
4.	BUSINESS COMBINATIONS, GOODWILL AND OTHER INTANGIBLE ASSETS

2017 Business Combinations Activity

During the three months ended March 31, 2017, we completed four new strategic acquisitions, as presented in the table below. These acquisitions reflect continued efforts to grow scale in key regional markets across all business lines.



Acquired Company	Quarter of Acquisition	Country	Primary Service Line
Maloney Field Services	Q1	Australia	Capital Markets & Hotels
Meridian Immobilier SA	Q1	Switzerland	Leasing
Urbis Partners, LLC	Q1	United States	Leasing
Zabel Property AG	Q1	Germany	Capital Markets & Hotels

Aggregate terms of these acquisitions included: (1) cash paid at closing of $20.3 million (exclusive of $5.6 million in cash acquired), (2) guaranteed deferred consideration of $1.8 million subject only to the passage of time, and (3) contingent earn-out consideration of $9.6 million, which we will pay upon satisfaction of certain performance conditions and which we have initially recorded at their respective acquisition date fair value.

A preliminary allocation of purchase consideration resulted in goodwill of $23.0 million, identifiable intangibles of $9.5 million, and other net liabilities (acquired assets less assumed liabilities) of $0.8 million. As of March 31, 2017, we have not completed our analysis to assign fair values to all of the identifiable intangible and tangible assets acquired and, therefore, we may further refine the purchase price allocations for our 2017 acquisitions during their open measurement periods.

During the three months ended March 31, 2017, we paid $10.1 million for deferred business acquisition and earn-out obligations for acquisitions completed in prior years.

2016 Business Combination Activity

During the three months ended March 31, 2017, we made adjustments to our preliminary allocation of the purchase consideration for certain acquisitions completed in 2016. These adjustments resulted in a $3.0 million increase to goodwill, which included a $1.9 million net working capital adjustment payment for a 2016 acquisition. As of March 31, 2017, we have not completed our analysis to assign fair values to all the identifiable intangible and tangible assets acquired and, therefore, we may further refine the purchase price allocations for our 2016 acquisitions with open measurement periods.

Earn-Out Payments

As of March 31, 2017, we had the potential to make a maximum of $442.4 million (undiscounted) in earn-out payments on 56 completed acquisitions, subject to the achievement of certain performance criteria. We accrued $232.8 million, representing the fair value of these obligations as of March 31, 2017, which is included in Short-term earn-out liabilities and Long-term earn-out liabilities within our Condensed Consolidated Balance Sheet. Assuming the achievement of the applicable performance criteria, we anticipate making these earn-out payments over the next six years.

As of December 31, 2016, we had the potential to make a maximum of $435.0 million (undiscounted) in earn-out payments on 52 completed acquisitions, subject to the achievement of certain performance criteria. We accrued $229.6 million, representing the fair value of these obligations as of December 31, 2016. Refer to Note 7, Fair Value Measurements, and Note 10, Restructuring and Acquisition Charges, for additional discussion of our earn-out liabilities.

Goodwill and Other Intangible Assets

Significant portions of our goodwill and unamortized intangibles are denominated in currencies other than the U.S. dollar, which means a portion of the movements in the reported book value of these balances is attributable to movements in foreign currency exchange rates. The tables below detail the foreign exchange impact on our goodwill and intangible balances. Goodwill and unamortized intangibles of $2,932.5 million as of March 31, 2017 consisted of: (1) goodwill of $2,624.3 million, (2) identifiable intangibles of $299.4 million amortized over their remaining finite useful lives, and (3) $8.8 million of identifiable intangibles with indefinite useful lives that are not amortized.

The following tables detail, by reporting segment, movements in goodwill with indefinite useful lives.



