United States

Securities and Exchange Commission

Washington, D.C. 20549

Form 10-Q

☑ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, ~~2020~~2021

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _____ to _____

Commission File Number 1-13145

Jones Lang LaSalle Incorporated

(Exact name of registrant as specified in its charter)

Maryland

36-4150422

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

200 East Randolph ~~Dr,~~Drive

Chicago,

60601

(Address of principal executive offices)

(Zip Code)

Registrant's telephone number, including area code:

(312)

782-5800

Former name, former address and former fiscal year, if changed since last report: Not Applicable

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, par value $0.01

JLL

The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

The number of shares outstanding of the registrant's common stock (par value $0.01) as of the close of business on April ~~30, 2020~~29, 2021 was ~~51,630,564.~~51,307,170.

Table of Contents




Part I			Financial Information

Item 1.			Condensed Consolidated Financial Statements:	3

			Balance Sheets as of March 31, ~~2020~~2021 and December 31, ~~2019~~2020	3

			Statements of Comprehensive Income for the Three Months Ended March 31, ~~2020~~2021 and ~~2019~~2020	4

			Statements of Changes in Equity for the Three Months Ended March 31, ~~2020~~2021 and ~~2019~~2020	5

			Statements of Cash Flows for the Three Months Ended March 31, ~~2020~~2021 and ~~2019~~2020	6

			Notes to Condensed Consolidated Financial Statements	7

Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations	2624

Item 3.			Quantitative and Qualitative Disclosures about Market Risk	4239

Item 4.			Controls and Procedures	4239

Part II			Other Information

Item 1.			Legal Proceedings	4340

Item 1A.			Risk Factors	4340





Item 2.6.			~~Unregistered Sales of Equity Securities and Use of Proceeds~~Exhibits	4340

~~Item 5.~~	~~Other Information~~	43

~~Item 6.~~	~~Exhibits~~	45

Signature				4641

Table of Contents

Part I. Financial Information

Item 1. Financial Statements

JONES LANG LASALLE INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS


(in millions, except share and per share data)	March 31, 2020			December 31, 2019			(in millions, except share and per share data)	March 31, 2021		December 31, 2020
Assets	(unaudited)						Assets	(unaudited)
Current assets:							Current assets:
Cash and cash equivalents	$	720.7		451.9			Cash and cash equivalents	$	456.6	574.3
Trade receivables, net of allowance of $69.0 and $68.1	1,724.7			2,034.3
Trade receivables, net of allowance of $70.2 and $66.5							Trade receivables, net of allowance of $70.2 and $66.5	1,477.4		1,636.1
Notes and other receivables	444.0			472.8			Notes and other receivables	399.9		469.9
Reimbursable receivables	1,528.3			1,671.2			Reimbursable receivables	1,430.1		1,461.3
Warehouse receivables	1,026.8			527.1			Warehouse receivables	832.1		1,529.2
Short-term contract assets, net of allowance of $1.8 and $-	325.8			333.4
Short-term contract assets, net of allowance of $2.1 and $1.8							Short-term contract assets, net of allowance of $2.1 and $1.8	264.7		265.8
Prepaid & other	427.0			377.9			Prepaid & other	412.9		517.1
Total current assets	6,197.3			5,868.6			Total current assets	5,273.7		6,453.7
Property and equipment, net of accumulated depreciation of $685.6 and $660.7	678.4			701.9
Property and equipment, net of accumulated depreciation of $834.9 and $806.2							Property and equipment, net of accumulated depreciation of $834.9 and $806.2	682.0		663.9
Operating lease right-of-use assets	806.5			804.4			Operating lease right-of-use assets	706.5		707.4
Goodwill	4,104.3			4,168.2			Goodwill	4,201.7		4,224.7
Identified intangibles, net of accumulated amortization of $236.1 and $214.8	658.7			682.6
Investments in real estate ventures, including $302.0 and $328.6 at fair value	390.8			404.2
Identified intangibles, net of accumulated amortization of $312.3 and $295.3							Identified intangibles, net of accumulated amortization of $312.3 and $295.3	687.0		679.8
Investments in real estate ventures, including $435.4 and $340.3 at fair value							Investments in real estate ventures, including $435.4 and $340.3 at fair value	545.1		430.8
Long-term receivables	255.8			250.2			Long-term receivables	249.7		231.1
Deferred tax assets, net	232.4			245.4			Deferred tax assets, net	293.9		296.5
Deferred compensation plan	374.2			349.9			Deferred compensation plan	480.2		446.3
Other	202.4			197.2			Other	186.6		182.3
Total assets	$	13,900.8		13,672.6			Total assets	$	13,306.4	14,316.5
Liabilities and Equity							Liabilities and Equity
Current liabilities:							Current liabilities:
Accounts payable and accrued liabilities	$	1,096.2		1,289.4			Accounts payable and accrued liabilities	$	1,108.7	1,229.8
Reimbursable payables	1,053.2			1,245.8			Reimbursable payables	1,016.6		1,154.5
Accrued compensation & benefits	1,044.2			1,729.2			Accrued compensation & benefits	1,031.4		1,433.2
Short-term borrowings	125.2			120.1			Short-term borrowings	90.6		62.0
Short-term contract liabilities and deferred income	152.7			158.8			Short-term contract liabilities and deferred income	181.0		192.9
Short-term acquisition-related obligations	68.6			74.4			Short-term acquisition-related obligations	72.4		91.7
Warehouse facilities	936.6			515.9			Warehouse facilities	833.5		1,498.4

Short-term operating lease liabilities	154.0			153.4			Short-term operating lease liabilities	159.1		165.7
Other	356.7			203.2			Other	198.5		299.6
Total current liabilities	4,987.4			5,490.2			Total current liabilities	4,691.8		6,127.8
Credit facility, net of debt issuance costs of $11.4 and $12.3	1,438.6			512.7
Long-term debt, net of debt issuance costs of $2.9 and $3.1	656.1			664.6
Credit facility, net of debt issuance costs of $7.7 and $8.7							Credit facility, net of debt issuance costs of $7.7 and $8.7	342.3		(8.7)
Long-term debt, net of debt issuance costs of $2.3 and $2.5							Long-term debt, net of debt issuance costs of $2.3 and $2.5	684.0		702.0
Deferred tax liabilities, net	87.5			106.0			Deferred tax liabilities, net	114.6		120.0
Deferred compensation	368.4			374.3			Deferred compensation	461.8		450.0

Long-term acquisition-related obligations	106.7			124.1			Long-term acquisition-related obligations	22.7		26.2

Long-term operating lease liabilities	734.9			751.2			Long-term operating lease liabilities	692.4		683.9
Other	483.7			436.2			Other	582.1		597.5
Total liabilities	8,863.3			8,459.3			Total liabilities	7,591.7		8,698.7

Redeemable noncontrolling interest	8.6			8.6			Redeemable noncontrolling interest	7.8		7.8
Company shareholders' equity:							Company shareholders' equity:
Common stock, $0.01 par value per share, 100,000,000 shares authorized; 51,810,592 and 51,549,654 shares issued; 51,622,839 and 51,549,654 outstanding	0.5			0.5
Common stock, $0.01 par value per share, 100,000,000 shares authorized; 52,073,440 and 51,970,307 shares issued; 51,306,200 and 51,105,417 outstanding							Common stock, $0.01 par value per share, 100,000,000 shares authorized; 52,073,440 and 51,970,307 shares issued; 51,306,200 and 51,105,417 outstanding	0.5		0.5
Additional paid-in capital	1,969.6			1,962.8			Additional paid-in capital	2,015.5		2,023.3
Retained earnings	3,578.7			3,588.3			Retained earnings	4,078.9		3,975.9
Treasury stock, at cost, 187,753 and - shares	(25.0		)	—
Treasury stock, at cost, 767,240 and 864,890 shares							Treasury stock, at cost, 767,240 and 864,890 shares	(85.7)		(96.1)
Shares held in trust	(5.6		)	(5.7		)	Shares held in trust	(5.4)		(5.6)
Accumulated other comprehensive loss	(571.2		)	(427.8		)	Accumulated other comprehensive loss	(383.6)		(377.2)
Total Company shareholders’ equity	4,947.0			5,118.1			Total Company shareholders’ equity	5,620.2		5,520.8
Noncontrolling interest	81.9			86.6			Noncontrolling interest	86.7		89.2
Total equity	5,028.9			5,204.7			Total equity	5,706.9		5,610.0
Total liabilities, redeemable noncontrolling interest and equity	$	13,900.8		$	13,672.6		Total liabilities, redeemable noncontrolling interest and equity	$	13,306.4	14,316.5

See accompanying notes to Condensed Consolidated Financial Statements.

Table of Contents

JONES LANG LASALLE INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


(in millions, except share and per share data) (unaudited)	Three Months Ended March 31,					(in millions, except share and per share data) (unaudited)	Three Months Ended March 31,
	2020			2019				2021		2020
Revenue:						Revenue:
Revenue before reimbursements	$	2,233.0		1,961.6		Revenue before reimbursements		$	2,129.6	2,233.0
Reimbursements	1,863.0			1,859.0		Reimbursements		1,907.5		1,863.0
Total revenue	$	4,096.0		3,820.6		Total revenue		$	4,037.1	4,096.0
Operating expenses:						Operating expenses:
Compensation and benefits	$	1,324.5		1,163.8		Compensation and benefits		$	1,334.4	1,324.5
Operating, administrative and other	774.8			707.3		Operating, administrative and other		644.3		774.8
Reimbursed expenses	1,863.0			1,859.0		Reimbursed expenses		1,907.5		1,863.0
Depreciation and amortization	55.0			46.5		Depreciation and amortization		53.0		55.0
Restructuring and acquisition charges	14.1			18.6		Restructuring and acquisition charges		17.2		14.1
Total operating expenses	$	4,031.4		3,795.2		Total operating expenses		$	3,956.4	4,031.4
Operating income	$	64.6		25.4		Operating income		$	80.7	64.6
Interest expense, net of interest income	14.6			9.6		Interest expense, net of interest income		10.4		14.6
Equity (losses) earnings	(28.3		)	5.0
Other income (expense)	0.9			(0.3	)
Equity earnings (losses)						Equity earnings (losses)		48.5		(28.3)
Other income						Other income		11.8		0.9
Income before income taxes and noncontrolling interest	22.6			20.5		Income before income taxes and noncontrolling interest		130.6		22.6
Income tax provision (benefit)	5.0			(0.7	)
Income tax provision						Income tax provision		28.2		5.0
Net income	17.6			21.2		Net income		102.4		17.6
Net income (loss) attributable to noncontrolling interest	12.3			(0.1	)
Net income attributable to the Company	5.3			21.3
Net (loss) income attributable to noncontrolling interest						Net (loss) income attributable to noncontrolling interest		(0.6)		12.3

Net income attributable to common shareholders	$	5.3		21.3		Net income attributable to common shareholders		$	103.0	5.3
Basic earnings per common share	$	0.10		0.47		Basic earnings per common share		$	2.01	0.10
Basic weighted average shares outstanding (in 000's)	51,612			45,674		Basic weighted average shares outstanding (in 000's)		51,173		51,612
Diluted earnings per common share	$	0.10		0.46		Diluted earnings per common share		$	1.97	0.10
Diluted weighted average shares outstanding (in 000's)	52,458			46,019		Diluted weighted average shares outstanding (in 000's)		52,175		52,458
Net income attributable to the Company	$	5.3		21.3

Net income attributable to common shareholders						Net income attributable to common shareholders		$	103.0	5.3
Change in pension liabilities, net of tax	—			(1.0	)	Change in pension liabilities, net of tax		(0.2)		0
Foreign currency translation adjustments	(143.4		)	31.3		Foreign currency translation adjustments		(6.2)		(143.4)
Comprehensive (loss) income attributable to the Company	$	(138.1	)	51.6
Comprehensive income attributable to common shareholders						Comprehensive income attributable to common shareholders		$	96.6	(138.1)

See accompanying notes to Condensed Consolidated Financial Statements.

