2		)
Distributions of earnings	(96.5		)
Foreign currency translation	(16.9		)
Investments in Affiliates	34.1
Divestments of Affiliates	(28.8		)
Other	(6.3		)
Balance, as of March 31, 2019	$	2,318.5

Definite-lived acquired relationships at the Company’s equity method Affiliates are amortized over their expected period of economic benefit. The Company recognized amortization expense for these relationships of $30.0 million and $23.2 million for the three months ended March 31, 2018 and 2019, respectively. Based on relationships existing as of March 31, 2019, the Company estimates the annual amortization expense attributable to its equity method Affiliates will be approximately $90 million in each of 2019 and 2020, and approximately $85 million in each of 2021, 2022 and 2023.

During the three months ended March 31, 2019, the Company recognized a $415.0 million expense to reduce the carrying value of one of its equity method Affiliates to its fair value. A series of precipitating events led the Company to conclude in March 2019 that the growth expectations of a U.S. credit alternative Affiliate of the Company had declined significantly, which the Company determined constituted a triggering event. The Affiliate’s flagship product has underperformed. The cumulative effect of associated redemptions and scaled-down fundraising expectations reduced expected asset and performance based fees and operating margin at the Affiliate. This led to a significant decrease in projected operating cash flows available to fund the Affiliate’s growth strategy, prompting a change in the strategic objectives of the Affiliate, including exiting the systematic equity business and reducing the number of new investment strategies being pursued. The Company determined that the estimated fair value of the Affiliate had declined meaningfully. Therefore, the Company performed a valuation to determine whether the fair value of the Affiliate had declined below its carrying value using a discounted cash flow analysis, a level 3 fair value measurement. The Company assumed projected compounded asset based fee growth over the first five years of (13)%, discount rates of 11% and 20% for asset and performance based fees, respectively, and a market participant tax rate of 25%. Based on the discounted cash flow analysis, the Company concluded that the fair value of its investment had declined below its carrying value and that the decline was other-than-temporary.