We measure certain assets and liabilities in accordance with ASC 820, Fair Value Measurements and Disclosures, which defines fair value as the price that would be received for an asset, or paid to transfer a liability, in an orderly transaction between market participants on the measurement date. In addition, it establishes a framework for measuring fair value according to the following three-tier fair value hierarchy:

Our financial instruments include Cash and cash equivalents, Trade receivables, Notes and other receivables, Reimbursable receivables, Warehouse receivables, restricted cash, contract assets, Accounts payable, Reimbursable payables, Short-term borrowings, contract liabilities, Warehouse facilities, Credit facility, Long-term debt, and foreign currency forward contracts. The carrying amounts of Cash and cash equivalents, Trade receivables, Notes and other receivables, Reimbursable receivables, restricted cash, contract assets, Accounts payable, Reimbursable payables, contract liabilities, and the Warehouse facilities approximate their estimated fair values due to the short-term nature of these instruments. The carrying values of our Credit facility and Short-term borrowings approximate their estimated fair values given the variable interest rate terms and market spreads.

We estimated the fair value of our Long-term debt as $680.8 million and $671.4 million as of June 30, 2019 and December 31, 2018, respectively, using dealer quotes that are Level 2 inputs in the fair value hierarchy. The carrying value of our Long-term debt was $669.6 million and $671.5 million as of June 30, 2019 and December 31, 2018, respectively, and included debt issuance costs of $3.4 million and $3.7 million, respectively.

We report a majority of our investments in real estate ventures at fair value. For such investments, we increase or decrease our investment each reporting period by the change in the fair value and we report these fair value adjustments in our Condensed Consolidated Statements of Comprehensive Income within Equity earnings from real estate ventures.

For the majority of our investments reported at fair value, we estimate the fair value using the NAV per share (or its equivalent) our investees provide. Critical inputs to NAV estimates included valuations of the underlying real estate assets and borrowings, which incorporate investment-specific assumptions such as discount rates, capitalization rates, rental and expense growth rates, and asset-specific market borrowing rates. We did not consider adjustments to NAV estimates provided by investees, including adjustments for any restrictions to the transferability of ownership interests embedded within investment agreements to which we are a party, to be necessary based upon (1) our understanding of the methodology utilized and inputs incorporated to estimate NAV at the investee level derived through LaSalle's role as advisor or manager of these investments, (2) consideration of market demand for the specific types of real estate assets held by each investment, and (3) contemplation of real estate and capital markets conditions in the localities in which these investments operate. As of June 30, 2019 and December 31, 2018, investments in real estate ventures at fair value using NAV were $204.1 million and $191.2 million, respectively. As these investments are not required to be classified in the fair value hierarchy, they have been excluded from the following table.



	June 30, 2019				December 31, 2018
(in millions)	Level 1		Level 2	Level 3	Level 1	Level 2	Level 3
Assets
Investments in real estate ventures - fair value	$	48.7	—	20.0	44.6	—	11.5
Foreign currency forward contracts receivable	—		8.0	—	—	6.5	—
Warehouse receivables	—		403.1	—	—	331.2	—
Deferred compensation plan assets	—		297.7	—	—	258.2	—
Mortgage banking derivative assets	—		—	43.8	—	—	32.4
Total assets at fair value	$	48.7	708.8	63.8	44.6	595.9	43.9
Liabilities
Foreign currency forward contracts payable	$	—	10.0	—	—	8.6	—
Deferred compensation plan liabilities	—		296.2	—	—	251.8	—
Earn-out liabilities	—		—	180.3	—	—	192.0
Mortgage banking derivative liabilities	—		—	45.1	—	—	26.1
Total liabilities at fair value	$	—	306.2	225.4	—	260.4	218.1

We classify one investment as Level 1 in the fair value hierarchy as a quoted price is readily available. We increase or decrease our investment each reporting period by the change in the fair value of the investment. We report these fair value adjustments in our Condensed Consolidated Statements of Comprehensive Income within Equity earnings from real estate ventures.

Investments classified as Level 3 in the fair value hierarchy represent investments in early-stage non-public entities where we elected the fair value option. Generally, the carrying value is deemed to approximate the fair value of these investments due to the proximity of the investment date to the balance sheet date as well as investee-level performance updates.

We regularly use foreign currency forward contracts to manage our currency exchange rate risk related to intercompany lending and cash management practices. These contracts are on our Condensed Consolidated Balance Sheets as current assets and current liabilities. We determine the fair values of these contracts based on current market rates. The inputs for these valuations are Level 2 inputs in the fair value hierarchy. As of June 30, 2019 and December 31, 2018, these contracts had a gross notional value of $2.08 billion ($0.66 billion on a net basis) and $1.99 billion ($0.84 billion on a net basis), respectively.

We recognize gains and losses from revaluation of these contracts as a component of Operating, administrative and other expense. They are offset by the gains and losses we recognize on the revaluation of intercompany loans and other foreign currency balances. The impact to net income was not significant for either the three or six months ended June 30, 2019 or 2018.

We record the asset and liability positions for our foreign currency forward contracts based on the net payable or net receivable position with the financial institutions from which we purchase these contracts. The $8.0 million asset as of June 30, 2019, was composed of gross contracts with receivable positions of $9.0 million and payable positions of $1.0 million. The $10.0 million liability as of June 30, 2019, was composed of gross contracts with receivable positions of $1.0 million and payable positions of $11.0 million. As of December 31, 2018, the $6.5 million asset was composed of gross contracts with receivable positions of $6.7 million and payable positions of $0.2 million. The $8.6 million liability as of December 31, 2018, was composed of gross contracts with receivable positions of $0.6 million and payable positions of $9.2 million.