Table of Contents

JONES LANG LASALLE INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, ~~2020~~2021 AND ~~2019~~2020


	Company Shareholders' Equity

	Common Stock			Additional		Shares
(in millions, except share and per share data) (unaudited)	Outstanding			Paid-In	Retained	Held in	Treasury			Total
	Shares	Amount		Capital	Earnings	Trust	Stock	AOCI(1)	NCI(2)	Equity
December 31, 2020	51,105,417	$	0.5	2,023.3	3,975.9	(5.6)	(96.1)	(377.2)	89.2	$	5,610.0
Net income (loss)	—	—		—	103.0	—	—	—	(0.6)	102.4
Shares issued under stock-based compensation programs	290,563	—		(15.6)	—	—	15.9	—	—	0.3
Shares repurchased for payment of taxes on stock-based compensation	(89,780)	—		(9.7)	—	—	(5.5)	—	—	(15.2)
Amortization of stock-based compensation	—	—		17.5	—	—	—	—	—	17.5


Shares held in trust	—	—		—	—	0.2	—	—	—	0.2


Change in pension liabilities, net of tax	—	—		—	—	—	—	(0.2)	—	(0.2)
Foreign currency translation adjustments	—	—		—	—	—	—	(6.2)	—	(6.2)
Decrease in amounts attributable to noncontrolling interest	—	—		—	—	—	—	—	(1.9)	(1.9)

March 31, 2021	51,306,200	$	0.5	2,015.5	4,078.9	(5.4)	(85.7)	(383.6)	86.7	$	5,706.9

Company Shareholders' Equity
Common Stock Additional Shares
(in millions, except share and
per share data) (unaudited)
Outstanding Paid-In Retained Held in Treasury Total
Shares Amount Capital Earnings Trust Stock
AOCI⁽¹⁾
NCI⁽²⁾
Equity
December 31, 2019 51,549,654
$ 0.5
1,962.8
3,588.3
(5.7 ) —
(427.8 ) 86.6
$ 5,204.7
Net income —
—
—
5.3
—
—
—
12.3
17.6
Shares issued under stock-based compensation programs 363,308
—
4.4
—
—
—
—
—
4.4
Shares repurchased for payment of taxes on stock-based compensation (102,370 ) —
(16.2 ) —
—
—
—
—
(16.2 )
Amortization of stock-based compensation —
—
18.6
—
—
—
—
—
18.6
Shares held in trust —
—
—
—
0.1
—
—
—
0.1
Cumulative effect from adoption of new accounting for credit losses —
—
—
(14.9 ) —
—
—
—
(14.9 )
Repurchase of common stock (187,753 ) —
—
—
—
(25.0 ) —
—
(25.0 )
Foreign currency translation adjustments —
—
—
—
—
—
(143.4 ) —
(143.4 )
Decrease in amounts attributable to noncontrolling interest —
—
—
—
—
—
—
(17.0 ) (17.0 )
March 31, 2020 51,622,839
$ 0.5
1,969.6
3,578.7
(5.6 ) (25.0 ) (571.2 ) 81.9
$ 5,028.9


	Company Shareholder's Equity

				Additional		Shares
(in millions, except share and per share data) (unaudited)	Common Stock			Paid-In	Retained	Held in	Treasury			Total
	Shares	Amount		Capital	Earnings	Trust	Stock	AOCI(1)	NCI(2)	Equity
December 31, 2019	51,549,654	$	0.5	1,962.8	3,588.3	(5.7)	0	(427.8)	86.6	$	5,204.7
Net income	—	—		—	5.3	—	—	—	12.3	17.6
Shares issued under stock-based compensation programs	363,308	—		4.4	—	—	—	—	—	4.4
Shares repurchased for payment of taxes on stock-based compensation	(102,370)	—		(16.2)	—	—	—	—	—	(16.2)
Amortization of stock-based compensation	—	—		18.6	—	—	—	—	—	18.6
Shares held in trust	—	—		—	—	0.1	—	—	—	0.1
Cumulative effect from adoption of new accounting for credit losses	—	—		—	(14.9)	—	—	—	—	(14.9)

Repurchase of common stock	(187,753)	—		—	—	—	(25.0)	—	—	(25.0)
Foreign currency translation adjustments	—	—		—	—	—	—	(143.4)	—	(143.4)
Decrease in amounts attributable to noncontrolling interest	—	—		—	—	—	—	—	(17.0)	(17.0)

March 31, 2020	51,622,839	$	0.5	1,969.6	3,578.7	(5.6)	(25.0)	(571.2)	81.9	$	5,028.9

(1) AOCI: Accumulated other comprehensive income (loss)

(2) NCI: Noncontrolling interest

Company Shareholder's Equity
Accumulated
Additional Shares Other
(in millions, except share and
per share data) (unaudited) Common Stock Paid-In Retained Held in Comprehensive Noncontrolling Total
Shares Amount Capital Earnings Trust Loss Interest Equity
December 31, 2018 45,599,418
$ 0.5
1,057.3
3,095.7
(5.8 ) (456.2 ) 43.0
$ 3,734.5
Net income —
—
—
21.3
—
—
(0.1 ) 21.2
Shares issued under stock-based compensation programs 198,575
—
2.0
—
—
—
—
2.0
Shares repurchased for payment of taxes on stock-based compensation (58,750 ) —
(9.7 ) —
—
—
—
(9.7 )
Amortization of stock-based compensation —
—
7.0
—
—
—
—
7.0
Change in pension liabilities, net of tax —
—
—
—
—
(1.0 ) —
(1.0 )
Foreign currency translation adjustments —
—
—
—
—
31.3
—
31.3
Increase in amounts attributable to noncontrolling interest —
—
—
—
—
—
9.8
9.8
March 31, 2019 45,739,243
$ 0.5
1,056.6
3,117.0
(5.8 ) (425.9 ) 52.7
$ 3,795.1

See accompanying notes to Condensed Consolidated Financial Statements.

Table of Contents

JONES LANG LASALLE INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31,
(in millions) (unaudited) 2020 2019
Cash flows used in operating activities:
Net income $ 17.6
21.2
Adjustments to reconcile net income to net cash used in operating activities:

Distributions of earnings from real estate ventures 3.6
3.0
Other adjustments, net 132.2
37.5
Changes in working capital, net (699.5 ) (613.2 )
Net cash used in operating activities (546.1 ) (551.5 )
Cash flows used in investing activities:

Net capital additions – property and equipment (44.4 ) (44.6 )
Net investment asset activity (less than wholly-owned) (3.2 ) (15.6 )
Business acquisitions, net of cash acquired —
(26.7 )
Capital contributions to real estate ventures (54.0 ) (11.0 )
Distributions of capital from real estate ventures 13.4
7.6
Other, net (2.3 ) (0.7 )
Net cash used in investing activities (90.5 ) (91.0 )
Cash flows provided by financing activities:

Proceeds from borrowings under credit facility 2,555.0
1,279.0
Repayments of borrowings under credit facility (1,630.0 ) (754.1 )
Net proceeds from short-term borrowings 6.6
86.3
Payments of deferred business acquisition obligations and earn-outs (9.8 ) (24.5 )
Repurchase of common stock (25.0 ) —
Other, net (13.5 ) 6.1
Net cash provided by financing activities 883.3
592.8
Effect of currency exchange rate changes on cash, cash equivalents and restricted cash (21.1 ) 0.7
Net change in cash, cash equivalents and restricted cash 225.6
(49.0 )
Cash, cash equivalents and restricted cash, beginning of the period 652.1
634.2
Cash, cash equivalents and restricted cash, end of the period $ 877.7
585.2
Supplemental disclosure of cash flow information:

Restricted cash, beginning of period $ 200.2
153.3
Restricted cash, end of period 157.0
195.7
Cash paid during the period for:

Interest $ 9.3
4.3
Income taxes, net of refunds 44.4
37.5
Operating leases 47.1
41.1
Non-cash activities:

Business acquisitions (including contingent consideration) $ —
1.5
Deferred business acquisition obligations —
6.5


	Three Months Ended March 31,
(in millions) (unaudited)	2021		2020
Cash flows from operating activities:
Net income	$	102.4	17.6
Reconciliation of net income to net cash provided by operating activities:
Depreciation and amortization	53.0		55.0
Equity (earnings) losses	(48.5)		28.3
Net gain on dispositions	(11.4)		0
Distributions of earnings from real estate ventures	0.4		3.6
Provision for loss on receivables and other assets	(0.5)		38.1
Amortization of stock-based compensation	17.5		18.6
Net non-cash mortgage servicing rights and mortgage banking derivative activity	(9.7)		1.6
Accretion of interest and amortization of debt issuance costs	1.2		1.4
Other, net	(3.9)		(10.8)
Change in:
Receivables	154.0		250.4
Reimbursable receivables and reimbursable payables	(107.6)		(58.7)
Prepaid expenses and other assets	(32.4)		(45.9)
Deferred tax assets, net	(2.7)		(5.5)
Accounts payable and accrued liabilities	(189.2)		(187.8)
Accrued Compensation	(384.4)		(652.0)
Net cash used in operating activities	(461.8)		(546.1)
Cash flows from investing activities:
Net capital additions – property and equipment	(34.6)		(44.4)
Net investment asset activity (less than wholly-owned)	(37.2)		(3.2)

Business acquisitions, net of cash acquired	(0.2)		0

Capital contributions to real estate ventures	(33.8)		(54.0)
Distributions of capital from real estate ventures	4.0		13.4
Other, net	4.0		(2.3)
Net cash used in investing activities	(97.8)		(90.5)
Cash flows from financing activities:

Proceeds from borrowings under credit facility	1,242.0		2,555.0
Repayments of borrowings under credit facility	(892.0)		(1,630.0)
Net proceeds from (repayments of) short-term borrowings	36.8		6.6
Payments of deferred business acquisition obligations and earn-outs	(21.0)		(9.8)



Repurchase of common stock	0		(25.0)






Other, net	10.9		(13.5)
Net cash provided by financing activities	376.7		883.3
Effect of currency exchange rate changes on cash, cash equivalents and restricted cash	(12.4)		(21.1)
Net change in cash, cash equivalents and restricted cash	(195.3)		225.6
Cash, cash equivalents and restricted cash, beginning of the period	839.8		652.1
Cash, cash equivalents and restricted cash, end of the period	$	644.5	877.7
Supplemental disclosure of cash flow information:
Restricted cash, beginning of period	$	265.5	200.2
Restricted cash, end of period	187.9		157.0
Cash paid during the period for:
Interest	$	4.5	9.3
Income taxes, net of refunds	30.5		44.4
Operating leases	49.0		47.1
Non-cash activities:
Business acquisitions (including contingent consideration)	$	3.8	0
Non-cash consideration received for disposition	23.9		0

See accompanying notes to Condensed Consolidated Financial Statements.

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JONES LANG LASALLE INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


1.	~~INTERIM INFORMATION~~

1.INTERIM INFORMATION

Readers of this quarterly report should refer to the audited financial statements of Jones Lang LaSalle Incorporated ("JLL," which may also be referred to as "the Company" or as "we," "us" or "our") for the year ended December 31, ~~2019,~~2020, which are included in our ~~2019~~2020 Annual Report on Form 10-K, filed with the United States Securities and Exchange Commission ("SEC") and also available on our website (~~www.us.jll.com~~www.jll.com), since we have omitted from this quarterly report certain footnote disclosures which would substantially duplicate those contained in such audited financial statements. You should also refer to the "Summary of Critical Accounting Policies and Estimates" section within Item 7. Management's Discussion and Analysis of Financial Condition and ~~Result~~Results of Operations and to Note 2, Summary of Significant Accounting Policies, in the Notes to Consolidated Financial Statements in our ~~2019~~2020 Annual Report on Form 10-K for further discussion of our significant accounting policies and estimates.

Our Condensed Consolidated Financial Statements as of March 31, ~~2020,~~2021, and for the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, are unaudited. In the opinion of management, we have included all adjustments (consisting solely of normal recurring adjustments) necessary for a fair presentation of the Condensed Consolidated Financial Statements for these interim periods.

Historically, our quarterly revenue and profits have tended to increase from quarter to quarter as the year progresses. This is the result of a general focus in the real estate industry on completing transactions by calendar year end, while certain expenses are recognized evenly throughout the year. Our LaSalle Investment Management ("LaSalle") segment generally earns investment-generated performance fees on clients' real estate investment returns when assets are sold, the timing of which is geared toward the benefit of our clients, as well as co-investment equity gains and losses, primarily dependent on underlying valuations. Within our Real Estate Services ("RES") segments, revenue from transaction-based activities (e.g. leasing and capital markets) is driven by the size and timing of our clients' transactions and can fluctuate significantly from period to period. In 2020 and the three months ended March 31, 2021, macroeconomic conditions influenced by the COVID-19 pandemic impacted the historical seasonality of our revenue and profits and may continue to do so during the remainder of 2021.

A significant portion of our compensation and benefits expense is from incentive compensation plans, which we generally accrue throughout the year based on progress toward annual performance targets. This process can result in significant fluctuations in quarterly compensation and benefits expense from period to period. Non-variable operating expenses, which we recognize when incurred during the year, are relatively constant on a quarterly basis.

We provide for the effects of income taxes on interim financial statements based on our estimate of the effective tax rate for the full year, which we base on forecasted income by country and expected enacted tax ~~rates; as~~rates. As required, we adjust for the impact of discrete items in the quarters in which they occur. Changes in the geographic mix of income ~~including as a result of the COVID-19 pandemic,~~ can impact our estimated effective tax rate.

As a result of the items mentioned above, the results for the periods ended March 31 are not fully indicative of what our results will be for the full fiscal year.

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2.NEW ACCOUNTING STANDARDS


2.	~~NEW ACCOUNTING STANDARDS~~

Recently adopted accounting guidance

In ~~June 2016,~~January 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") ~~No. 2016-13,~~2020‑01, ~~Financial Instruments - Credit Losses (ASC Topic 326)~~Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815), which, ~~created~~among other things, clarifies that a ~~new framework~~company should consider observable transactions that require a company to ~~evaluate financial instruments, such as trade receivables,~~either apply or discontinue the equity method of accounting under Topic 323 and clarifies that, when determining the accounting for ~~expected credit losses.~~certain forward contracts and purchased options a company should not consider, whether upon settlement or exercise, if the underlying securities would be accounted for under the equity method or fair value option. This ~~new framework replaced the existing incurred loss approach~~ASU is effective for annual and ~~is expected to result in more timely recognition of credit losses. On January 1,~~interim periods beginning after December 15, 2020, ~~we adopted ASU No. 2016-13 using a modified-retrospective approach, as required by the ASU.~~

with early adoption permitted. The adoption impacted our methodology of reserving for (i) Trade receivables, (ii) other receivable-related financial assets, specifically contract assets, and (iii) off-balance sheet credit exposures within the scope of this ~~ASU. Specifically, we evaluated~~guidance did not impact our ~~historical reserve balances for Trade receivables~~financial statements and ~~the~~ related write-off activity and developed a forward-looking process for adoption. We also evaluated our loss-sharing guarantee obligation for certain mortgage loans we originate, sell and retain the servicing rights. The following sections discuss our updated reserve methodologies.disclosures.

~~Trade Receivables~~

We estimate an allowance to provide for uncollectible accounts receivable, which is applied upon recognition of the receivable. We base this estimate on historical experience combined with a review of the receivable aging, current and expected economic conditions, and client credit quality. The estimate also includes specifically identified amounts for which payment has become unlikely. For receivables with lives of less than one year, changes to economic conditions are not expected to have a significant impact on our estimate of expected credit losses. However, we will monitor economic conditions on a quarterly basis to determine if any adjustments are deemed necessary.