	Real Estate Services
(in millions)	Americas		EMEA	Asia Pacific	LaSalle	Consolidated
Balance as of December 31, 2016	$	1,406.1	851.7	306.1	15.4	$	2,579.3
Additions, net of adjustments	2.8		17.7	5.5	—	26.0
Impact of exchange rate movements	0.1		12.2	6.5	0.2	19.0
Balance as of March 31, 2017	$	1,409.0	881.6	318.1	15.6	$	2,624.3



	Real Estate Services
(in millions)	Americas		EMEA		Asia Pacific	LaSalle		Consolidated
Balance as of December 31, 2015	$	1,161.1	696.2		266.6	17.6		$	2,141.5
Additions, net of adjustments	87.4		26.9		4.3	—		118.6
Impact of exchange rate movements	0.8		(2.2	)	5.9	(0.3	)	4.2
Balance as of March 31, 2016	$	1,249.3	720.9		276.8	17.3		$	2,264.3

The following tables detail, by reporting segment, movements in the gross carrying amount and accumulated amortization of our identifiable intangibles.



	MSRs			Other Intangibles
(in millions)	Americas			Americas		EMEA		Asia Pacific		LaSalle		Consolidated
Gross Carrying Amount
Balance as of December 31, 2016	$	193.1		167.1		91.1		24.2		0.1		$	475.6
Additions, net of adjustments⁽¹⁾	20.0			0.2		2.4		6.9		—		29.5
Adjustment for fully amortized intangibles	(3.4		)	(50.0	)	(7.7	)	(8.0	)	(0.1	)	(69.2		)
Impact of exchange rate movements	—			—		1.2		0.6		—		1.8
Balance as of March 31, 2017	$	209.7		117.3		87.0		23.7		—		$	437.7

Accumulated Amortization
Balance as of December 31, 2016	$	(32.3	)	(98.7	)	(38.0	)	(11.5	)	(0.1	)	$	(180.6	)
Amortization, net ⁽²⁾	(9.8		)	(3.5	)	(3.5	)	(0.6	)	—		(17.4		)
Adjustment for fully amortized intangibles	3.4			50.0		7.7		8.0		0.1		69.2
Impact of exchange rate movements	—			0.1		(0.7	)	(0.1	)	—		(0.7		)
Balance as of March 31, 2017	$	(38.7	)	(52.1	)	(34.5	)	(4.2	)	—		$	(129.5	)

Net book value as of March 31, 2017	$	171.0		65.2		52.5		19.5		—		$	308.2

(1) Included in this amount for MSRs was $2.6 million relating to prepayments/write-offs related to prepayments of sold warehouse receivables.

(2) Amortization of MSRs is included in Revenue within the Condensed Consolidated Statements of Comprehensive Income.



	MSRs			Other Intangibles
(in millions)	Americas			Americas		EMEA		Asia Pacific		LaSalle		Consolidated
Gross Carrying Amount
Balance as of December 31, 2015	$	171.6		125.5		48.5		14.3		6.3		$	366.2
Additions, net of adjustments	(1.8		)	14.3		4.5		0.2		—		17.2
Impact of exchange rate movements	—			(0.2	)	(0.8	)	0.4		0.4		(0.2		)
Balance as of March 31, 2016	$	169.8		139.6		52.2		14.9		6.7		$	383.2

Accumulated Amortization
Balance as of December 31, 2015	$	(8.6	)	(88.4	)	(32.6	)	(9.3	)	(0.1	)	$	(139.0	)
Amortization, net⁽¹⁾	(6.0		)	(2.1	)	(2.0	)	(0.4	)	—		(10.5		)
Impact of exchange rate movements	—			0.1		0.8		(0.2	)	—		0.7
Balance as of March 31, 2016	$	(14.6	)	(90.4	)	(33.8	)	(9.9	)	(0.1	)	$	(148.8	)

Net book value as of March 31, 2016	$	155.2		49.2		18.4		5.0		6.6		$	234.4

(1) Amortization of MSRs is included in Revenue within the Condensed Consolidated Statements of Comprehensive Income.

We amortize our identifiable intangible assets with finite lives on a straight-line basis over their estimated useful lives. The remaining estimated future amortization expense of MSRs and other identifiable intangible assets, by year, as of March 31, 2017, is presented in the following table.



(in millions)	MSRs		Other Intangibles	Total
2017 (9 months)	$	22.1	22.5	$	44.6
2018	27.8		24.6	52.4
2019	24.3		22.3	46.6
2020	20.8		19.7	40.5
2021	17.3		13.4	30.7
2022	14.4		13.5	27.9
Thereafter	44.3		12.4	56.7
Total	$	171.0	128.4	$	299.4