The fair value of the Warehouse receivables is based on already locked-in security-buy prices. As of June 30, 2019 and December 31, 2018, all of our Warehouse receivables included in our Condensed Consolidated Balance Sheet were under commitment to be purchased by government-sponsored enterprises ("GSEs") or by a qualifying investor as part of a U.S. government or GSE mortgage-backed security program. The Warehouse receivables are classified as Level 2 in the fair value hierarchy as all significant inputs are readily observable.

We maintain a deferred compensation plan for certain of our U.S. employees that allows them to defer portions of their compensation. We invest directly in insurance contracts which yield returns to fund these deferred compensation obligations. We recognize an asset for the amount that could be realized under these insurance contracts as of the balance sheet date, and we adjust the deferred compensation obligation to reflect the changes in the fair value of the amount owed to the employees. The inputs for this valuation are Level 2 inputs in the fair value hierarchy. We recorded this plan on our Condensed Consolidated Balance Sheet as of June 30, 2019, as Deferred compensation plan assets of $297.7 million, long-term deferred compensation plan liabilities of $296.2 million, included in Deferred compensation, and as a reduction of equity, Shares held in trust, of $5.9 million. We recorded this plan on our Condensed Consolidated Balance Sheet as of December 31, 2018, as Deferred compensation plan assets of $258.2 million, long-term deferred compensation plan liabilities of $251.8 million, included in Deferred compensation, and as a reduction of equity, Shares held in trust, of $5.8 million.

We classify our earn-out liabilities within Level 3 in the fair value hierarchy because the inputs we use to develop the estimated fair value include unobservable inputs. We base the fair value of our earn-out liabilities on the present value of probability-weighted future cash flows related to the earn-out performance criteria on each reporting date. We determine the probability of achievement we assign to the performance criteria based on the due diligence we performed at the time of acquisition as well as actual performance achieved subsequent to acquisition. An increase to the probability of achievement would result in a higher fair value measurement. See Note 5, Business Combinations, Goodwill and Other Intangible Assets, for additional discussion of our earn-out liabilities.

The fair value of our rate lock commitments to prospective borrowers and the related inputs primarily include, as applicable, the expected net cash flows associated with closing and servicing the loan and the effects of interest rate movements between the date of the interest rate lock commitment ("IRLC") and the balance sheet date based on applicable published U.S. Treasury rates.

The fair value of our forward sales contracts with prospective investors considers the market price movement of a similar security between the trade date and the balance sheet date. The market price changes are multiplied by the notional amount of the forward sales contracts to measure the fair value.

Both the rate lock commitments to prospective borrowers and the forward sale contracts with prospective investors are undesignated derivatives and considered Level 3 valuations due to significant unobservable inputs related to counterparty credit risk. An increase in counterparty credit risk assumptions would result in a lower fair value measurement. The fair valuation is determined using discounted cash flow techniques, and the derivatives are marked to fair value through Revenue before reimbursements in the Condensed Consolidated Statements on Comprehensive Income.



(in millions)	Balance as of March 31, 2019		Net change in fair value		Foreign CTA¹	Purchases / Additions	Settlements		Balance as of June 30, 2019
Investments in real estate ventures	$	13.0	—		—	7.0	—		$	20.0
Mortgage banking derivative assets and liabilities, net	0.6		(12.5	)	—	17.4	(6.8	)	(1.3		)
Earn-out liabilities	169.2		14.3		0.1	—	(3.3	)	180.3



(in millions)	Balance as of March 31, 2018		Net change in fair value		Foreign CTA¹		Purchases / Additions		Settlements		Balance as of June 30, 2018
Mortgage banking derivative assets and liabilities, net	$	5.8	(1.3	)	—		17.3		(13.7	)	$	8.1
Earn-out liabilities	220.3		(13.6	)	(3.0	)	(0.1	)	(24.0	)	179.6



(in millions)	Balance as of December 31, 2018		Net change in fair value		Foreign CTA¹		Purchases / Additions	Settlements		Balance as of June 30, 2019
Investments in real estate ventures	$	11.5	—		—		8.5	—		$	20.0
Mortgage banking derivative assets and liabilities, net	6.3		(21.7	)	—		32.5	(18.4	)	(1.3		)
Earn-out liabilities	192.0		20.0		(0.2	)	1.5	(33.0	)	180.3



(in millions)	Balance as of December 31, 2017		Net change in fair value		Foreign CTA¹		Purchases / Additions	Settlements		Balance as of June 30, 2018
Mortgage banking derivative assets and liabilities, net	$	8.7	(3.4	)	—		34.7	(31.9	)	$	8.1
Earn-out liabilities	227.1		(14.8	)	(2.5	)	1.6	(31.8	)	179.6



Category of Assets/Liabilities using Unobservable Inputs	Condensed Consolidated Statements of Comprehensive Income Account Caption
Earn-out liabilities (Short-term and Long-term)	Restructuring and acquisition charges
Investments in real estate ventures	Equity earnings from real estate ventures
Other current assets - Mortgage banking derivative assets	Revenue before reimbursements
Other current liabilities - Mortgage banking derivative liabilities	Revenue before reimbursements

We review our investments in real estate ventures, except those investments otherwise reported at fair value, on a quarterly basis, or as otherwise deemed necessary, for indications of whether we may be unable to recover the carrying value of our investments and whether such investments are other-than-temporarily impaired. When the carrying amount of the investment is in excess of the estimated future undiscounted cash flows, we use a discounted cash flow approach or other acceptable method to determine the fair value of the investment in computing the amount of the impairment. Our determination of fair value primarily relies on Level 3 inputs. We did not recognize any significant investment-level impairment losses during either of the three or six months ended June 30, 2019 or 2018. See Note 6, Investments in Real Estate Ventures, for additional information, including information related to impairment charges recorded at the investee level.