~~Notes and Other Receivables and Long-Term Receivables~~

We make ongoing assessments of the collectability of outstanding Notes and other receivables and Long-term receivables, considering both objective and subjective factors such as the age profile of outstanding balances, the contractual terms of repayment, and credit quality. Aspects of credit quality considered in our assessments of collectability include historical experience, current and expected economic conditions, and our broader business relationship with the obligor. We record an allowance against the outstanding balance when our assessments determine payment has become unlikely. After all collection efforts have been exhausted by management, the outstanding balance is written off against the reserve. Historically, credit quality deterioration to the point of impairment or non-performance in our Notes and other receivables and Long-term receivables has been limited and has not had a material impact on the Condensed Consolidated Financial Statements.

~~Reimbursable Receivables~~

We record an allowance based on specific identification of an uncollectible reimbursable receivable, considering current and future economic conditions as well as client credit quality. Historically, we have not experienced any material collection issues and, as such, have not applied a formulaic reserve to these receivables.

~~Contract Assets~~

Contract assets include amounts recognized as revenue for which we are not yet entitled to payment for reasons other than the passage of time, but that do not constrain revenue recognition. Historically, we have not recognized a provision for contract assets. Under ASC Topic 326, we include Contract assets in our reserving process and assess the risk of loss similar to our methodology for Trade receivables, since Contract assets are reclassified to Trade receivables when we become entitled to payment. Accordingly, a reserve is applied upon recognition of the contract asset.

~~Financial Guarantees~~

Certain loans we originate and sell under the Fannie Mae Delegated Underwriting and Servicing (“DUS”) program retain a percentage of the risk of loss. This loss-sharing aspect of the program represents an off-balance sheet credit exposure, and we have established a contingent reserve ("loan loss guarantee reserve") for this risk in accordance with ASC Topic 326. To estimate the reserve, we use a model that analyzes historical losses, current and expected economic conditions, and reasonable and supportable forecasts. The model also considers specific details of the underlying property used as collateral, such as occupancy and financial performance. The loan loss guarantee reserve is calculated on an individual loan level. For the period ended March 31, 2020, the inputs to the model incorporated specific economic conditions related to the COVID-19

~~Table of Contents~~

pandemic that resulted in a notable increase to our loan loss guarantee reserve. As of March 31, 2020, the loan loss guarantee reserve was $45.7 million and was included within Other liabilities on the Condensed Consolidated Balance Sheets.

~~The loss-sharing guarantee obligation (in accordance with ASC Topic 460,~~ 3.~~Guarantees~~) represents the non-contingent obligation incurred as a result of issuing a loss-sharing guarantee as part of our participation in the DUS program and is separate from the loan loss guarantee reserve discussed above. See Note 10, Commitments and Contingencies, for further information on the DUS program and the loss-sharing guarantee obligation.REVENUE RECOGNITION

~~The following table details the cumulative impact to retained earnings upon adoption of ASC Topic 326.~~

Published Adjustment due to As Reported Under
December 31, 2019 adoption of ASC Topic 326 on January 1, 2020
(in millions) (audited) ASC Topic 326 (unaudited)
Assets
Allowance for trade receivables $ (68.1 ) (3.6 ) $ (71.7 )
Deferred tax assets, net 245.4
5.5
250.9
Allowance for contract assets ⁽¹⁾
—
(1.7 ) (1.7 )
Liabilities and equity
Loan loss guarantee reserve ⁽²⁾
$ —
15.1
$ 15.1
Retained earnings 3,588.3
(14.9 ) 3,573.4

¹~~The portion of the allowance for long-term contract assets is included within Other assets on the Condensed Consolidated Balance Sheets.~~

²~~Included within Other liabilities on the Condensed Consolidated Balance Sheets~~


3.	~~REVENUE RECOGNITION~~

Revenue excluded from the scope of ASC Topic 606 - Our mortgage banking and servicing operations - such as Mortgage Servicing Rights ("MSR")-related activity, loan origination fees, and servicing income - are excluded from the scope of ASC Topic 606. Such revenue was included entirely within Americas Capital Markets and is presented below.

Three months Ended March 31,
(in millions) 2020 2019
Revenue excluded from scope of ASC Topic 606 $ 49.3
31.0


	Three months Ended March 31,
(in millions)		2021		2020
Revenue excluded from scope of ASC Topic 606		$	70.2	49.3

Contract assets and liabilities - ~~As of March 31, 2020 and December 31, 2019, we had $414.7 million and $419.3 million of~~Our contract assets, net of allowance, ~~respectively, which~~ are included in Short-term contract assets and Other assets ~~on the Condensed Consolidated Balance Sheets.~~

~~Contract liabilities~~ ~~- As of March 31, 2020~~ and ~~December 31, 2019, we had $88.4 million and $87.7 million of~~our contract liabilities ~~respectively, which~~ are included in Short-term contract liabilities and deferred income on our Condensed Consolidated Balance Sheets. The majority of contract liabilities are recognized as revenue within 90 days. Such contract assets and liabilities are presented below.


(in millions)	March 31, 2021		December 31, 2020
Contract assets, gross	$	348.3	347.8
Contract asset allowance	(2.4)		(2.1)
Contract assets, net	$	345.9	345.7

Contract liabilities	$	105.4	111.0

Remaining performance obligations - Remaining performance obligations represent the aggregate transaction price for contracts where our performance obligations have not yet been satisfied. As of March 31, ~~2020,~~2021, the aggregate amount of transaction price allocated to remaining performance obligations represented less than 5% of our total revenue. In accordance with ASC Topic 606, excluded from the aforementioned remaining performance obligations are (i) amounts attributable to contracts expected to be completed within 12 months and (ii) variable consideration for services performed as a series of daily performance obligations, such as facilities management, property management, and LaSalle contracts. Contracts within these businesses represent a significant portion of our contracts with customers not expected to be completed within 12 months.

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4.BUSINESS SEGMENTS


4.	~~BUSINESS SEGMENTS~~

We manage and report our operations as four business segments:

The three geographic regions of RES including:

(1) Americas,

(2) Europe, Middle East and Africa ("EMEA"), and

(3) Asia Pacific;

and

(4) LaSalle.

Each geographic region offers our full range of real estate services, including agency leasing and tenant representation, capital markets, property and facility management, project and development management, energy management and sustainability, construction management, and advisory, consulting and valuation services. LaSalle provides investment management services on a global basis to institutional investors and high-net-worth individuals.

~~Operating income represents total revenue less direct and allocated indirect expenses.~~ We allocate all indirect expenses to our segments, other than interest and income taxes, as nearly all expenses incurred benefit one or more of the segments. Allocated expenses primarily consist of corporate global overhead, which we allocate to the business segments based on the budgeted operating expenses of each segment.

~~For segment reporting, (a) gross contract costs~~Segment income does not include (i) restructuring and ~~(b)~~acquisition charges, (ii) interest expense, net ~~non-cash MSR~~of interest income, (iii) other income, and ~~mortgage banking derivative activity~~(iv) provision for income tax, which are both excluded from revenue in determining "fee revenue". Gross contract costs are excluded from operating expenses in determining "fee-based operating expenses". Excluding these costs from revenue and expenses results in a net presentation which we believe more accurately reflects how we manage our expense base, operating margins, and performance. Refer to Results of Operations,otherwise included in ~~Item 2. Management's Discussion and Analysis~~Net income on the Consolidated Statements of ~~Financial Condition and Results of Operations, for a full description of gross contract costs. In addition, our measure of segment results excludes Restructuring and acquisition charges.~~Comprehensive Income.

The Chief Operating Decision Maker of JLL measures and evaluates the segment results ~~excluding (a) gross contract costs, (b) net non-cash MSR~~based on Segment income for purposes of making decisions about allocating resources and mortgage banking derivative activity, and (c) Restructuring and acquisition charges. As of March 31, 2020, we define the Chief Operating Decision Maker collectively as our Global Executive Board, which comprises the following:assessing performance.



~~• Chief Executive Officer and President~~	~~• Chief Executive Officers of each of our four business segments~~
~~• Chief Financial Officer~~	~~• Chief Executive Officer of Corporate Solutions~~
~~• Chief Administrative Officer~~	~~• Chief Executive Officer of Capital Markets~~
	~~• Co-Chief Executive Officers of JLL Technologies~~

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~~Summarized financial information by business segment is as follows.~~

Three Months Ended March 31,
(in millions) 2020 2019
Americas - Real Estate Services
Leasing $ 418.9
389.8
Capital Markets 247.4
100.1
Property & Facility Management 1,458.8
1,362.0
Project & Development Services 306.4
308.7
Advisory, Consulting and Other 91.6
89.5
Revenue 2,523.1
2,250.1
Reimbursements (1,393.5 ) (1,351.4 )
Revenue before reimbursements 1,129.6
898.7
Gross contract costs (212.8 ) (187.7 )
Net non-cash MSR and mortgage banking derivative activity 1.6
0.1
Fee revenue 918.4
711.1
Operating expenses, excluding reimbursed expenses:

Compensation, operating and administrative expenses 1,010.3
810.8
Depreciation and amortization 37.4
27.3
Segment operating expenses, excluding reimbursed expenses 1,047.7
838.1
Gross contract costs (212.8 ) (187.7 )
Fee-based segment operating expenses 834.9
650.4
Segment operating income $ 81.9
60.6
Equity earnings (losses) 12.7
(0.3 )
Segment income $ 94.6
60.3

EMEA - Real Estate Services
Leasing $ 48.1
52.2
Capital Markets 73.2
64.0
Property & Facility Management 375.0
369.3
Project & Development Services 203.2
180.5
Advisory, Consulting and Other 56.4
57.4
Revenue 755.9
723.4
Reimbursements (182.8 ) (164.6 )
Revenue before reimbursements 573.1
558.8
Gross contract costs (262.6 ) (242.7 )
Fee revenue 310.5
316.1
Operating expenses, excluding reimbursed expenses:
Compensation, operating and administrative expenses 584.4
576.9
Depreciation and amortization 9.2
11.3
Segment operating expenses, excluding reimbursed expenses 593.6
588.2
Gross contract costs (262.6 ) (242.7 )
Fee-based segment operating expenses 331.0
345.5
Segment operating loss $ (20.5 ) (29.4 )
Equity earnings —
0.1
Segment loss $ (20.5 ) (29.3 )

~~Table of Contents~~

~~Continued:~~ Summarized financial information by business segment is as follows.

Three Months Ended March 31,
(in millions) 2020 2019
Asia Pacific - Real Estate Services
Leasing $ 25.4
35.9
Capital Markets 21.7
29.4
Property & Facility Management 532.0
537.8
Project & Development Services 94.8
110.9
Advisory, Consulting and Other 38.2
34.7
Revenue 712.1
748.7
Reimbursements (284.9 ) (341.1 )
Revenue before reimbursements 427.2
407.6
Gross contract costs (249.5 ) (209.4 )
Fee revenue 177.7
198.2
Operating expenses, excluding reimbursed expenses:
Compensation, operating and administrative expenses 417.5
400.5
Depreciation and amortization 6.6
6.4
Segment operating expenses, excluding reimbursed expenses 424.1
406.9
Gross contract costs (249.5 ) (209.4 )
Fee-based segment operating expenses 174.6
197.5
Segment operating income $ 3.1
0.7
Equity (losses) earnings (0.7 ) 0.3
Segment income $ 2.4
1.0

LaSalle
Advisory fees $ 85.6
77.6
Transaction fees & other 13.6
13.2
Incentive fees 5.7
7.6
Revenue 104.9
98.4
Reimbursements (1.8 ) (1.9 )
Revenue before reimbursements 103.1
96.5
Gross contract costs (4.5 ) (2.8 )
Fee revenue 98.6
93.7
Operating expenses, excluding reimbursed expenses:
Compensation, operating and administrative expenses 87.1
82.9
Depreciation and amortization 1.8
1.5
Segment operating expenses, excluding reimbursed expenses 88.9
84.4
Gross contract costs (4.5 ) (2.8 )
Fee-based segment operating expenses 84.4
81.6
Segment operating income $ 14.2
12.1
Equity (losses) earnings (40.3 ) 4.9
Segment (loss) income $ (26.1 ) 17.0


	Three Months Ended March 31,
(in millions)		2021		2020
Americas
Leasing		$	363.7	418.9
Capital Markets		216.9		247.4
Property & Facility Management		1,494.8		1,458.8
Project & Development Services		269.8		306.4
Advisory, Consulting and Other		98.7		91.6
Revenue		$	2,443.9	2,523.1
Depreciation and amortization		$	33.1	37.4

Equity earnings		$	34.5	12.7
Segment income		$	145.0	94.6

EMEA
Leasing		$	54.4	48.1
Capital Markets		74.2		73.2
Property & Facility Management		344.1		375.0
Project & Development Services		183.7		203.2
Advisory, Consulting and Other		59.8		56.4
Revenue		$	716.2	755.9
Depreciation and amortization		$	10.9	9.2

Equity earnings		$	0	0
Segment loss		$	(35.8)	(20.5)

Asia Pacific
Leasing		$	31.4	25.4
Capital Markets		29.3		21.7
Property & Facility Management		575.1		532.0
Project & Development Services		98.3		94.8
Advisory, Consulting and Other		51.7		38.2
Revenue		$	785.8	712.1
Depreciation and amortization		$	7.3	6.6

Equity earnings (losses)		$	1.0	(0.7)
Segment income		$	17.8	2.4

LaSalle
Advisory fees		$	83.5	85.6
Transaction fees & other		7.7		13.6
Incentive fees		0		5.7
Revenue		$	91.2	104.9
Depreciation and amortization		$	1.7	1.8

Equity earnings (losses)		$	13.0	(40.3)
Segment income (loss)		$	19.4	(26.1)

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The following table is a reconciliation of Segment income to consolidated Operating income.


