GOODWILL AND INTANGIBLE ASSETS

Goodwill

The changes in Goodwill were as follows:



In millions of dollars
Balance at December 31, 2014	$	23,592
Foreign exchange translation and other	$	(1,000	)
Divestitures⁽¹⁾	(212		)
Impairment of goodwill⁽²⁾	(31		)
Balance at December 31, 2015	$	22,349
Foreign exchange translation and other	$	(613	)
Divestitures⁽³⁾	(77		)
Balance at December 31, 2016	$	21,659
Foreign exchange translation and other	$	729
Divestitures⁽⁴⁾	(104		)
Impairment of goodwill⁽⁵⁾	(28		)
Balance at December 31, 2017	$	22,256

The changes in Goodwill by segment were as follows:



In millions of dollars	Global Consumer Banking			Institutional Clients Group			Corporate/Other⁽⁶⁾			Total
Balance at December 31, 2015⁽⁷⁾	$	12,704		$	9,545		$	100		$	22,349
Foreign exchange translation and other	$	(174	)	$	(447	)	$	8		$	(613	)
Divestitures⁽³⁾	—			(13		)	(64		)	(77		)
Balance at December 31, 2016	$	12,530		$	9,085		$	44		$	21,659
Foreign exchange translation and other	$	286		$	443		$	—		$	729
Divestitures⁽⁴⁾	(32		)	(72		)	—			(104		)
Impairment of goodwill⁽⁵⁾	—			—			(28		)	(28		)
Balance at December 31, 2017	$	12,784		$	9,456		$	16		$	22,256


(1)	Primarily related to the sales of the Latin America Retirement Services and Japan cards businesses completed in 2015, and agreements to sell certain businesses in Citi Holdings as of December 31, 2015. See Note 2 to the Consolidated Financial Statements.


(2)	Goodwill impairment related to reporting units subsequently sold, including Citi Holdings—Consumer Finance South Korea of $16 million and Citi Holdings—Consumer Latin America of $15 million.


(3)	Primarily related to the sale of the private equity services business completed in 2016 and agreements to sell Argentina and Brazil consumer operations as of December 31, 2016.


(4)	Primarily related to the sale of a fixed income analytics business and a fixed income index business completed in 2017 and an agreement to sell a Mexico asset management business as of December 31, 2017. See Note 2 to the Consolidated Financial Statements.


(5)	Goodwill impairment related to the mortgage servicing business upon transfer from North America GCB to Corporate/Other effective January 1, 2017.


(6)	All Citi Holdings reporting units are presented in Corporate/Other. See Note 3 to the Consolidated Financial Statements.


(7)	December 31, 2015 has been restated to reflect intersegment goodwill allocations that resulted from the reorganizations in 2016 and on January 1, 2017 including transfers of GCB businesses to ICG and to Corporate/Other. See Note 3 to the Consolidated Financial Statements.

Goodwill impairment testing is performed at the level below each business segment (referred to as a reporting unit). The Company performed its annual goodwill impairment test as of July 1, 2017. The fair values of the Company’s reporting units exceeded their carrying values by approximately 32% to 168% and no reporting unit is at risk of impairment, except for Citi Holdings—Consumer Latin America.

Interim impairment tests were performed for Citi Holdings—Consumer Latin America, which is reported as part of Corporate/Other, for all other quarters in 2017. While there is no indication of impairment, each interim impairment test showed that the fair value of Citi Holdings—Consumer Latin America reporting unit, which has $16 million of goodwill, only marginally exceeded its carrying value. The fair value as a percentage of allocated book value as of December 31, 2017 was 111%. Subsequently, on January 31, 2018, Citi executed a definitive agreement to sell the reporting unit and allocated the entire goodwill to the sale, which is expected to result in a pre-tax gain upon closing.

Further, effective January 1, 2017, the mortgage servicing business in North America GCB was reorganized and is now reported as part of Corporate/Other. Goodwill was allocated to the transferred business based on its relative fair value to the legacy North America GCB reporting unit. An interim test was performed under both the legacy and current reporting unit structures, which resulted in full impairment of the $28 million of allocated goodwill upon transfer to Citi Holdings—REL, recorded in Operating expenses in 2017.

Intangible Assets

The components of intangible assets were as follows:



	December 31, 2017						December 31, 2016
In millions of dollars	Gross carrying amount		Accumulated amortization		Net carrying amount		Gross carrying amount		Accumulated amortization		Net carrying amount
Purchased credit card relationships	$	5,375	$	3,836	$	1,539	$	8,215	$	6,549	$	1,666
Credit card contract related intangibles	5,045		2,456		2,589		5,149		2,177		2,972
Core deposit intangibles	639		628		11		801		771		30
Other customer relationships	459		272		187		474		272		202
Present value of future profits	32		28		4		31		27		4
Indefinite-lived intangible assets	244		—		244		210		—		210
Other	100		86		14		504		474		30
Intangible assets (excluding MSRs)	$	11,894	$	7,306	$	4,588	$	15,384	$	10,270	$	5,114
Mortgage servicing rights (MSRs)⁽¹⁾	558		—		558		1,564		—		1,564
Total intangible assets	$	12,452	$	7,306	$	5,146	$	16,948	$	10,270	$	6,678


(1)	In January 2017, Citi signed agreements to effectively exit its U.S. mortgage servicing operations by the end of 2018 and intensify its focus on loan originations. For additional information on these transactions, see Note 2 to the Consolidated Financial Statements.

Intangible assets amortization expense was $603 million, $595 million and $625 million for 2017, 2016 and 2015, respectively. Intangible assets amortization expense is estimated to be $503 million in 2018, $479 million in 2019, $332 million in 2020, $314 million in 2021 and $866 million in 2022.

The changes in intangible assets were as follows:



	Net carrying amount at												Net carrying amount at
In millions of dollars	December 31, 2016		Acquisitions/ divestitures			Amortization			Impairments		FX translation and other		December 31, 2017
Purchased credit card relationships	$	1,666	$	20		$	(149	)	$	—	$	2	$	1,539
Credit card contract-related intangibles⁽¹⁾	2,972		9			(393		)	—		1		2,589
Core deposit intangibles	30		—			(20		)	—		1		11
Other customer relationships	202		—			(24		)	—		9		187
Present value of future profits	4		—			—			—		—		4
Indefinite-lived intangible assets	210		—			—			—		34		244
Other	30		(14		)	(17		)	—		15		14
Intangible assets (excluding MSRs)	$	5,114	$	15		$	(603	)	$	—	$	62	$	4,588
Mortgage servicing rights (MSRs)⁽²⁾	1,564												558
Total intangible assets	$	6,678											$	5,146


(1)	Primarily reflects contract-related intangibles associated with the American Airlines, The Home Depot, Costco, Sears and AT&T credit card program agreements, which represent 97% of the aggregate net carrying amount as of December 31, 2017.


(2)	For additional information on Citi’s MSRs, including the rollforward from 2016 to 2017, see Note 21 to the Consolidated Financial Statements.