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Fair Value Measurements | 6 Months Ended
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Jun. 30, 2017
Fair Value Disclosures [Abstract] |
Fair Value Measurements |
5. | Fair Value Measurements
The “Fair Value Measurements and Disclosures” topic (Topic 820) of the FASB Accounting Standards Codification defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Topic 820 also establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:
| • | Level 1 – Quoted prices in active markets for identical assets or liabilities.
| • | Level 2 – Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
| • | Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.
There were no significant transfers in or out of Level 1 and Level 2 during the three and six months ended June 30, 2017 and 2016. There have been no significant changes to the valuation techniques and inputs used to develop the recurring fair value measurements from those disclosed in our 2016 Annual Report. The following tables present the fair value of assets and liabilities measured at fair value on a recurring basis as of June 30, 2017 and December 31, 2016 (dollars in thousands):
|  | As of June 30, 2017 |
|  | Fair Value Measured and Recorded Using |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Available for sale securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. treasury securities |  | $ | 7,273 |  |  | $ | — |  |  | $ | — |  |  | $ | 7,273 |
Debt securities issued by U.S. federal agencies |  |  | — |  |  |  | 4,768 |  |  |  | — |  |  |  | 4,768 |
Corporate debt securities |  |  | — |  |  |  | 19,191 |  |  |  | — |  |  |  | 19,191 |
Asset-backed securities |  |  | — |  |  |  | 2,546 |  |  |  | — |  |  |  | 2,546 |
Collateralized mortgage obligations |  |  | — |  |  |  | 2,038 |  |  |  | — |  |  |  | 2,038 |
Total debt securities |  |  | 7,273 |  |  |  | 28,543 |  |  |  | — |  |  |  | 35,816 |
Equity securities |  |  | 26,414 |  |  |  | — |  |  |  | — |  |  |  | 26,414 |
Total available for sale securities |  |  | 33,687 |  |  |  | 28,543 |  |  |  | — |  |  |  | 62,230 |
Trading securities |  |  | 67,907 |  |  |  | — |  |  |  | — |  |  |  | 67,907 |
Warehouse receivables |  |  | — |  |  |  | 1,069,889 |  |  |  | — |  |  |  | 1,069,889 |
Total assets at fair value |  | $ | 101,594 |  |  | $ | 1,098,432 |  |  | $ | — |  |  | $ | 1,200,026 |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swaps |  | $ | — |  |  | $ | 8,569 |  |  | $ | — |  |  | $ | 8,569 |
Securities sold, not yet purchased |  |  | 2,823 |  |  |  | — |  |  |  | — |  |  |  | 2,823 |
Foreign currency exchange forward contracts |  |  | - |  |  |  | 59 |  |  |  | — |  |  |  | 59 |
Total liabilities at fair value |  | $ | 2,823 |  |  | $ | 8,628 |  |  | $ | — |  |  | $ | 11,451 |
|  | As of December 31, 2016 |
|  | Fair Value Measured and Recorded Using |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Available for sale securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. treasury securities |  | $ | 8,485 |  |  | $ | — |  |  | $ | — |  |  | $ | 8,485 |
Debt securities issued by U.S. federal agencies |  |  | — |  |  |  | 5,046 |  |  |  | — |  |  |  | 5,046 |
Corporate debt securities |  |  | — |  |  |  | 17,094 |  |  |  | — |  |  |  | 17,094 |
Asset-backed securities |  |  | — |  |  |  | 2,695 |  |  |  | — |  |  |  | 2,695 |
Collateralized mortgage obligations |  |  | — |  |  |  | 1,010 |  |  |  | — |  |  |  | 1,010 |
Total debt securities |  |  | 8,485 |  |  |  | 25,845 |  |  |  | — |  |  |  | 34,330 |
Equity securities |  |  | 22,744 |  |  |  | — |  |  |  | — |  |  |  | 22,744 |
Total available for sale securities |  |  | 31,229 |  |  |  | 25,845 |  |  |  | — |  |  |  | 57,074 |
Trading securities |  |  | 52,629 |  |  |  | — |  |  |  | — |  |  |  | 52,629 |
Warehouse receivables |  |  | — |  |  |  | 1,276,047 |  |  |  | — |  |  |  | 1,276,047 |
Foreign currency exchange forward contracts |  |  | — |  |  |  | 1,471 |  |  |  | — |  |  |  | 1,471 |
Total assets at fair value |  | $ | 83,858 |  |  | $ | 1,303,363 |  |  | $ | — |  |  | $ | 1,387,221 |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swaps |  | $ | — |  |  | $ | 13,162 |  |  | $ | — |  |  | $ | 13,162 |
Securities sold, not yet purchased |  |  | 3,591 |  |  |  | — |  |  |  | — |  |  |  | 3,591 |
Total liabilities at fair value |  | $ | 3,591 |  |  | $ | 13,162 |  |  | $ | — |  |  | $ | 16,753 |
There were no significant non-recurring fair value measurements recorded during the three and six months ended June 30, 2017 and 2016. FASB ASC Topic 825, “Financial Instruments” requires disclosure of fair value information about financial instruments, whether or not recognized in the accompanying consolidated balance sheets. Our financial instruments are as follows:
| • | Cash and Cash Equivalents and Restricted Cash – These balances include cash and cash equivalents as well as restricted cash with maturities of less than three months. The carrying amount approximates fair value due to the short-term maturities of these instruments.
| • | Receivables, less Allowance for Doubtful Accounts – Due to their short-term nature, fair value approximates carrying value.
| • | Warehouse Receivables – These balances are carried at fair value based on market prices at the balance sheet date.
| • | Trading and Available for Sale Securities – These investments are carried at their fair value.
| • | Foreign Currency Exchange Forward Contracts – These assets and liabilities are carried at their fair value as calculated by using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative.
| • | Securities Sold, not yet Purchased – These liabilities are carried at their fair value.
| • | Short-Term Borrowings – The majority of this balance represents outstanding amounts under our warehouse lines of credit of our wholly-owned subsidiary, CBRE Capital Markets. Due to the short-term nature and variable interest rates of these instruments, fair value approximates carrying value (see Notes 3 and 7).
| • | Senior Term Loans – Based upon information from third-party banks (which falls within Level 2 of the fair value hierarchy), the estimated fair value of our senior term loans was approximately $750.4 million at June 30, 2017 and $751.4 million at December 31, 2016. Their actual carrying value, net of unamortized debt issuance costs, totaled $745.5 million and $744.3 million at June 30, 2017 and December 31, 2016, respectively (see Note 7).
| • | Interest Rate Swaps – These liabilities are carried at their fair value as calculated by using widely-accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative.
| • | Senior Notes – Based on dealers’ quotes (which falls within Level 2 of the fair value hierarchy), the estimated fair values of our 5.00% senior notes, 4.875% senior notes and 5.25% senior notes were $840.4 million, $642.2 million and $465.2 million, respectively, at June 30, 2017 and $827.6 million, $607.0 million and $439.3 million, respectively, at December 31, 2016. The actual carrying value of our 5.00% senior notes, 4.875% senior notes and 5.25% senior notes, net of unamortized debt issuance costs, totaled $791.1 million, $591.6 million and $422.3 million, respectively, at June 30, 2017 and $790.4 million, $591.2 million and $422.2 million, respectively, at December 31, 2016.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -URI http://asc.fasb.org/topic&trid=2155941 + Details
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