Acquisitions

We continue to evaluate strategic opportunities to expand our industry expertise, strengthen our position in high-growth and key strategic geographical markets and industry sectors, advance technological capabilities and improve operational efficiency through both acquisitions and increased ownership interests in current investments. Our acquisitions typically provide for an initial payment at the time of closing and additional contingent purchase price payments based on the future performance of the acquired entity. We have entered into agreements that may require us to purchase additional equity interests in certain consolidated and unconsolidated subsidiaries. The amounts at which we record these transactions in our financial statements are based on estimates of the future financial performance of the acquired entity, the timing of the exercise of these rights, changes in foreign currency exchange rates and other factors.

During 2018, we completed five acquisitions, one of which was included in the IAN reportable segment, three of which were included in the CMG reportable segment, and Acxiom which is included in the "Corporate and other" group. See Note 6 for discussion of our acquisition of Acxiom. These acquisitions include a full-service digital agency based in Brazil, an entertainment marketing and brand licensing agency in the fashion and lifestyle sector based in the U.K., a content-focused social creative agency based in the U.K., a data and technology company based in the U.S., and a content production firm based in Israel. During 2018, we recorded approximately $2,131.0 of goodwill and other intangible assets related to our acquisitions.

During 2017, we completed ten acquisitions, eight of which were included in the IAN reportable segment, and two of which were included in the CMG reportable segment. The most significant acquisitions included a product and service design consultancy based in the U.S., an integrated healthcare marketing communications agency based in the U.S., a content creation and digital agency with offices in the U.S. and the U.K., a mobile consultancy and application development agency based in the U.K., a full-service public relations and digital agency based in China, a search engine optimization and digital content marketing agency based in the U.K., and a mobile focused digital agency based in the U.K. During 2017, we recorded approximately $62.0 of goodwill and other intangible assets related to our acquisitions.

During 2016, we completed ten acquisitions, three of which were included in the IAN reportable segment, and seven of which was included in the CMG reportable segment. The most significant acquisitions included a full-service digital agency in the U.K., a group of creative marketing agencies based in Russia, and a media planning and buying agency with significant digital capabilities in Canada. During 2016, we recorded approximately $149.0 of goodwill and other intangible assets related to our acquisitions.

The results of operations of our acquired companies were included in our consolidated results from the closing date of each acquisition. We did not make any payments in stock related to our acquisitions in 2018, 2017 or 2016.

Details of cash paid for current and prior years' acquisitions are listed below.



	Years ended December 31,
	2018			2017			2016
Cost of investment: current-year acquisitions ¹	$	2,323.4		$	36.8		$	65.7
Cost of investment: prior-year acquisitions	33.9			54.6			40.7
Less: net cash acquired	(13.8		)	(7.1		)	(13.6		)
Total cost of investment	2,343.5			84.3			92.8
Operating payments²	19.4			47.1			19.1
Total cash paid for acquisitions ³	$	2,362.9		$	131.4		$	111.9


1	The cost of investment: current-year acquisitions line significantly increased in the year ended December 31, 2018, primarily as a result of payments related to the acquisition of Acxiom. See Note 6 for further information on the Acxiom Acquisition.

Represents cash payments for amounts that have been recognized in operating expenses since the date of acquisition either relating to adjustments to estimates in excess of the initial value of contingent payments recorded or were contingent upon the future employment of the former owners of the acquired companies. Amounts are reflected in the operating section of the Consolidated Statements of Cash Flows.

Of the total cash paid for acquisitions, $2,309.8, $30.6 and $52.0 for the years ended December 31, 2018, 2017 and 2016, respectively, are classified under the investing section of the Consolidated Statements of Cash Flows as acquisitions, net of cash acquired. These amounts relate to initial payments for new transactions. Of the total cash paid for acquisitions, $33.7, $53.7 and $40.8 for the years ended December 31, 2018, 2017 and 2016, respectively, are classified under the financing section of the Consolidated Statements of Cash Flows as acquisition-related payments. These amounts relate to deferred payments and increases in our ownership interest for prior acquisitions.

For companies acquired, we estimate the fair values of the assets and liabilities based on 100% of the business for consolidation. The purchase price in excess of the estimated fair value of the tangible net assets acquired is allocated to identifiable intangible assets and then to goodwill. Due to the characteristics of advertising, specialized marketing and communication services companies, our acquisitions typically do not have significant amounts of tangible assets since the principal assets we acquire are client relationships and talent. As a result, a substantial portion of the purchase price is primarily allocated to customer lists, trade names and goodwill.

For acquisitions we record deferred payment and redeemable noncontrolling interest amounts on our Consolidated Balance Sheets based on their acquisition-date fair value. Deferred payments are recorded on a discounted basis and adjusted quarterly, if necessary, through operating income or net interest expense, depending on the nature of the arrangement, for both changes in estimate and accretion between the acquisition date and the final payment date. See Note 15 for further information on contingent acquisition obligations. Redeemable noncontrolling interests are adjusted quarterly, if necessary, to their estimated redemption value, but not less than their initial fair value. Any adjustments to the redemption value impact retained earnings or additional paid in capital, except for foreign currency translation adjustments. The following table presents changes in our redeemable noncontrolling interests.



	Years ended December 31,
	2018			2017			2016
Balance at beginning of period	$	252.1		$	252.8		$	251.9
Change in related noncontrolling interests balance	(10.7		)	(2.8		)	4.9
Changes in redemption value of redeemable noncontrolling interests:
Additions	—			7.7			6.8
Redemptions and other	(33.7		)	(18.5		)	(14.8		)
Redemption value adjustments	(39.8		)	12.9			4.0
Balance at end of period	$	167.9		$	252.1		$	252.8

For all acquisitions, if a portion of the deferred payments and purchases of additional interests after the effective date of purchase are contingent upon employment terms, then that amount is accounted for separately from the business combination and recognized as compensation expense over the required earn-out period. Payments deemed as compensation are excluded from the fair value purchase price allocation to tangible net assets and intangible assets acquired.