	Three Months Ended March 31,
(in millions)		2021		2020
Segment income - Americas		$	145.0	94.6
Segment loss - EMEA		(35.8)		(20.5)
Segment income - APAC		17.8		2.4
Segment income (loss) - LaSalle		19.4		(26.1)

Less: Equity (earnings) losses		(48.5)		28.3
Add: Restructuring and acquisition charges		(17.2)		(14.1)
Operating income		$	80.7	64.6

Three Months Ended March 31,
(in millions) 2020 2019
Segment Reconciling Items
Fee revenue $ 1,505.2
1,319.1
Gross contract costs 729.4
642.6
Net non-cash MSR and mortgage banking derivative activity (1.6 ) (0.1 )
Revenue before reimbursements 2,233.0
1,961.6
Reimbursements 1,863.0
1,859.0
Revenue $ 4,096.0
3,820.6
Total segment operating expenses, excluding reimbursed expenses & before restructuring and acquisition charges $ 2,154.3
1,917.6
Reimbursed expenses 1,863.0
1,859.0
Total segment operating expenses before restructuring and acquisition charges $ 4,017.3
3,776.6
Operating income before restructuring and acquisition charges $ 78.7
44.0
Less: Restructuring and acquisition charges 14.1
18.6
Operating income $ 64.6
25.4

5.BUSINESS COMBINATIONS, GOODWILL AND OTHER INTANGIBLE ASSETS


5.	~~BUSINESS COMBINATIONS, GOODWILL AND OTHER INTANGIBLE ASSETS~~

~~2020~~2021 Business Combinations Activity

During the three months ended March 31, ~~2020,~~2021, we ~~completed no new acquisitions and~~ paid ~~$12.9~~$26.2 million for deferred business acquisition and earn-out obligations for acquisitions completed in prior years.

~~2019~~2020 Business ~~Combination~~Combinations Activity

During the ~~three months~~year ended ~~March~~December 31, 2020 we ~~made~~completed no adjustments to our preliminary allocation of the purchase consideration for certain acquisitions completed in 2019. As of March 31, 2020, we have completed our analysis to assign fair values to all the identifiable intangible and tangible assets acquired for our 2019 acquisitions, with the exception of tax-related accounts with respect to our acquisition of HFF, Inc.new acquisitions.

Earn-Out Payments


($ in millions)	March 31, 2020		December 31, 2019		($ in millions)	March 31, 2021		December 31, 2020
Number of acquisitions with earn-out payments subject to the achievement of certain performance criteria	44		44		Number of acquisitions with earn-out payments subject to the achievement of certain performance criteria	24		35
Maximum earn-out payments (undiscounted)	$	254.0	$	268.9	Maximum earn-out payments (undiscounted)	$	157.8	$	199.2
Short-term earn-out liabilities (fair value)¹	48.8		53.9
Long-term earn-out liabilities (fair value)¹	81.2		94.5
Short-term earn-out liabilities (fair value)(1)					Short-term earn-out liabilities (fair value)(1)	59.9		77.2
Long-term earn-out liabilities (fair value)(1)					Long-term earn-out liabilities (fair value)(1)	8.3		8.5

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 five years. Refer to Note 8, Fair Value Measurements, and Note 11, Restructuring and Acquisition Charges, for additional discussion of our earn-out liabilities.

Goodwill and Other Intangible Assets

Goodwill and unamortized intangibles as of March 31, ~~2020~~2021 consisted of: (1) goodwill of ~~$4,104.3~~$4,201.7 million, (2) identifiable intangibles of ~~$608.7~~$634.9 million amortized over their remaining finite useful lives, and (3) ~~$50.0~~$52.1 million of identifiable intangibles with indefinite useful lives that are not amortized. Notable 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.

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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, 2020	$	2,878.0	959.7	329.2	57.8	$	4,224.7

Dispositions	(11.0)		(0.7)	0	0	(11.7)
Impact of exchange rate movements	0.3		(8.6)	(3.0)	0	(11.3)
Balance as of March 31, 2021	$	2,867.3	950.4	326.2	57.8	$	4,201.7

Real Estate Services
(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
Impact of exchange rate movements (2.9 ) (46.6 ) (13.4 ) (1.0 ) (63.9 )
Balance as of March 31, 2020 $ 2,874.7
869.3
304.2
56.1
$ 4,104.3

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 3.0
—
—
32.8
35.8
Impact of exchange rate movements 0.6
3.9
0.7
(0.5 ) 4.7
Balance as of March 31, 2019 $ 1,455.6
910.7
317.5
54.5
$ 2,738.3


	Real Estate Services
(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


Impact of exchange rate movements	(2.9)		(46.6)	(13.4)	(1.0)	(63.9)
Balance as of March 31, 2020	$	2,874.7	869.3	304.2	56.1	$	4,104.3

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, 2020	$	572.1	265.8	55.7	23.6	57.9	$	975.1
Additions, net of adjustments (1)	40.0		0	3.8	0	0	43.8
Adjustment for fully amortized intangibles	(6.7)		(7.9)	(0.9)	(2.2)	0	(17.7)

Impact of exchange rate movements	0		0.1	0.2	(0.4)	(1.8)	(1.9)
Balance as of March 31, 2021	$	605.4	258.0	58.8	21.0	56.1	$	999.3

Accumulated Amortization
Balance as of December 31, 2020	$	(147.8)	(94.1)	(39.5)	(8.6)	(5.3)	$	(295.3)
Amortization, net (2)	(21.6)		(10.5)	(1.8)	(0.3)	(0.4)	(34.6)
Adjustment for fully amortized intangibles	6.7		7.9	0.9	2.2	0	17.7

Impact of exchange rate movements	0		0	(0.1)	0.1	(0.1)	(0.1)
Balance as of March 31, 2021	$	(162.7)	(96.7)	(40.5)	(6.6)	(5.8)	$	(312.3)

Net book value as of March 31, 2021	$	442.7	161.3	18.3	14.4	50.3	$	687.0

MSRs 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⁾
16.9
—
—
0.5
—
17.4
Adjustment for fully amortized intangibles (12.7 ) —
(0.2 ) —
—
(12.9 )
Impact of exchange rate movements —
(0.5 ) (3.4 ) (2.1 ) (1.1 ) (7.1 )
Balance as of March 31, 2020 $ 484.6
285.2
52.3
19.8
52.9
$ 894.8

Accumulated Amortization

Balance as of December 31, 2019 $ (104.0 ) (68.3 ) (33.1 ) (6.7 ) (2.7 ) $ (214.8 )
Amortization, net ⁽²⁾
(22.6 ) (11.6 ) (1.8 ) (0.4 ) (0.7 ) (37.1 )
Adjustment for fully amortized intangibles 12.7
—
0.2
—
—
12.9
Impact of exchange rate movements —
0.2
2.1
0.5
0.1
2.9
Balance as of March 31, 2020 $ (113.9 ) (79.7 ) (32.6 ) (6.6 ) (3.3 ) $ (236.1 )

Net book value as of March 31, 2020 $ 370.7
205.5
19.7
13.2
49.6
$ 658.7

(1) Included in this amount for MSRs was ~~$5.9~~(i) $3.1 million relating to prepayments/write-offs due to prepayments of the underlying obligation for which we assumed, acquired or retained the servicing rights.

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

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	MSRs			Other Intangibles												MSRs		Other Intangibles
(in millions)	Americas			Americas		EMEA		Asia Pacific		LaSalle		Consolidated			(in millions)	Americas		Americas	EMEA	Asia Pacific	LaSalle	Consolidated
Gross Carrying Amount															Gross Carrying Amount
Balance as of December 31, 2018	$	266.2		90.0		83.1		23.5		43.9		$	506.7
Balance as of December 31, 2019															Balance as of December 31, 2019	$	480.4	285.7	55.9	21.4	54.0	$	897.4
Additions, net of adjustments ⁽¹⁾	8.1			0.9		—		—		9.2		18.2			Additions, net of adjustments (1)	16.9		0	0	0.5	0	17.4
Adjustment for fully amortized intangibles	(4.4		)	—		—		—		—		(4.4		)	Adjustment for fully amortized intangibles	(12.7)		0	(0.2)	0	0	(12.9)

Impact of exchange rate movements	—			0.1		1.0		0.2		—		1.3			Impact of exchange rate movements	0		(0.5)	(3.4)	(2.1)	(1.1)	(7.1)
Balance as of March 31, 2019	$	269.9		91.0		84.1		23.7		53.1		$	521.8
Balance as of March 31, 2020															Balance as of March 31, 2020	$	484.6	285.2	52.3	19.8	52.9	$	894.8

Accumulated Amortization															Accumulated Amortization
Balance as of December 31, 2018	$	(72.4	)	(38.8	)	(51.8	)	(6.8	)	—		$	(169.8	)
Balance as of December 31, 2019															Balance as of December 31, 2019	$	(104.0)	(68.3)	(33.1)	(6.7)	(2.7)	$	(214.8)
Amortization, net⁽²⁾	(9.7		)	(3.6	)	(2.7	)	(0.6	)	(0.7	)	(17.3		)	Amortization, net (2)	(22.6)		(11.6)	(1.8)	(0.4)	(0.7)	(37.1)
Adjustment for fully amortized intangibles	4.4			—		—		—		—		4.4			Adjustment for fully amortized intangibles	12.7		0	0.2	0	0	12.9

Impact of exchange rate movements	—			—		(0.4	)	—		—		(0.4		)	Impact of exchange rate movements	0		0.2	2.1	0.5	0.1	2.9
Balance as of March 31, 2019	$	(77.7	)	(42.4	)	(54.9	)	(7.4	)	(0.7	)	$	(183.1	)
Balance as of March 31, 2020															Balance as of March 31, 2020	$	(113.9)	(79.7)	(32.6)	(6.6)	(3.3)	$	(236.1)

Net book value as of March 31, 2019	$	192.2		48.6		29.2		16.3		52.4		$	338.7
Net book value as of March 31, 2020															Net book value as of March 31, 2020	$	370.7	205.5	19.7	13.2	49.6	$	658.7

(1) Included in this amount for MSRs was ~~$1.9~~$5.9 million relating to prepayments/write-offs due to prepayments of the underlying obligation for which we assumed, acquired or 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 March 31, 2020, is presented in the following table.~~

(in millions) MSRs Other Intangibles Total
2020 (remaining 9 months) $ 49.1
40.9
$ 90.0
2021 62.1
48.6
110.7
2022 54.6
42.9
97.5
2023 47.6
40.5
88.1
2024 40.0
36.2
76.2
2025 32.5
18.9
51.4
Thereafter 84.8
10.0
94.8
Total $ 370.7
238.0
$ 608.7

6.INVESTMENTS IN REAL ESTATE VENTURES

~~Table of Contents~~


6.	~~INVESTMENTS IN REAL ESTATE VENTURES~~

As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, we had Investments in real estate ventures of ~~$390.8~~$545.1 million and ~~$404.2~~$430.8 million, respectively.

Approximately ~~85%~~90% of our investments, as of March 31, ~~2020,~~2021, are primarily (i) direct investments in 4650 separate property or commingled funds, where we co-invest alongside our clients and for which we also have an advisory ~~agreement. These also include~~agreement and (ii) investments by JLL ~~Spark~~Technologies in ~~property-technology funds and~~ early-stage proptech companies. The remaining ~~15%~~10% of our Investments in real estate ventures, as of March 31, ~~2020,~~2021, were attributable to investment vehicles that use our capital and outside capital primarily provided by institutional investors to invest, ~~primarily,~~generally, in certain real estate ventures that own and operate real estate. Of our investments attributable to investment vehicles, the majority was invested in LaSalle Investment Company II ("LIC II"), in which we held an effective ownership interest of 48.78%.

We have maximum potential unfunded commitments to direct investments or investment vehicles of ~~$309.0~~$309.9 million as of March 31, ~~2020.~~2021. Of this amount, while we remain contractually obligated, we do not expect a call on the $60.4 million ~~relates~~relating to our investment in LIC II ~~whose~~as its fund life terminated in January 2020.

We evaluate our less-than-wholly-owned investments to determine whether the underlying entities are classified as variable interest entities ("VIEs"); we assess each identified VIE to determine whether we are the primary beneficiary. We have determined that we are the primary beneficiary of certain VIEs and accordingly, we have consolidated such entities. The assets of the consolidated VIEs are available only for the settlement of the obligations of the respective entities and the mortgage loans of the consolidated VIEs are non-recourse to JLL.

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Summarized financial information for our consolidated VIEs is presented in the following tables.

(in millions) March 31, 2020 December 31, 2019
Property and equipment, net $ 128.3
126.3
Investments in real estate ventures 8.8
13.2
Other assets 12.5
14.3
Total assets $ 149.6
153.8
Other current liabilities $ 3.5
3.2
Mortgage indebtedness (included in Other liabilities) 69.7
69.7
Total liabilities 73.2
72.9
Members' equity (included in Noncontrolling interest) 76.4
80.9
Total liabilities and members' equity $ 149.6
153.8


(in millions)	March 31, 2021		December 31, 2020
Property and equipment, net	$	154.0	117.4
Investments in real estate ventures	9.2		9.0
Other assets	11.2		21.0
Total assets	$	174.4	147.4
Other current liabilities	$	1.8	1.9
Mortgage indebtedness (included in Other liabilities)	89.6		60.3
Total liabilities	91.4		62.2
Members' equity (included in Noncontrolling interest)	83.0		85.2
Total liabilities and members' equity	$	174.4	147.4


	Three Months Ended March 31,
(in millions)		2021		2020
Revenue		$	2.6	4.3
Operating and other expenses		(3.2)		(4.3)
Net gains on sale of investments(1)		0		12.2
Net (loss) income		$	(0.6)	12.2

Three Months Ended March 31,
(in millions) 2020 2019
Revenue $ 4.3
1.3
Operating and other expenses (4.3 ) (1.6 )
Net gains on sale of investments (included in Equity earnings) 12.2
—
Net income (loss) $ 12.2
(0.3 )

(1) The 2020 gain was included in Equity earnings.

