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Business Combinations, Goodwill and Other Intangible Assets
 6 Months Ended
Jun. 30, 2018
BUSINESS COMBINATIONS, GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract]  
Business Combinations, Goodwill and Other Intangible Assets
5.
BUSINESS COMBINATIONS, GOODWILL AND OTHER INTANGIBLE ASSETS
2018 Business Combinations Activity
During the six months ended June 30, 2018, we completed three new strategic acquisitions, as presented in the table below. These acquisitions continued to expand our capabilities and increase our presence in key regional markets.
Acquired Company
Quarter of Acquisition
Country
Primary Service Line
Stessa Inc.
Q1
United States
Advisory, Consulting and Other
Raymond Chabot Grant Thornton & Co. LLP
Q1
Canada
Advisory, Consulting and Other
JCL International Inc.
Q1
Philippines
Project & Development Services
Aggregate terms of our acquisitions included: (1) cash paid at closing of $11.2 million and (2) contingent earn-out consideration of $1.7 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 $10.7 million, identifiable intangibles of $2.1 million, and other net assets (acquired assets less assumed liabilities) of $0.1 million. As of June 30, 2018, 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 2018 acquisitions during their open measurement periods.
During the six months ended June 30, 2018, we paid $40.8 million for deferred business acquisition and earn-out obligations for acquisitions completed in prior years. We also paid $1.5 million to acquire the final portion of the redeemable noncontrolling interest related to our 2014 acquisition of Tenzing AB, a Swedish real estate services provider.
2017 Business Combination Activity
During the six months ended June 30, 2018, we made no adjustments to our preliminary allocation of the purchase consideration for certain acquisitions completed in 2017. As of June 30, 2018, we have not completed our analysis to assign fair values to all the identifiable intangible and tangible assets acquired and, therefore, we may further refine the purchase price allocations for our 2017 acquisitions with open measurement periods.
Earn-Out Payments
($ in millions)
June 30, 2018
 
December 31, 2017
Number of acquisitions with earn-out payments subject to the achievement of certain performance criteria
54

 
56

Maximum earn-out payments (undiscounted)
$
393.7

 
436.2

Short-term earn-out liabilities (fair value)1
41.9

 
49.6

Long-term earn-out liabilities (fair value)1
137.7

 
177.5

1 Included in Short-term and Long-term acquisition obligations on the Condensed Consolidated Balance Sheets
Assuming the achievement of the applicable performance criteria, we anticipate making these earn-out payments over the next six years. Refer to Note 8, Fair Value Measurements, and Note 11, Restructuring and Acquisition Charges, for additional discussion of our earn-out liabilities.
Goodwill and Other Intangible Assets
Goodwill and unamortized intangibles as of June 30, 2018 consisted of: (1) goodwill of $2,682.9 million, (2) identifiable intangibles of $284.0 million amortized over their remaining finite useful lives, and (3) $8.8 million of identifiable intangibles with indefinite useful lives that are not amortized. 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 following tables detail, by reporting segment, movements in goodwill.
 
Real Estate Services
 
 
 
(in millions)
Americas
EMEA
Asia Pacific
LaSalle
 
Consolidated
Balance as of December 31, 2017
$
1,412.2

957.6

323.0

16.5

 
$
2,709.3

Additions, net of adjustments
6.9

0.1

1.9

—

 
8.9

Impact of exchange rate movements
(0.8
)
(27.7
)
(6.5
)
(0.3
)
 
(35.3
)
Balance as of June 30, 2018
$
1,418.3

930.0

318.4

16.2

 
$
2,682.9

 
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
4.5

18.2

6.5

—

 
29.2

Impact of exchange rate movements
0.4

52.1

7.2

0.7

 
60.4

Balance as of June 30, 2017
$
1,411.0

922.0

319.8

16.1

 
$
2,668.9


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, 2017
$
241.8

 
117.0

88.8

23.3

—

 
$
470.9

Additions, net of adjustments (1)
24.0

 
0.6

—

1.4

—

 
26.0

Adjustment for fully amortized intangibles
(11.9
)
 
