
4.	BUSINESS COMBINATIONS, GOODWILL AND OTHER INTANGIBLE ASSETS

2018 Business Combinations Activity

Aggregate terms of our acquisitions included: (i) cash paid at closing of $101.3 million, (ii) guaranteed deferred consideration of $3.9 million and (iii) contingent earn-out consideration of $11.6 million, payable upon satisfaction of certain performance conditions and which we have initially recorded at their respective acquisition date fair value.

A preliminary allocation of this purchase consideration resulted in goodwill of $60.8 million, identifiable intangibles of $57.1 million, and other net liabilities (assumed liabilities less acquired assets) of $1.1 million. As of December 31, 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 2018 acquisitions during respective open measurement periods.

During the year ended December 31, 2018, we also paid $72.3 million for deferred business acquisition and earn-out obligations for acquisitions completed in prior years. We also paid $1.5 million to acquire a portion of the redeemable noncontrolling interest related to our 2014 acquisition of Tenzing AB, a Swedish real estate services provider.

Of the $60.8 million of total additions to goodwill in 2018, we expected to amortize and deduct $35.5 million for tax purposes as of December 31, 2018, subject to statutory amortization periods.

Within the 2018 acquisition activity, we completed six new strategic acquisitions, as presented in the below table.



Acquired Company	Quarter of Acquisition	Primary 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
Northwest Atlantic	Q3	Canada	Leasing
ValuD	Q4	United States	Advisory, Consulting and Other
Aviva	Q4	England	LaSalle

2017 Business Combinations Activity

During the year ended December 31, 2017, we completed five new strategic acquisitions: two located in the Americas and three located in EMEA.

Aggregate terms of these acquisitions included: (i) cash paid at closing of $22.4 million (which excludes $5.6 million in cash acquired), (ii) guaranteed deferred consideration of $1.8 million subject only to the passage of time and (iii) contingent earn-out consideration of $11.5 million recorded at their respective acquisition date fair value, which we will pay upon satisfaction of certain performance conditions.

As of December 31, 2017, a preliminary allocation of this purchase consideration resulted in goodwill of $24.1 million, identifiable intangibles of $9.7 million, and other net assets (acquired assets less assumed liabilities) of $1.9 million. During 2018, we did not make any adjustments to the fair values of all identifiable intangible and tangible assets acquired in 2017. As of December 31, 2018, the purchase price allocations for our 2017 acquisitions was final.

During the year ended December 31, 2017, we also paid $50.7 million for deferred business acquisition and earn-out obligations for acquisitions completed in prior years. In addition, we paid $2.4 million to acquire a portion of the redeemable noncontrolling interest related to our 2014 acquisition of Tenzing AB.

Of the $29.7 million of total additions to goodwill in 2017, we expected to amortize and deduct $3.5 million for tax purposes as of December 31, 2017, subject to statutory amortization periods.

During the year ended December 31, 2017, we made adjustments to our preliminary allocation of the purchase consideration for certain acquisitions completed in 2016 during their respective open measurement periods. These adjustments resulted in a $5.6 million increase to goodwill, which included a $1.9 million net working capital adjustment payment, and a $0.4 million reduction to identifiable intangibles.

Earn-Out Payments



($ in millions)	December 31, 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)	$	407.3	436.2
Short-term earn-out liabilities (fair value)¹	50.9		49.6
Long-term earn-out liabilities (fair value)¹	141.1		177.5

¹Included in Short-term and Long-term acquisition obligations on the 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 9, Fair Value Measurements, and Note 14, Restructuring and Acquisition Charges, for additional discussion of our earn-out liabilities.

Goodwill and Other Intangible Assets

Goodwill and unamortized intangibles as of December 31, 2018 consisted of: (i) goodwill of $2,697.8 million, (ii) identifiable intangibles of $287.7 million amortized over their remaining finite useful lives and (iii) $49.3 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 table details, by reporting segment, the annual movements in goodwill.



($ 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	5.3			17.7		6.7		—			29.7
Impact of exchange rate movements	0.8			88.2		10.2		1.1			100.3
Balance as of December 31, 2017	1,412.2			957.6		323.0		16.5			2,709.3
Additions, net of adjustments	42.0			1.9		8.7		6.4			59.0
Dispositions	—			—		(3.9	)	—			(3.9		)
Impact of exchange rate movements	(2.2		)	(52.7	)	(11.0	)	(0.7	)		(66.6		)
Balance as of December 31, 2018	$	1,452.0		906.8		316.8		22.2			$	2,697.8

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



	MSR			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⁾	66.6			0.4		3.1		5.8		—		75.9
Adjustment for fully amortized intangibles	(17.9		)	(50.7	)	(13.6	)	(7.9	)	(0.1	)	(90.2		)
Impact of exchange rate movements	—			0.2		8.2		1.2		—		9.6
Balance as of December 31, 2017	241.8			117.0		88.8		23.3		—		470.9
Additions, net of adjustments ⁽¹⁾	49.9			9.1		0.3		3.8		43.9		107.0
Adjustment for fully amortized intangibles	(25.5		)	(36.2	)	(1.7	)	(1.0	)	—		(64.4		)
Impact of exchange rate movements	—			0.1		(4.3	)	(2.6	)	—		(6.8		)
Balance as of December 31, 2018	$	266.2		90.0		83.1		23.5		43.9		$	506.7

Accumulated Amortization
Balance as of December 31, 2016	$	(32.3	)	(98.7	)	(38.0	)	(11.5	)	(0.1	)	$	(180.6	)
Amortization expense, net ⁽²⁾	(40.7		)	(13.7	)	(14.8	)	(2.6	)	—		(71.8		)
Adjustment for fully amortized intangibles	17.9			50.7		13.6		7.9		0.1		90.2
Impact of exchange rate movements	—			0.4		(3.9	)	(0.2	)	—		(3.7		)
Balance as of December 31, 2017	(55.1		)	(61.3	)	(43.1	)	(6.4	)	—		(165.9		)
Amortization expense, net ⁽²⁾	(42.8		)	(14.0	)	(12.8	)	(2.6	)	—		(72.2		)
Adjustment for fully amortized intangibles	25.5			36.2		1.7		1.0		—		64.4
Impact of exchange rate movements	—			0.3		2.4		1.2		—		3.9
Balance as of December 31, 2018	$	(72.4	)	(38.8	)	(51.8	)	(6.8	)	—		$	(169.8	)

Net book value as of December 31, 2018	$	193.8		51.2		31.3		16.7		43.9		$	336.9

(1) Included in this amount for MSRs was $11.4 million and $10.8 million for 2018 and 2017, respectively, relating to write-offs due to prepayments of sold warehouse receivables for which we retained the servicing rights.

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

The remaining weighted average amortization period of MSRs and other finite-lived identifiable intangible assets is 4.6 years and 3.9 years, respectively, and the remaining estimated future amortization expense by year, as of December 31, 2018, is presented in the following table.



($ in millions)	MSRs		Other Intangibles	Total
2019	$	30.7	25.2	$	55.9
2020	28.9		21.0	49.9
2021	26.3		14.0	40.3
2022	23.5		8.4	31.9
2023	20.1		5.9	26.0
Thereafter	64.3		19.4	83.7
Total	$	193.8	93.9	$	287.7