We allocate the members' equity and net income of the consolidated VIEs to the noncontrolling interest holders as Noncontrolling interest on our Condensed Consolidated Balance Sheets and as Net income attributable to noncontrolling interest in our Condensed Consolidated Statements of Comprehensive Income, respectively.

Impairment

There were no significant other-than-temporary impairment charges on Investments in real estate ventures for the three months ended March 31, ~~2020~~2021 and ~~2019.~~

~~Table of Contents~~

2020.

Fair Value

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. The table below shows the movement in our investments in real estate ventures reported at fair value.

(in millions) 2020 2019
Fair value investments as of January 1, $ 328.6
247.3
Investments 28.9
10.5
Distributions (16.0 ) (2.8 )
Change in fair value (35.2 ) 4.3
Foreign currency translation adjustments, net (4.3 ) 0.3
Fair value investments as of March 31, $ 302.0
259.6


(in millions)	2021		2020
Fair value investments as of January 1,	$	340.3	328.6
Investments	55.8		28.9
Distributions	(3.3)		(16.0)
Change in fair value, net	45.7		(35.2)
Foreign currency translation adjustments, net	(3.1)		(4.3)
Fair value investments as of March 31,	$	435.4	302.0

See Note 8, Fair Value Measurements, for additional discussion of our investments in real estate ventures reported at fair value.

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7.	~~STOCK-BASED COMPENSATION~~

7.STOCK-BASED COMPENSATION

Stock Unit Awards

Restricted stock unit ("RSU") and performance stock unit ("PSU") awards activity is presented in the following tables.

RSU Shares
(in 000's) PSU Shares
(in 000's) Total Shares
(in 000's) Weighted Average
Grant Date
Fair Value
Weighted Average
Remaining
Contractual Life
(in years)
Unvested as of December 31, 2019 1,532.3
286.8
1,819.1
$ 141.51
2.39
Granted 9.7
—
9.7
160.03

Vested (324.6 ) —
(324.6 ) 136.91

Forfeited (8.5 ) —
(8.5 ) 137.68

Unvested as of March 31, 2020 1,208.9
286.8
1,495.7
$ 144.71
1.78

Unvested as of December 31, 2018 559.6
93.1
652.7
$ 131.32
2.02
Granted 74.7
—
74.7
152.84

Vested (195.5 ) —
(195.5 ) 114.79

Forfeited (4.5 ) (0.4 ) (4.9 ) 126.70

Unvested as of March 31, 2019 434.3
92.7
527.0
$ 140.55
2.15

During the three months ended March 31, 2020, we recognized a $5.5 million expense reversal to reflect our revised estimate of PSU achievement in response to the anticipated impact of the COVID-19 pandemic.


	RSU Shares (in 000's)	PSU Shares (in 000's)	Total Shares (in 000's)	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Life (in years)
Unvested as of December 31, 2020	1,096.2	531.5	1,627.7	$	137.42	1.69
Granted	56.6	0	56.6	145.93
Vested	(207.5)	(79.0)	(286.5)	150.76
Forfeited	(5.0)	(13.4)	(18.4)	149.11
Unvested as of March 31, 2021	940.3	439.1	1,379.4	$	134.84	1.70

Unvested as of December 31, 2019	1,532.3	286.8	1,819.1	$	141.51	2.39
Granted	9.7	0	9.7	160.03
Vested	(324.6)	0	(324.6)	136.91
Forfeited	(8.5)	0	(8.5)	137.68
Unvested as of March 31, 2020	1,208.9	286.8	1,495.7	$	144.71	1.78

As of March 31, ~~2020,~~2021, we had ~~$107.2~~$74.2 million of unamortized deferred compensation related to unvested RSUs and PSUs, which we anticipate recognizing over varying periods into ~~2024; $66.9~~2026; $24.1 million relates to the awards issued in conjunction with the HFF acquisition.

~~Table of Contents~~8.FAIR VALUE MEASUREMENTS


8.	~~FAIR VALUE MEASUREMENTS~~

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:

•Level 1 - Quoted prices for identical assets or liabilities in active markets accessible as of the measurement date;

•Level 2 - Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and

•Level 3 - Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

Financial Instruments

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 ~~$595.5~~$704.8 million and ~~$685.9~~$723.7 million as of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively, using dealer quotes that are Level 2 inputs in the fair value hierarchy. The carrying value of our Long-term debt was ~~$656.1~~$684.0 million and ~~$664.6~~$702.0 million as of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively, and included debt issuance costs of ~~$2.9~~$2.3 million and ~~$3.1~~$2.5 million, respectively.

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Investments in Real Estate Ventures at Fair Value - Net Asset Value ("NAV")

We report a significant portion 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.

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. As a result of the changes in market conditions from the COVID-19 pandemic, which occurred following the measurement dates used by investees to calculate NAV per share, we recognized a $36.3 million decrease in aggregate toIn instances where the reported NAV per share ~~for~~did not fully incorporate the ~~three months ended March 31, 2020.~~COVID-19 pandemic’s impact on the fair value of underlying investments, we recognized an adjustment to decrease the reported NAV. As of March 31, ~~2020~~2021, such adjustments totaled $9.3 million. We did not consider any other 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 (i) our understanding of the methodology utilized and inputs incorporated to estimate NAV at the investee level, (ii) consideration of market demand for the specific types of real estate assets held by each venture and (iii) contemplation of real estate and capital markets conditions in the localities in which these ventures operate. As of March 31, 2021 and December 31, ~~2019,~~2020, investments in real estate ventures at fair value using NAV were ~~$197.4~~$222.7 million and ~~$224.8~~$203.8 million, respectively. As these investments are not required to be classified in the fair value hierarchy, they have been excluded from the following table.

~~Table of Contents~~

Recurring Fair Value Measurements

The following table categorizes by level in the fair value hierarchy the estimated fair value of our assets and liabilities measured at fair value on a recurring basis.

March 31, 2020 December 31, 2019
(in millions) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Assets
Investments in real estate ventures - fair value $ 63.2
—
41.4
69.4
—
34.4
Foreign currency forward contracts receivable —
6.1
—
—
10.5
—
Warehouse receivables —
1,026.8
—
—
527.1
—
Deferred compensation plan assets —
374.2
—
—
349.9
—
Mortgage banking derivative assets —
—
118.2
—
—
36.1
Total assets at fair value $ 63.2
1,407.1
159.6
69.4
887.5
70.5
Liabilities
Foreign currency forward contracts payable $ —
6.2
—
—
4.4
—
Deferred compensation plan liabilities —
348.4
—
—
346.1
—
Earn-out liabilities —
—
130.0
—
—
148.5
Mortgage banking derivative liabilities —
—
182.2
—
—
25.9
Total liabilities at fair value $ —
354.6
312.2
—
350.5
174.4


	March 31, 2021				December 31, 2020
(in millions)	Level 1		Level 2	Level 3	Level 1	Level 2	Level 3
Assets
Investments in real estate ventures - fair value	$	72.6	0	140.1	77.2	0	59.3
Foreign currency forward contracts receivable	0		6.9	0	0	13.1	0
Warehouse receivables	0		832.1	0	0	1,529.2	0
Deferred compensation plan assets	0		480.2	0	0	446.3	0
Mortgage banking derivative assets	0		0	63.9	0	0	87.1
Total assets at fair value	$	72.6	1,319.2	204.0	77.2	1,988.6	146.4
Liabilities
Foreign currency forward contracts payable	$	0	9.4	0	0	3.4	0
Deferred compensation plan liabilities	0		452.0	0	0	427.6	0
Earn-out liabilities	0		0	68.2	0	0	85.7
Mortgage banking derivative liabilities	0		0	31.0	0	0	73.4
Total liabilities at fair value	$	0	461.4	99.2	0	431.0	159.1

Investments in Real Estate Ventures

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.

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~~The carrying value iswas deemed to approximate ~~the~~ fair value for the majority of these investments due to the proximity of the investment date or date of most recent financing raise to the balance sheet date as well as consideration of investee-level performance updates. To the extent there are changes in fair value, a result of pricing in subsequent funding rounds or changes in business strategy, for example, we recognize such changes through Equity earnings.

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Foreign Currency Forward Contracts

We regularly use foreign currency forward contracts to manage our currency exchange rate risk related to intercompany lending and cash management practices. 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 March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, these contracts had a gross notional value of ~~$1.80~~$2.22 billion ($~~0.84~~1.22 billion on a net basis) and ~~$2.30~~$2.34 billion ($~~1.05~~1.42 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 the three months ended March 31, 2020 or 2019.

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 ~~$6.1~~$6.9 million asset as of March 31, 2021, was composed of gross contracts with receivable positions of $8.4 million and payable positions of $1.5 million. The $9.4 million liability as of March 31, 2021, was composed of gross contracts with receivable positions of $0.7 million and payable positions of $10.1 million. As of December 31, 2020, the $13.1 million asset was composed of gross contracts with receivable positions of $13.5 million and payable positions of $0.4 million. The $3.4 million liability as of December 31, 2020, was composed of gross contracts with receivable positions of ~~$7.3~~$2.7 million and payable positions of ~~$1.2~~$6.1 million. The $6.2 million liability as of March 31, 2020, was composed of gross contracts with receivable positions of $2.1 million and payable positions of $8.3 million. As of December 31, 2019, the $10.5 million asset was composed of gross contracts with receivable positions of $10.6 million and payable positions of $0.1 million. The $4.4 million liability as of December 31, 2019, was composed of gross contracts with receivable positions of $0.8 million and payable positions of $5.2 million.

~~Table of Contents~~

Warehouse Receivables

As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, all of our Warehouse receivables 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.

Deferred Compensation Plan

We maintain a deferred compensation plan for certain of our U.S. employees that allows them to defer portions of their compensation. We recorded this plan on our Condensed Consolidated Balance Sheet as of March 31, ~~2020,~~2021, as Deferred compensation plan assets of ~~$374.2~~$480.2 million, long-term deferred compensation plan liabilities of ~~$348.4~~$452.0 million, included in Deferred compensation, and as a reduction of equity, Shares held in trust, of ~~$5.6~~$5.4 million. We recorded this plan on our Condensed Consolidated Balance Sheet as of December 31, ~~2019,~~2020, as Deferred compensation plan assets of ~~$349.9~~$446.3 million, long-term deferred compensation plan liabilities of ~~$346.1~~$427.6 million, included in Deferred compensation, and as a reduction of equity, Shares held in trust, of ~~$5.7~~$5.6 million.

Earn-Out Liabilities

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. See Note 5, Business Combinations, Goodwill and Other Intangible Assets, for additional discussion of our earn-out liabilities.

Mortgage Banking Derivatives

Both our interest rate lock commitments to prospective borrowers and 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 tables below present a reconciliation for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3).

Table of Contents

(in millions) Balance as of December 31, 2019 Net change in fair value
Foreign CTA¹
Purchases / Additions Settlements Balance as of March 31, 2020
Investments in real estate ventures $ 34.4
—
—
7.0
—
$ 41.4
Mortgage banking derivative assets and liabilities, net 10.2
(75.2 ) —
26.2
(25.2 ) (64.0 )
Earn-out liabilities 148.5
(8.2 ) (2.0 ) —
(8.3 ) 130.0

(in millions) Balance as of December 31, 2018 Net change in fair value
Foreign CTA¹
Purchases / Additions Settlements Balance as of March 31, 2019
Investments in real estate ventures $ 11.5
—
—
1.5
—
$ 13.0
Mortgage banking derivative assets and liabilities, net 6.3
(9.2 ) —
15.1
(11.6 ) 0.6
Earn-out liabilities 192.0
5.7
(0.3 ) 1.5
(29.7 ) 169.2


(in millions)	Balance as of December 31, 2020		Net change in fair value	Foreign CTA(1)	Purchases / Additions	Settlements	Balance as of March 31, 2021
Investments in real estate ventures	$	59.3	31.8	0	49.1	(0.1)	$	140.1
Mortgage banking derivative assets and liabilities, net	13.7		18.9	0	41.1	(40.8)	32.9
Earn-out liabilities	85.7		(0.1)	(0.4)	3.8	(20.8)	68.2


(in millions)	Balance as of December 31, 2019		Net change in fair value	Foreign CTA(1)	Purchases / Additions	Settlements	Balance as of March 31, 2020
Investments in real estate ventures	$	34.4	0	0	7.0	0	$	41.4
Mortgage banking derivative assets and liabilities, net	10.2		(75.2)	0	26.2	(25.2)	(64.0)
Earn-out liabilities	148.5		(8.2)	(2.0)	0	(8.3)	130.0

¹(1) CTA: Currency translation adjustments

Net change in fair value, included in the tables above, is reported in Net income as follows.



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 ~~(losses)~~ earnings
Other current assets - Mortgage banking derivative assets			Revenue before reimbursements
Other current liabilities - Mortgage banking derivative liabilities			Revenue before reimbursements

~~Table of Contents~~

Non-Recurring Fair Value Measurements

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 months ended March 31, ~~2020~~2021 or ~~2019.~~2020. See Note 6, Investments in Real Estate Ventures, for additional information, including information related to impairment charges recorded at the investee level.

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9.	~~DEBT~~

9.DEBT

Short-term borrowings and long-term debt obligations are composed of the following.