(0.4
)
(1.3
)
(0.7
)
—

 
(14.3
)
Impact of exchange rate movements
—

 
(0.1
)
(1.9
)
(1.5
)
—

 
(3.5
)
Balance as of June 30, 2018
$
253.9

 
117.1

85.6

22.5

—

 
$
479.1

 
 
 
 
 
 
 
 
 
Accumulated Amortization
 
 
 

 

 

 

 
 

Balance as of December 31, 2017
$
(55.1
)
 
(61.3
)
(43.1
)
(6.4
)
—

 
$
(165.9
)
Amortization, net (2)
(22.2
)
 
(6.9
)
(6.4
)
(1.3
)
—

 
(36.8
)
Adjustment for fully amortized intangibles
11.9

 
0.4

1.3

0.7

—

 
14.3

Impact of exchange rate movements
—

 
0.3

0.9

0.9

—

 
2.1

Balance as of June 30, 2018
$
(65.4
)
 
(67.5
)
(47.3
)
(6.1
)
—

 
$
(186.3
)
 


 
 
 
 
 
 
 
Net book value as of June 30, 2018
$
188.5

 
49.6

38.3

16.4

—

 
$
292.8

(1) Included in this amount for MSRs was $6.5 million relating to prepayments/write-offs due to prepayments of sold warehouse receivables for which we retained the servicing rights.
(2) Amortization of MSRs is included in Revenue before reimbursements 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, 2016
$
193.1

 
167.1

91.1

24.2

0.1

 
$
475.6

Additions, net of adjustments (1)
29.0

 
0.2

3.1

5.8

—

 
38.1

Adjustment for fully amortized intangibles
(6.0
)
 
(50.0
)
(7.7
)
(8.0
)
(0.1
)
 
(71.8
)
Impact of exchange rate movements
—

 
—

4.8

0.9

—

 
5.7

Balance as of June 30, 2017
$
216.1

 
117.3

91.3

22.9

—

 
$
447.6

 
 
 
 
 
 
 
 
 
Accumulated Amortization
 
 
 

 

 

 

 
 

Balance as of December 31, 2016
$
(32.3
)
 
(98.7
)
(38.0
)
(11.5
)
(0.1
)
 
$
(180.6
)
Amortization, net (2)
(18.9
)
 
(6.9
)
(7.6
)
(1.2
)
—

 
(34.6
)
Adjustment for fully amortized intangibles
6.0

 
50.0

7.7

8.0

0.1

 
71.8

Impact of exchange rate movements
—

 
0.2

(2.2
)
(0.2
)
—

 
(2.2
)
Balance as of June 30, 2017
$
(45.2
)
 
(55.4
)
(40.1
)
(4.9
)
—

 
$
(145.6
)
 
 
 
 
 
 
 
 
 
Net book value as of June 30, 2017
$
170.9

 
61.9

51.2

18.0

—

 
$
302.0


(1) Included in this amount for MSRs was $4.3 million relating to prepayments/write-offs due to prepayments of sold warehouse receivables for which we retained the servicing rights.
(2) Amortization of MSRs is included in Revenue before reimbursements within the Condensed Consolidated Statements of Comprehensive Income.
The remaining estimated future amortization expense of MSRs and other identifiable intangible assets, by year, as of June 30, 2018, is presented in the following table.
(in millions)
MSRs
Other Intangibles
 
Total
2018 (6 months)
$
15.8

13.8

 
$
29.6

2019
29.3

23.7

 
53.0

2020
27.1

19.2

 
46.3

2021
23.8

12.4

 
36.2

2022
21.0

6.5

 
27.5

2023
17.7

4.3

 
22.0

Thereafter
53.8

15.6

 
69.4

Total
$
188.5

95.5

 
$
284.0