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Business Combinations, Goodwill and Other Intangible Assets | 12 Months Ended
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Dec. 31, 2021
BUSINESS COMBINATIONS, GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract] |
Business Combinations, Goodwill and Other Intangible Assets | 4. BUSINESS COMBINATIONS, GOODWILL AND OTHER INTANGIBLE ASSETS 2021 Business Combinations Activity During 2021, we completed four 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
Skyline AI (Skyline) | Q3 | Israel | Capital Markets
Sterling Bay Property Management, LLC(1) | Q4 | United States | Property & Facility Management
Building Engines, Inc. | Q4 | United States | Property & Facility Management
Enerdapt, Inc. (Hank) | Q4 | United States | Advisory, Consulting and Other
(1) We acquired a 50.1% interest in a joint venture with Sterling Bay, LLC. Aggregate terms of our acquisitions included: (i) cash paid at closing of $416.8 million (net of $13.9 million in cash acquired), (ii) guaranteed deferred consideration of $10.0 million and (iii) contingent earn-out consideration of $68.6 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 $442.3 million, identifiable intangibles of $210.2 million, other net liabilities (assumed liabilities less acquired assets) of $34.6 million. The noncontrolling interest of 49.9% in the less-than-wholly-owned acquisition was $122.5 million at the acquisition date. As of December 31, 2021, we have completed our analysis to assign fair values to all of the material identifiable intangible and tangible assets acquired and, therefore, we do not anticipate further refinement to the purchase price allocations for our 2021 acquisitions. During the year ended December 31, 2021, we also paid $88.7 million for deferred business acquisition and earn-out obligations for acquisitions completed in prior years. Of the $442.3 million of total additions to goodwill in 2021, we expected to amortize and deduct $99.8 million for tax purposes as of December 31, 2021, subject to statutory amortization periods. 2020 Business Combinations Activity During the year ended December 31, 2020, we completed no new acquisitions. Earn-Out Payments
($ in millions) | December 31, 2021 |  | December 31, 2020
Number of acquisitions with earn-out payments subject to the achievement of certain performance criteria | 19 |  |  | 35 |
Maximum earn-out payments (undiscounted) | $ | 149.9 |  |  | 199.2 |
Short-term earn-out liabilities (fair value)(1) | 39.0 |  |  | 77.2 |
Long-term earn-out liabilities (fair value)(1) | 45.1 |  |  | 8.5 |
(1) Included 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 five 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, 2021 consisted of: (i) goodwill of $4,611.6 million, (ii) identifiable intangibles of $836.4 million amortized over their remaining finite useful lives and (iii) $50.6 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, 2019 | $ | 2,877.6 |  | 915.9 |  | 317.6 |  | 57.1 |  |  | $ | 4,168.2 |
Dispositions | — |  | (0.7) |  | — |  | — |  |  | (0.7) |
Impact of exchange rate movements | 0.4 |  | 44.5 |  | 11.6 |  | 0.7 |  |  | 57.2 |
Balance as of December 31, 2020 | 2,878.0 |  | 959.7 |  | 329.2 |  | 57.8 |  |  | 4,224.7 |
Additions, net of adjustments | 442.3 |  | — |  | — |  | — |  |  | 442.3 |
Dispositions | (11.0) |  | (1.0) |  | — |  | — |  |  | (12.0) |
Impact of exchange rate movements | — |  | (34.3) |  | (8.7) |  | (0.4) |  |  | (43.4) |
Balance as of December 31, 2021 | $ | 3,309.3 |  | 924.4 |  | 320.5 |  | 57.4 |  |  | $ | 4,611.6 |
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, 2019 | $ | 480.4 |  |  | 285.7 |  | 55.9 |  | 21.4 |  | 54.0 |  |  | $ | 897.4 |
Additions, net of adjustments (1) | 139.0 |  |  | — |  | — |  | 0.5 |  | — |  |  | 139.5 |
Adjustment for fully amortized intangibles | (47.3) |  |  | (19.9) |  | (1.9) |  | (0.1) |  | — |  |  | (69.2) |
Impact of exchange rate movements | — |  |  | — |  | 1.7 |  | 1.8 |  | 3.9 |  |  | 7.4 |
Balance as of December 31, 2020 | 572.1 |  |  | 265.8 |  | 55.7 |  | 23.6 |  | 57.9 |  |  | 975.1 |
Additions, net of adjustments (1) | 161.1 |  |  | 206.4 |  | 3.8 |  | — |  | — |  |  | 371.3 |
Adjustment for fully amortized intangibles | (63.5) |  |  | (15.8) |  | (30.0) |  | (4.7) |  | — |  |  | (114.0) |
Impact of exchange rate movements | — |  |  | — |  | (0.9) |  | (1.0) |  | (3.4) |  |  | (5.3) |
Balance as of December 31, 2021 | $ | 669.7 |  |  | 456.4 |  | 28.6 |  | 17.9 |  | 54.5 |  |  | $ | 1,227.1 |
Accumulated Amortization |  |  |  |  |  |  |  |
Balance as of December 31, 2019 | $ | (104.0) |  |  | (68.3) |  | (33.1) |  | (6.7) |  | (2.7) |  |  | $ | (214.8) |
Amortization expense, net (2) | (91.1) |  |  | (46.0) |  | (7.1) |  | (1.4) |  | (2.6) |  |  | (148.2) |
Adjustment for fully amortized intangibles | 47.3 |  |  | 19.9 |  | 1.9 |  | 0.1 |  | — |  |  | 69.2 |
Impact of exchange rate movements | — |  |  | 0.3 |  | (1.2) |  | (0.6) |  | — |  |  | (1.5) |
Balance as of December 31, 2020 | (147.8) |  |  | (94.1) |  | (39.5) |  | (8.6) |  | (5.3) |  |  | (295.3) |
Amortization expense, net (2) | (106.7) |  |  | (43.9) |  | (6.4) |  | (1.2) |  | (1.7) |  |  | (159.9) |
Adjustment for fully amortized intangibles | 63.5 |  |  | 15.8 |  | 30.0 |  | 4.7 |  | — |  |  | 114.0 |
Impact of exchange rate movements | — |  |  | 0.2 |  | 0.7 |  | 0.2 |  | — |  |  | 1.1 |
Balance as of December 31, 2021 | $ | (191.0) |  |  | (122.0) |  | (15.2) |  | (4.9) |  | (7.0) |  |  | $ | (340.1) |
Net book value as of December 31, 2021 | $ | 478.7 |  |  | 334.4 |  | 13.4 |  | 13.0 |  | 47.5 |  |  | $ | 887.0 |
(1) Included in this amount for MSRs was (i) $31.2 million and $23.7 million for 2021 and 2020, respectively, relating to write-offs due to prepayments of sold warehouse receivables for which we retained the servicing rights and (ii) $(0.1) million and $0.1 million for 2021 and 2020, respectively, relating to an impairment valuation allowance. (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 4.3 years and 4.9 years, respectively, and the remaining estimated future amortization expense by year, as of December 31, 2021, is presented in the following table.
(in millions) | MSRs | Other Intangibles | Total
2022 | $ | 81.6 |  | 66.6 |  | $ | 148.2 |
2023 | 76.5 |  | 62.2 |  | 138.7 |
2024 | 69.8 |  | 57.4 |  | 127.2 |
2025 | 60.6 |  | 39.7 |  | 100.3 |
2026 | 49.9 |  | 17.4 |  | 67.3 |
Thereafter | 140.3 |  | 114.4 |  | 254.7 |
Total | $ | 478.7 |  | 357.7 |  | $ | 836.4 |

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