(in millions) March 31, 2020 December 31, 2019
Short-term borrowings:
Local overdraft facilities $ 35.8
44.8
Other short-term borrowings 89.4
75.3
Total short-term borrowings $ 125.2
120.1
Credit facility, net of debt issuance costs of $11.4 and $12.3 1,438.6
512.7
Long-term senior notes, 4.4%, face amount of $275.0, due November 2022, net of debt issuance costs of $1.0 and $1.2 274.0
273.8
Long-term senior notes, 1.96%, face amount of €175.0, due June 2027, net of debt issuance costs of $0.9 and $0.9 191.1
195.4
Long-term senior notes, 2.21%, face amount of €175.0, due June 2029, net of debt issuance costs of $1.0 and $1.0 191.0
195.4
Total debt $ 2,219.9
1,297.4


($ in millions)	March 31, 2021		December 31, 2020
Short-term borrowings:
Local overdraft facilities	$	16.0	12.0
Other short-term borrowings	74.6		50.0
Total short-term borrowings	$	90.6	62.0
Credit facility, net of debt issuance costs of $7.7 and $8.7	342.3		(8.7)
Long-term senior notes, 4.4%, face amount of $275.0, due November 2022, net of debt issuance costs of $0.6 and $0.8	274.4		274.2
Long-term senior notes, 1.96%, face amount of €175.0, due June 2027, net of debt issuance costs of $0.8 and $0.8	204.8		213.9
Long-term senior notes, 2.21%, face amount of €175.0, due June 2029, net of debt issuance costs of $0.9 and $0.9	204.8		213.9
Total debt	$	1,116.9	755.3

Credit Facility

~~We have a~~Our $2.75 billion unsecured revolving credit facility (the "Facility") ~~that~~ matures on May 17, 2023. Pricing on the Facility ranges from three-month LIBOR plus 0.875% to 1.35%, with pricing as of March 31, ~~2020,~~2021, at LIBOR plus 0.95%. In addition to outstanding borrowings under the Facility presented in the above table, we had outstanding letters of credit under the Facility of $0.7 million ~~and $0.8 million~~ as of both March 31, ~~2020~~2021 and December 31, ~~2019, respectively.~~2020.

On April 14, 2021, we renewed the Facility, which included the extension of the maturity date to April 2026. Refer to Note 13, Subsequent Events for further detail.

The following tables provides additional information on our Facility.

Three Months Ended March 31,
($ in millions) 2020 2019
Average outstanding borrowings under the Facility $ 935.2
209.0
Effective interest rate on the Facility 2.4 % 3.3 %


	Three Months Ended March 31,
($ in millions)		2021			2020
Average outstanding borrowings under the Facility		$	184.4		935.2
Effective interest rate on the Facility		1.0		%	2.4	%

We will continue to use the Facility for, but not limited to, business acquisitions, working capital needs (including payment of accrued incentive compensation), co-investment activities, ~~dividend payments,~~ share repurchases and capital expenditures.

Short-Term Borrowings and Long-Term Debt

In addition to our Facility, we have the capacity to borrow up to an additional ~~$86.0~~$63.4 million under local overdraft facilities. Amounts outstanding are presented in the debt table above.

As of March 31, ~~2020,~~2021, our issuer and senior unsecured ratings are investment grade: Baa1 from Moody’s Investors Service, Inc. and BBB+ from Standard & Poor’s Ratings Services.

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Covenants

Our Facility and senior notes are subject to customary financial and other covenants, including cash interest coverage ratios and leverage ratios, as well as event of default conditions. We remained in compliance with all covenants as of March 31, ~~2020.~~2021.

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Warehouse Facilities

March 31, 2020 December 31, 2019
($ in millions) Outstanding Balance Maximum Capacity Outstanding Balance Maximum Capacity
Warehouse Facilities:
LIBOR plus 1.15%, expires September 21, 2020 $ 94.1
375.0
104.4
375.0
LIBOR plus 1.15%, expires September 19, 2020 381.0
775.0
184.8
775.0
LIBOR plus 1.15%, expires August 31, 2020 —
100.0
11.4
100.0
Fannie Mae ASAP¹program, LIBOR plus 1.15%
89.0
n/a
53.6
n/a
LIBOR plus 1.25% 280.2
1,000.0
151.6
1,000.0
LIBOR plus 1.25% 92.9
175.0
11.0
175.0
Gross warehouse facilities 937.2
2,425.0
516.8
2,425.0
Debt issuance costs (0.6 ) n/a
(0.9 ) n/a
Total warehouse facilities $ 936.6
2,425.0
515.9
2,425.0


	March 31, 2021			December 31, 2020
($ in millions)	Outstanding Balance		Maximum Capacity	Outstanding Balance	Maximum Capacity
Warehouse Facilities:
LIBOR plus 1.40%, expires September 20, 2021	$	171.5	400.0	144.4	400.0
LIBOR plus 1.40%, expires September 18, 2021(1)	516.6		1,200.0	768.9	1,600.0
LIBOR plus 1.40%, expires August 27, 2021(2)	87.3		200.0	195.9	900.0
Fannie Mae ASAP(3) program, LIBOR plus 1.15%	58.9		n/a	128.8	n/a
LIBOR plus 1.50%	0		300.0	261.6	300.0

Gross warehouse facilities	834.3		2,100.0	1,499.6	3,200.0
Debt issuance costs	(0.8)		n/a	(1.2)	n/a
Total warehouse facilities	$	833.5	2,100.0	1,498.4	3,200.0

¹(1) The temporary maximum capacity increase to $1,600.0 million expired on January 31, 2021; thereafter, the maximum capacity reverted to its original contractual amount.

(2) The temporary maximum capacity increase to $900.0 million expired on January 6, 2021; thereafter, the maximum capacity reverted to its original contractual amount.

(3) As Soon As Pooled ("ASAP") funding ~~program~~program.

We have lines of credit established for the sole purpose of funding our Warehouse receivables. These lines of credit exist with financial institutions and are secured by the related warehouse receivables. Pursuant to these warehouse facilities, we are required to comply with certain financial covenants regarding ~~(1)~~(i) minimum net worth, ~~(2)~~(ii) minimum servicing-related loans and ~~(3)~~(iii) minimum adjusted leverage ratios. We remained in compliance with all covenants under our Warehouse facilities as of March 31, ~~2020.~~

2021.

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10.COMMITMENTS AND CONTINGENCIES


~~10.~~	~~COMMITMENTS AND CONTINGENCIES~~

We are a defendant in various litigation matters arising in the ordinary course of business, some of which involve claims for damages that are substantial in amount.

Professional Indemnity Insurance

When a potential loss event occurs, we estimate the ultimate cost of the claim and accrue the amount in Other current and long-term liabilities on our Condensed Consolidated Balance Sheets when probable and estimable. In addition, we have established receivables from third-party insurance providers for claim amounts in excess of the risk retained by our captive insurance company. In total, these receivables were ~~$32.9~~$14.5 million and ~~$37.7~~$44.0 million as of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively, and are included in Notes and other receivables and Long-term receivables on our Condensed Consolidated Balance Sheets.

The following table shows the professional indemnity accrual activity and related payments.


(in millions)
December 31, 2020	$	48.2
New claims	0
Prior year claims adjustments (including foreign currency changes)	(30.2)
Claims paid	(0.4)
March 31, 2021	$	17.6

December 31, 2019	$	38.1
New claims	0.3
Prior year claims adjustments (including foreign currency changes)	(4.8)
Claims paid	0
March 31, 2020	$	33.6

(in millions)
December 31, 2019 $ 38.1
New claims 0.3
Prior year claims adjustments (including foreign currency changes) (4.8 )
Claims paid —
March 31, 2020 $ 33.6

December 31, 2018 $ 43.1
New claims —
Prior year claims adjustments (including foreign currency changes) (2.4 )
Claims paid (1.1 )
March 31, 2019 $ 39.6

DUS Program Loan Loss-Sharing

As a participant in the DUS program, we retain a portion of the risk of loss for loans that are originated and sold under the DUS program. Net losses on defaulted loans are shared with Fannie Mae based upon established loss-sharing ratios. Generally, we share approximately one-third of incurred losses, subject to a cap of 20% of the principal balance of the mortgage at origination. As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, we had loans subject to such loss-sharing arrangements with an aggregate unpaid principal balance of ~~$9.9~~$12.9 billion and ~~$9.7~~$12.2 billion, respectively.

For all DUS program loans with loss-sharing obligations, we record a non-contingent liability equal to the estimated fair value of the guarantee obligations undertaken upon sale of the loan, which reduces our gain on sale of the loan. Subsequently, this liability is amortized over the estimated life of the loan and recognized as Revenue on the Condensed Consolidated Statements of Comprehensive Income. As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, the loss-sharing guarantee obligations were ~~$20.8~~$23.5 million and ~~$20.6~~$22.1 million, respectively, and are included in Other liabilities on our Condensed Consolidated Balance Sheets. There were no loan losses incurred for the three months ended March 31, 2021 and 2020.

The loss-sharing aspect of the program represents an off-balance sheet credit exposure. We record a separate contingent reserve for this risk calculated on an individual loan level. As of March 31, 2021 and December 31, 2020, the loan loss guarantee reserve was $28.6 million and ~~2019.~~$36.7 million, respectively, and are included within Other liabilities on our Condensed Consolidated Balance Sheets.

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11.RESTRUCTURING AND ACQUISITION CHARGES


~~11.~~	~~RESTRUCTURING AND ACQUISITION CHARGES~~

Restructuring and acquisition charges include cash and non-cash expenses. Cash-based charges primarily consist of (1) severance and employment-related charges, including those related to external service providers, incurred in conjunction with a structural business shift, which can be represented by a notable change in headcount, change in leadership, or transformation of business processes, (2) acquisition, transaction and integration-related charges, and (3) other restructuring including lease exit charges. Non-cash charges include (1) stock-based compensation expense for retention awards issued in conjunction with the HFF acquisition and (2) fair value adjustments to earn-out liabilities relating to prior-period acquisition activity. Restructuring and acquisition charges are presented in table below.

Three Months Ended March 31,
(in millions) 2020 2019
Severance and other employment-related charges $ 1.3
5.0
Restructuring, pre-acquisition and post-acquisition charges 9.8
7.9
Stock-based compensation expense for HFF retention awards 11.2
—
Fair value adjustments to earn-out liabilities (8.2 ) 5.7
Restructuring and acquisition charges $ 14.1
18.6


	Three Months Ended March 31,
(in millions)		2021		2020
Severance and other employment-related charges		$	1.8	1.3
Restructuring, pre-acquisition and post-acquisition charges		9.5		9.8
Stock-based compensation expense for HFF retention awards		6.0		11.2
Fair value adjustments to earn-out liabilities		(0.1)		(8.2)
Restructuring and acquisition charges		$	17.2	14.1

The following tables show the accrual activity and payments relating to cash-based Restructuring and acquisition charges.


(in millions)	Severance & Employment-Related		Lease Exit	Restructuring, Acquisition and Integration Costs	Total
December 31, 2020	$	41.3	2.5	1.2	$	45.0
Accruals	1.8		3.3	6.2	11.3
Payments made	(18.9)		(4.8)	(5.6)	(29.3)
March 31, 2021	$	24.2	1.0	1.8	$	27.0

(in millions) Severance & Employment-Related
Lease
Exit
Restructuring, Acquisition and
Integration Costs Total
December 31, 2019 $ 24.3
8.4
3.8
$ 36.5
Accruals 1.3
2.4
7.4
11.1
Payments made (14.3 ) (9.6 ) (6.9 ) (30.8 )
March 31, 2020 $ 11.3
1.2
4.3
$ 16.8

(in millions) Severance & Employment-Related Lease
Exit Other Restructuring,
Acquisition and Integration Costs Total
December 31, 2018 $ 14.0
0.6
0.5
$ 15.1
Accruals 5.0
—
7.9
12.9
Payments made (7.8 ) (0.1 ) (6.5 ) (14.4 )
March 31, 2019 $ 11.2
0.5
1.9
$ 13.6


(in millions)	Severance & Employment-Related		Lease Exit	Other Restructuring, Acquisition and Integration Costs	Total
December 31, 2019	$	24.3	8.4	3.8	$	36.5
Accruals	1.3		2.4	7.4	11.1
Payments made	(14.3)		(9.6)	(6.9)	(30.8)
March 31, 2020	$	11.3	1.2	4.3	$	16.8

We expect the majority of accrued severance and other accrued acquisition costs as of March 31, ~~2020~~2021 will be paid during the next twelve months. Lease exit payments depend on the terms of various leases, which extend as far out as ~~2022.~~2026.

HFF Acquisition

~~For~~Included in Restructuring and acquisition charges were $11.5 million for the three months ended March 31, 2021 compared to $21.3 million for the three months ended March 31, 2020 ~~and 2019, amounts included in Restructuring and acquisition~~of charges ~~associated with~~relating to the ~~HFF~~ acquisition and integration ~~were $21.3 million and $6.5 million, respectively. These charges included transaction/deal costs,~~of HFF (including retention and severance expense, early lease termination costs, and other integration ~~expenses.~~expenses).

During the integration of HFF, we expect to incur significant charges over the two years following the acquisition in an effort to maximize the value of the combined organization. We expect to recognize approximately $100 million of expense over this two-year window relating to retention awards which have already been paid or granted (in the case of RSUs). In addition, we may incur other costs in connection with the integration including, but not limited to, lease termination charges and other employee-related costs, but are unable to estimate these amounts.We anticipate that other than RSU retention awards granted, substantially all of these cumulative charges will result in cash expenditures.

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12. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT


~~12.~~	~~ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT~~

The tables below present the changes in Accumulated other comprehensive income (loss) ("AOCI") by component.


