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Business Combinations, Goodwill and Other Intangible Assets
 6 Months Ended
Jun. 30, 2019
BUSINESS COMBINATIONS, GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract]  
Business Combinations, Goodwill and Other Intangible Assets
5.
BUSINESS COMBINATIONS, GOODWILL AND OTHER INTANGIBLE ASSETS
2019 Business Combinations Activity
Aggregate terms of our acquisitions included: (1) cash paid at closing of $28.3 million (net of $3.8 million in cash acquired), (2) guaranteed deferred consideration of $6.5 million, and (3) contingent earn-out consideration of $1.5 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 $39.2 million, identifiable intangibles of $10.2 million, other net liabilities (assumed liabilities less acquired assets) of $4.7 million, and redeemable noncontrolling interest of $8.4 million. As of June 30, 2019, 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 2019 acquisitions during their open measurement periods.
During the six months ended June 30, 2019, we paid $45.5 million for deferred business acquisition and earn-out obligations for acquisitions completed in prior years.
Within the 2019 acquisition activity, we completed two new strategic acquisitions, expanding our capabilities and increasing our presence in key regional markets. These strategic acquisitions are presented below.
Acquired Company
Quarter of Acquisition
Country
Primary Service Line
Latitude Real Estate Investors (Latitude)
Q1
United States
LaSalle
Corporate Concierge Services (CCS)
Q1
United States
Property & Facilities Management

2018 Business Combination Activity
During the six months ended June 30, 2019, we made adjustments to our preliminary allocation of the purchase consideration for certain acquisitions completed during the second half of 2018. These adjustments resulted in a $1.0 million increase to goodwill, a $0.5 million increase to intangibles and a $1.5 million adjustment to other net liabilities. As of June 30, 2019, we have not completed our analysis to assign fair values to all the identifiable intangible and tangible assets acquired and, therefore, we may refine the purchase price allocations for our 2018 acquisitions, with open measurement periods.
Earn-Out Payments
($ in millions)
June 30, 2019
 
December 31, 2018
Number of acquisitions with earn-out payments subject to the achievement of certain performance criteria
50

 
54

Maximum earn-out payments (undiscounted)
$
369.3

 
407.3

Short-term earn-out liabilities (fair value)1
68.9

 
50.9

Long-term earn-out liabilities (fair value)1
111.4

 
141.1

1 Included in Short-term and Long-term acquisition-related 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 12, 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, 2019 consisted of: (1) goodwill of $2,730.7 million, (2) identifiable intangibles of $286.1 million amortized over their remaining finite useful lives, and (3) $50.0 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, 2018
$
1,452.0

906.8

316.8

22.2

 
$
2,697.8

Additions, net of adjustments
3.2

1.6

—

35.4

 
40.2

Impact of exchange rate movements
1.2

(8.0
)
0.5

(1.0
)
 
(7.3
)
Balance as of June 30, 2019
$
1,456.4

900.4

317.3

56.6

 
$
2,730.7

 
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


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, 2018
$
266.2

 
90.0

83.1

23.5

43.9

 
$
506.7

Additions, net of adjustments (1)
21.2

 
0.9

0.1

—

9.7

 
31.9

Adjustment for fully amortized intangibles
(8.2
)
 
—

(14.0
)
—

—

 
(22.2
)
Impact of exchange rate movements
—

 
0.1

(0.8
)
—

0.7

 
—

Balance as of June 30, 2019
$
279.2

 
91.0

68.4

23.5

54.3

 
$
516.4

 
 
 
 
 
 
 
 
 
Accumulated Amortization
 
 
 

 

 

 

 
 

Balance as of December 31, 2018
$
(72.4
)
 
(38.8
)
(51.8
)
(6.8
)
—

 
$
(169.8
)
Amortization, net (2)
(18.6
)
 
(7.1
)
(5.4
)
(1.1
)
(1.4
)
 
(33.6
)
Adjustment for fully amortized intangibles
8.2

 
—

14.0

—

—

 
22.2

Impact of exchange rate movements
—

 
0.2

0.7

—

—

 
0.9

Balance as of June 30, 2019
$
(82.8
)
 
(45.7
)
(42.5
)
(7.9
)
(1.4
)
 
$
(180.3
)
 


 
 
 
 
 
 
 
Net book value as of June 30, 2019
$
196.4

 
45.3

25.9

15.6

52.9

 
$
336.1

(1) Included in this amount for MSRs was $3.0 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, 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.


The remaining estimated future amortization expense of MSRs and other identifiable intangible assets, by year, as of June 30, 2019, is presented in the following table.
(in millions)
MSRs
Other Intangibles
 
Total
2019 (remaining 6 months)
$
15.7

18.6

 
$
34.3

2020
30.5

22.6

 
53.1

2021
27.9

15.5

 
43.4

2022
25.2

8.4

 
33.6

2023
21.9

5.9

 
27.8

2024
19.4

4.0

 
23.4

Thereafter
55.8

14.7

 
70.5

Total
$
196.4

89.7

 
$
286.1