(in millions)	Pension and postretirement benefit		Cumulative foreign currency translation adjustment	Total
Balance as of December 31, 2020	$	(81.2)	(296.0)	$	(377.2)
Other comprehensive loss before reclassification	0		(6.2)	(6.2)
Amounts reclassified from AOCI after tax expense of $ - , $ - and $ -	(0.2)		0	(0.2)
Other comprehensive loss after tax expense of $ - , $ - and $ -	(0.2)		(6.2)	(6.4)
Balance as of March 31, 2021	$	(81.4)	(302.2)	$	(383.6)

(in millions)	Pension and postretirement benefit		Cumulative foreign currency translation adjustment	Total
Balance as of December 31, 2019	$	(72.0)	(355.8)	$	(427.8)
Other comprehensive loss before reclassification	0		(143.4)	(143.4)
Amounts reclassified from AOCI after tax expense of $ - , $ - and $ -	0		0	0
Other comprehensive loss after tax expense of $ - , $ - and $ -	0		(143.4)	(143.4)
Balance as of March 31, 2020	$	(72.0)	(499.2)	$	(571.2)

For pension and postretirement benefits, we report amounts reclassified from AOCI relating to employer service cost in Compensation and benefits within the Condensed Consolidated Statements of Comprehensive Income. All other reclassifications relating to pension and postretirement benefits are reported within Other income.

(in millions) Pension and postretirement benefit Cumulative foreign currency translation adjustment Total
Balance as of December 31, 2019 $ (72.0 ) (355.8 ) $ (427.8 )
Other comprehensive loss before reclassification —
(143.4 ) (143.4 )
Amounts reclassified from AOCI after tax expense of
$ - , $ - and $ -
—
—
—
Other comprehensive income (loss) after tax expense of $ - , $ - and $ - —
(143.4 ) (143.4 )
Balance as of March 31, 2020 $ (72.0 ) (499.2 ) $ (571.2 )

(in millions) Pension and postretirement benefit Cumulative foreign currency translation adjustment Total
Balance as of December 31, 2018 $ (57.4 ) (398.8 ) $ (456.2 )
Other comprehensive income before reclassification —
31.3
31.3
Amounts reclassified from AOCI after tax expense of
$ - , $ - and $ -
(1.0 ) —
(1.0 )
Other comprehensive (loss) income after tax expense of $ - , $ - and $ - (1.0 ) 31.3
30.3
Balance as of March 31, 2019 $ (58.4 ) (367.5 ) $ (425.9 )

13. SUBSEQUENT EVENTS

On April 14, 2021, we executed Amendment No. 2 ("Amendment No. 2") to the Second Amended and Restated Multicurrency Credit Agreement dated as of June 21, 2016 (as amended, the "Credit Agreement") with a syndicate of lenders. The borrowing capacity under the Credit Agreement remains at $2.75 billion. The features to the Credit Agreement, as amended, provide for (i) an extension of the maturity date from May 2023 to April 2026, (ii) incremental flexibility of cash add-backs, all capped at the greater of $175.0 million or 20% of Bank Adjusted EBITDA for any twelve-month period, (iii) incorporating non-cash add-backs to Bank Adjusted EBITDA, (iv) certain sustainability-linked metrics incorporating KPI's with incentive pricing, and (v) auto-adjustment to new benchmark interest rates.

Refer to Note 9, Debt for further information on our Facility.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the Condensed Consolidated Financial Statements, including the notes thereto, for the three months ended March 31, ~~2020,~~2021, and our audited Consolidated Financial Statements, including the notes thereto, for the fiscal year ended December 31, ~~2019,~~2020, which are included in our ~~2019~~2020 Annual Report on Form 10-K, filed with the SEC and also available on our website (www.jll.com). You should also refer to Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations contained in our ~~2019~~2020 Annual Report on Form 10-K.

The following discussion and analysis contains certain forward-looking statements generally identified by the words anticipates, believes, estimates, expects, forecasts, plans, intends and other similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause JLL's actual results, performance, achievements, plans and objectives to be materially different from any future results, performance, achievements, plans and objectives expressed or implied by such forward-looking statements. See the Cautionary Note Regarding Forward-Looking Statements included within this section for further information.

We present our quarterly Management's Discussion and Analysis in the following sections:


~~(1)~~	~~A summary of our critical accounting policies and estimates;~~


~~(2)~~	~~Certain items affecting the comparability of results and certain market and other risks we face;~~


~~(3)~~	~~The results of our operations, first on a consolidated basis and then for each of our business segments; and~~


~~(4)~~	~~Liquidity and capital resources.~~

(1)A summary of our critical accounting policies and estimates;

(2)Certain items affecting the comparability of results and certain market and other risks we face;

(3)The results of our operations, first on a consolidated basis and then for each of our business segments; and

(4)Liquidity and capital resources.

SUMMARY OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES

An understanding of our accounting policies is necessary for a complete analysis of our results, financial position, liquidity and trends. See Note 2, Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements in our ~~2019~~2020 Annual Report on Form 10-K for a complete summary of our significant accounting policies.

The preparation of our financial statements requires management to make certain critical accounting estimates and judgments that impact (1) the stated amount of assets and liabilities, (2) disclosure of contingent assets and liabilities at the date of the financial statements, and (3) the reported amount of revenue and expenses during the reporting periods. These accounting estimates are based on management's judgment. We consider them to be critical because of their significance to the financial statements and the possibility that future events may differ from current judgments or that the use of different assumptions could result in materially different estimates. We review these estimates on a periodic basis to ensure reasonableness. Although actual amounts likely differ from such estimated amounts, we believe such differences are not likely to be material.

A discussion of our critical accounting policies and estimates used in the preparation of our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q can be found in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020. There have been no material changes to these critical accounting policies and estimates during the three months ended March 31, ~~2020.~~2021.

The following are the critical accounting policies and estimates discussed in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2019:

~~Revenue Recognition;~~

~~Business Combinations, Goodwill and Other Intangible Assets;~~

~~Investments in Real Estate Ventures; and~~

~~Income Taxes.~~

In addition to the aforementioned critical accounting policies, we believe the calculation of our quarterly tax provision is critical to understanding the estimates and assumptions used in preparing the Condensed Consolidated Financial Statements in Item 1.

~~Table of Contents~~

~~Quarterly Income Tax Provision~~

We base our fiscal year estimated effective tax rate on estimates we update each quarter. Our effective tax rate for the three months ended March 31, 2020 was 22.0%. We provide for the effects of income taxes on interim financial statements based on our estimate of the effective tax rate for the full year, which we base on forecasted income by country and expected enacted tax rates; as required, we adjust for the impact of discrete items in the quarters in which they occur. We evaluate our estimated effective tax rate on a quarterly basis to reflect forecast changes in our geographic mix of income and legislative actions on statutory tax rates and other relevant matters effective in the quarter in which the legislation is enacted. Changes in the forecasted income impact of the COVID-19 pandemic may affect our forecasted full-year effective tax rate for the remaining interim quarters of 2020.

The geographic mix of our income can significantly impact our effective tax rate. Very low tax rate jurisdictions (those with effective national and local combined tax rates of 25% or lower) that provide the most significant contributions to our effective tax rate include: Hong Kong (16.5%), Singapore (17%), the United Kingdom (17.5%) and Saudi Arabia (20%). We do not project any other jurisdictions with effective rates of 25% or lower to materially impact our 2020 global effective tax rate.

ITEMS AFFECTING COMPARABILITY

Macroeconomic Conditions

Our results of operations and the variability of these results are significantly influenced by (1) macroeconomic trends, (2) the geopolitical environment, (3) the global and regional real estate markets, and (4) the financial and credit markets. These macroeconomic and other conditions have had, and we expect will continue to have, a significant impact on the variability of our results of operations. ~~Specifically in~~In 2020 ~~we are beginning to experience~~and the three months ended March 31, 2021, macroeconomic ~~impact of~~conditions influenced by the COVID-19 ~~pandemic.~~pandemic impacted the historical seasonality of our revenue and profits and may continue to do so during the remainder of 2021.

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Acquisitions

The timing of acquisitions may impact the comparability of our results on a year-over-year basis. Our results include incremental revenues and expenses following the completion date of an acquisition. In addition, there is generally an initial adverse impact on net income from an acquisition as a result of pre-acquisition due diligence expenditures, transaction/deal costs and post-acquisition integration costs, such as fees from third-party advisors engaged to assist with onboarding and process alignment, retention and severance expense, early lease termination costs, and other integration expenses.

LaSalle Revenue

Our investment management business is, in part, compensated through incentive fees where performance of underlying funds' investments exceeds agreed-to benchmark levels. Depending upon performance, disposition activity, and the contractual timing of measurement periods with clients, these fees can be significant and vary substantially from period to period.

Equity earnings also may vary substantially from period to period for a variety of reasons, including as a result of: (1) gains (losses) on investments reported at fair value, (2) gains (losses) on asset dispositions, and (3) impairment charges. The timing of recognition of these items may impact comparability between quarters, in any one year, or compared to a prior year.

The comparability of these items can be seen in Note 4, Business Segments, of the Notes to Condensed Consolidated Financial Statements and is discussed further in Segment Operating Results included herein.

Foreign Currency

We conduct business using a variety of currencies, but we report our results in U.S. dollars. As a result, the volatility of currencies against the U.S. dollar may positively or negatively impact our results. This volatility can make it more difficult to perform period-to-period comparisons of the reported U.S. dollar results of operations, because such results may indicate a growth or decline rate that might not have been consistent with the real underlying growth or decline rates in the local operations. Consequently, we provide information about the impact of foreign currencies in the period-to-period comparisons of the reported results of operations in our discussion and analysis of financial condition in the Results of Operations section below.

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Transactional-Based Revenue

Transactional-based fees, that are impacted by the size and timing of our clients' transactions, from real estate investment banking, capital markets activities and other services within our RES businesses, and LaSalle, increase the variability of the revenue we earn. The timing and the magnitude of these fees can vary significantly from year to year and quarter to quarter, and from region to region.

Seasonality

Historically, our quarterly revenue and profits have tended to increase from quarter to quarter as the year progresses. This is a result of a general focus in the real estate industry on completing or documenting transactions by calendar year end and the fact that certain expenses are constant through the year. Historically, we have reported a relatively smaller profit in the first quarter and then increasingly larger profits during each of the following three quarters, excluding the recognition of investment-generated performance fees and realized and unrealized co-investment equity earnings and losses (each of which can be unpredictable). Generally, we recognize incentives fees when assets are sold, the timing of which is geared toward the benefit of our clients. In addition, co-investment equity gains and losses are primarily dependent on valuations of underlying investments, the direction and magnitude of changes to such valuations are not predictable. Non-variable operating expenses, which we treat as expenses when incurred during the year, are relatively constant on a quarterly basis. In 2020 and the three months ended March 31, 2021, macroeconomic conditions influenced by the COVID-19 pandemic impacted the historical seasonality of our revenue and profits and may continue to do so during the remainder of 2021.

A significant portion of our Compensation and benefits expense is from incentive compensation plans, which we generally accrue throughout the year based on progress toward annual performance targets. This quarterly estimation can result in significant fluctuations in quarterly Compensation and benefits expense from period to period. Consequently, the results for the periods ended March 31, ~~2020~~2021 and ~~2019,~~2020, are not fully indicative of the results we expect to realize for the full fiscal year.

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RESULTS OF OPERATIONS

Definitions

•We define market volumes for Leasing as gross absorption of office real estate space in square feet for the U.S., Europe and selected markets in Asia Pacific. We define market volumes for Capital Markets as investment sales transactions globally.

•Assets under management data for LaSalle is reported on a one-quarter lag.

•MENA: Middle East and North Africa. Greater China: China, Hong Kong, Macau and Taiwan.

•n.m.: not meaningful, represented by a percentage change of greater than 100% favorable or unfavorable.

Consolidated Operating Results


	Three Months Ended March 31,					Change in				% Change in Local Currency			Three Months Ended March 31,			Change in			% Change in Local Currency
($ in millions)	2020			2019		U.S. dollars				% Change in Local Currency		($ in millions)	2021		2020	U.S. dollars			% Change in Local Currency
Leasing	$	492.4		477.9		14.5		3	%	4	%	Leasing	$	449.5	492.4	(42.9)	(9)	%	(10)	%
Capital Markets	342.3			193.5		148.8		77		79		Capital Markets	320.4		342.3	(21.9)	(6)		(9)
Property & Facility Management	2,365.8			2,269.1		96.7		4		6		Property & Facility Management	2,414.0		2,365.8	48.2	2		(1)
Project & Development Services	604.4			600.1		4.3		1		2		Project & Development Services	551.8		604.4	(52.6)	(9)		(12)
Advisory, Consulting and Other	186.2			181.6		4.6		3		4		Advisory, Consulting and Other	210.2		186.2	24.0	13		8
Real Estate Services ("RES") revenue	$	3,991.1		3,722.2		268.9		7	%	9	%	Real Estate Services ("RES") revenue	$	3,945.9	3,991.1	(45.2)	(1)	%	(4)	%
LaSalle	104.9			98.4		6.5		7		8		LaSalle	91.2		104.9	(13.7)	(13)		(16)
Revenue	$	4,096.0		3,820.6		275.4		7	%	9	%	Revenue	$	4,037.1	4,096.0	(58.9)	(1)	%	(4)	%
Reimbursements	(1,863.0		)	(1,859.0	)	4.0		—		1		Reimbursements	(1,907.5)		(1,863.0)	(44.5)	2		—
Revenue before reimbursements	$	2,233.0		1,961.6		271.4		14	%	15	%	Revenue before reimbursements	$	2,129.6	2,233.0	(103.4)	(5)	%	(8)	%
Gross contract costs	(729.4		)	(642.6	)	(86.8	)	14		16		Gross contract costs	(677.2)		(729.4)	52.2	(7)		(11)
Net non-cash MSR and mortgage banking derivative activity	1.6			0.1		1.5		n.m.		n.m.		Net non-cash MSR and mortgage banking derivative activity	(9.7)		1.6	(11.3)	n.m.
Fee revenue	$	1,505.2		1,319.1		186.1		14	%	15	%	Fee revenue	$	1,442.7	1,505.2	(62.5)	(4)	%	(7)	%
Leasing	475.2			461.4		13.8		3		4		Leasing	429.5		475.2	(45.7)	(10)		(11)
Capital Markets	334.1			184.8		149.3		81		82		Capital Markets	305.3		334.1	(28.8)	(9)		(11)
Property & Facility Management	279.9			280.7		(0.8	)	0		1		Property & Facility Management	304.7		279.9	24.8	9		5
Project & Development Services	188.3			173.4		14.9		9		10		Project & Development Services	170.1		188.3	(18.2)	(10)		(13)
Advisory, Consulting and Other	129.1			125.1		4.0		3		6		Advisory, Consulting and Other	147.8		129.1	18.7	14		9
RES fee revenue	$	1,406.6		1,225.4		181.2		15	%	16	%	RES fee revenue	$	1,357.4	1,406.6	(49.2)	(3)	%	(6)	%
LaSalle	98.6			93.7		4.9		5		6		LaSalle	85.3		98.6	(13.3)	(13)		(17)

Compensation and benefits excluding gross contract costs	1,064.3			958.0		106.3		11		12		Compensation and benefits excluding gross contract costs	$	1,072.2	1,064.3	7.9	1	%	(2)	%
Operating, administrative and other expenses excluding gross contract costs	305.6			270.5		35.1		13		15		Operating, administrative and other expenses excluding gross contract costs	229.3		305.6	(76.3)	(25)		(27)
Depreciation and amortization	55.0			46.5		8.5		18		19		Depreciation and amortization	53.0		55.0	(2.0)	(4)		(6)
Restructuring and acquisition charges												Restructuring and acquisition charges	17.2		14.1	3.1	22		21
Total fee-based operating expenses	1,424.9			1,275.0		149.9		12		13		Total fee-based operating expenses	1,371.7		1,439.0	(67.3)	(5)		(7)
Restructuring and acquisition charges	14.1			18.6		(4.5	)	(24	)	(24	)
Gross contract costs	729.4			642.6		86.8		14		16		Gross contract costs	677.2		729.4	(52.2)	(7)		(11)
Total operating expenses, excluding reimbursed expenses	$	2,168.4		1,936.2		232.2		12	%	14	%	Total operating expenses, excluding reimbursed expenses	$	2,048.9	2,168.4	(119.5)	(6)	%	(9)	%
Operating income	$	64.6		25.4		39.2		n.m.		n.m.		Operating income	$	80.7	64.6	16.1	25	%	23	%
Equity earnings	$	(28.3	)	5.0		(33.3	)	n.m.		n.m.
Equity earnings (losses)												Equity earnings (losses)	$	48.5	(28.3)	76.8	n.m.
Adjusted EBITDA	$	95.6		95.4		0.2		—	%	2	%	Adjusted EBITDA	$	190.1	95.6	94.5	99	%	96	%

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Non-GAAP Financial Measures

Management uses certain non-GAAP financial measures to develop budgets and forecasts, measure and reward performance against those budgets and forecasts, and enhance comparability to prior periods. These measures are believed to be useful to investors and other external stakeholders as supplemental measures of core operating performance and include the following:

~~(i)~~a.Fee revenue and Fee-based operating expenses;

~~(ii)~~b.Adjusted EBITDA attributable to common shareholders ("Adjusted EBITDA") and Adjusted EBITDA margin; and

~~(iii)~~c.Percentage changes against prior periods, presented on a local currency basis.

However, non-GAAP financial measures should not be considered alternatives to measures determined in accordance with U.S. generally accepted accounting principles (“GAAP”). Any measure that eliminates components of a company’s capital structure, cost of operations or investment, or other results has limitations as a performance measure. In light of these limitations, management also considers GAAP financial measures and does not rely solely on non-GAAP financial measures. Because our non-GAAP financial measures are not calculated in accordance with GAAP, they may not be comparable to similarly titled measures used by other companies.

Adjustments to GAAP Financial Measures Used to Calculate non-GAAP Financial Measures

Gross contract costs represent certain costs associated with client-dedicated employees and third-party vendors and subcontractors and are indirectly reimbursed through the fees we receive. These costs are presented on a gross basis in Operating expenses with the equal amount of corresponding fees in Revenue before reimbursements. ~~However, as we generally earn little to no margin on such costs,~~Consistent with our treatment of directly reimbursed expenses, excluding gross contract costs from both Fee revenue and Fee-based operating expenses more accurately reflects how we manage our expense base and operating margins and also enables a more consistent performance assessment across a portfolio of contracts with varying payment terms and structures, including those with direct versus indirect reimbursement of such costs.

Net non-cash mortgage servicing rights ("MSR") and mortgage banking derivative activity consists of the balances presented within Revenue composed of (i) derivative gains/losses resulting from mortgage banking loan commitment and warehousing activity and (ii) gains recognized from the retention of MSR upon origination and sale of mortgage loans, offset by (iii) amortization of MSR intangible assets over the period that net servicing income is projected to be received. Non-cash derivative gains/losses resulting from mortgage banking loan commitment and warehousing activity are calculated as the estimated fair value of loan commitments and subsequent changes thereof, primarily represented by the estimated net cash flows associated with future servicing rights. MSR gains and corresponding MSR intangible assets are calculated as the present value of estimated net cash flows over the estimated mortgage servicing periods. The above activity is reported entirely within Revenue of the Capital Markets service line of the Americas segment. Excluding net non-cash MSR and mortgage banking derivative activity reflects how we manage and evaluate performance because the excluded activity is non-cash in nature.

Restructuring and acquisition charges primarily consist of: (i) severance and employment-related charges, including those related to external service providers, incurred in conjunction with a structural business shift, which can be represented by a notable change in headcount, change in leadership or transformation of business processes; (ii) acquisition, transaction and integration-related charges, including fair value adjustments, which are generally non-cash in the periods such adjustments are made, to assets and liabilities recorded in purchase accounting such as earn-out liabilities and intangible assets; and (iii) other restructuring, including lease exit charges. Such activity is excluded as the amounts are generally either non-cash in nature or the anticipated benefits from the expenditures would not likely be fully realized until future periods. Restructuring and acquisition charges are excluded from segment operating results and therefore not a line item in the segments’ reconciliation to Adjusted EBITDA.

Gain on Disposition reflects the gain recognized on the sale of a business within Americas. Given the low frequency of business disposals by the company historically, the gain directly associated with such activity is excluded as it is not considered indicative of core operating performance.

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Reconciliation of Non-GAAP Financial Measures

Below are reconciliations of (i) Revenue to fee revenue and (ii) Operating expenses to fee-based operating expenses.


	Three Months Ended March 31,						Three Months Ended March 31,
(in millions)	2020			2019		(in millions)		2021		2020
Revenue	$	4,096.0		3,820.6		Revenue		$	4,037.1	4,096.0
Reimbursements	(1,863.0		)	(1,859.0	)
Less: Reimbursements						Less: Reimbursements		(1,907.5)		(1,863.0)
Revenue before reimbursements	2,233.0			1,961.6		Revenue before reimbursements		2,129.6		2,233.0
Adjustments:						Adjustments:
Gross contract costs	(729.4		)	(642.6	)	Gross contract costs		(677.2)		(729.4)
Net non-cash MSR and mortgage banking derivative activity	1.6			0.1		Net non-cash MSR and mortgage banking derivative activity		(9.7)		1.6
Fee revenue	$	1,505.2		1,319.1		Fee revenue		$	1,442.7	1,505.2

Operating expenses	$	4,031.4		3,795.2		Operating expenses		$	3,956.4	4,031.4
Reimbursed expenses	(1,863.0		)	(1,859.0	)
Less: Reimbursed expenses						Less: Reimbursed expenses		(1,907.5)		(1,863.0)
Operating expenses, excluding reimbursed expenses	2,168.4			1,936.2		Operating expenses, excluding reimbursed expenses		2,048.9		2,168.4
Less: Gross contract costs	(729.4		)	(642.6	)	Less: Gross contract costs		(677.2)		(729.4)
Fee-based operating expenses	$	1,439.0		1,293.6		Fee-based operating expenses		$	1,371.7	1,439.0

Operating income	$	64.6		25.4		Operating income		$	80.7	64.6

Below is (i) a reconciliation of Net income attributable to common shareholders to EBITDA and Adjusted EBITDA, (ii) the Net income margin attributable to common shareholders (measured on Revenue before reimbursements), and (iii) the Adjusted EBITDA margin (measured on fee-revenue and presented on a local currency basis).


	Three Months Ended March 31,
(in millions)		2021			2020
Net income attributable to common shareholders		$	103.0		5.3
Add:
Interest expense, net of interest income		10.4			14.6
Provision for income taxes		28.2			5.0
Depreciation and amortization		53.0			55.0
EBITDA		$	194.6		79.9
Adjustments:
Restructuring and acquisition charges		17.2			14.1
Gain on disposition		(12.0)			—
Net non-cash MSR and mortgage banking derivative activity		(9.7)			1.6
Adjusted EBITDA		$	190.1		95.6

Net income margin attributable to common shareholders		4.8		%	0.2	%

Adjusted EBITDA margin		13.4		%	6.4	%

Three Months Ended March 31,
(in millions) 2020 2019
Net income attributable to common shareholders $ 5.3
21.3
Add:
Interest expense, net of interest income 14.6
9.6
Provision for income taxes 5.0
(0.7 )
Depreciation and amortization 55.0
46.5
EBITDA $ 79.9
76.7
Adjustments:
Restructuring and acquisition charges 14.1
18.6
Net non-cash MSR and mortgage banking derivative activity 1.6
0.1
Adjusted EBITDA $ 95.6
95.4

Net income margin attributable to common shareholders 0.2 % 1.1 %

Adjusted EBITDA margin 6.4 % 7.2 %

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In discussing our operating results, we report Adjusted EBITDA margins and refer to percentage changes in local currency, unless otherwise noted. Amounts presented on a local currency basis are calculated by translating the current period results of our foreign operations to U.S. dollars using the foreign currency exchange rates from the comparative period. We believe this methodology provides a framework for assessing performance and operations excluding the effect of foreign currency fluctuations.

The following table reflects the reconciliation to local currency amounts for consolidated (i) Revenue, (ii) Fee revenue, (iii) Operating income, and (iv) Adjusted EBITDA.


	Three Months Ended March 31,					Three Months Ended March 31,
($ in millions)	2020		% Change		($ in millions)		2021	% Change
Revenue:					Revenue:
At current period exchange rates	$	4,096.0	7	%	At current period exchange rates			$	4,037.1	(1)	%
Impact of change in exchange rates	49.7		n/a		Impact of change in exchange rates			(110.2)		n/a
At comparative period exchange rates	$	4,145.7	9	%	At comparative period exchange rates			$	3,926.9	(4)	%

Fee Revenue:
Fee revenue:					Fee revenue:
At current period exchange rates	$	1,505.2	14	%	At current period exchange rates			$	1,442.7	(4)	%
Impact of change in exchange rates	18.0		n/a		Impact of change in exchange rates			(40.5)		n/a
At comparative period exchange rates	$	1,523.2	15	%	At comparative period exchange rates			$	1,402.2	(7)	%

Operating Income:
Operating income:					Operating income:
At current period exchange rates	$	64.6	154	%	At current period exchange rates			$	80.7	25	%
Impact of change in exchange rates	1.5		n/a		Impact of change in exchange rates			(1.3)		n/a
At comparative period exchange rates	$	66.1	161	%	At comparative period exchange rates			$	79.4	23	%

Adjusted EBITDA:					Adjusted EBITDA:
At current period exchange rates	$	95.6	—	%	At current period exchange rates			$	190.1	99	%
Impact of change in exchange rates	1.6		n/a		Impact of change in exchange rates			(2.6)		n/a
At comparative period exchange rates	$	97.2	2	%	At comparative period exchange rates			$	187.5	96	%

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Revenue

~~COVID-19 Pandemic~~

~~Our operations were disrupted by~~The continued impact of the COVID-19 pandemic (the "pandemic") ~~beginning this quarter. Offices in China began closing in January~~contributed to lower consolidated RES revenue, down 4% to $3.9 billion, and ~~by the end of the March, over 90% of our office-based corporate employees across the globe were working remotely. Geographies~~fee revenue, down 6% to $1.4 billion, compared with the ~~longest duration of the pandemic experienced the most significant financial impact, which~~prior-year quarter, as strong growth in Asia Pacific was primarily to transactional-based service lines. Specifically, these locations include China, Japan, Korea and southern Europe. In response to the pandemic's developments, we have implemented cost mitigation plans on discretionary spend. In addition, the macroeconomic impact of the pandemic resulted in certain non-cash charges this quarter, including a $30.6 million increase to loan loss credit reservesmore than offset by declines in Americas and ~~$40.3 million of equity losses largely from fair value declines in LaSalle. The continued impact of~~EMEA. Notably, the ~~pandemic on transactional-based service lines, possible additional non-cash charges, and potential delays in payments from clients are closely being monitored.~~

~~Revenue~~

~~For the first quarter of 2020 compared with 2019,~~ consolidated RES revenue ~~increased 9%~~decreases in transaction-based service lines were less significant than the trailing three quarters, with encouraging economic indicators present in many geographies. Corporate Solutions continued to ~~$4.0 billion and consolidated RES~~deliver stable fee revenue ~~increased 16% to $1.4 billion. The increase~~performance as strength in ~~consolidated RES revenue was highlighted by Capital Markets, which contributed 48%~~facilities management offset a decrease in Project & Development Services.

Geographically across service lines, EMEA represented 60% of the RES ~~increase~~revenue decline for the first quarter on a local currency basis, ~~including $144.4 million of~~Americas represented 54% and Asia Pacific partially offset these decreases. With respect to RES fee revenue, ~~from the July 1, 2019 acquisition of HFF, Inc. ("HFF"). Property & Facility Management, which contributed 39%~~Americas represented nearly all of the ~~RES revenue increase~~decline for the first quarter on a local currency basis, ~~was driven by continued Corporate Solutions momentum across~~as growth in Asia Pacific offset the ~~globe. Consolidated fee~~decline in EMEA. Refer to the segment results discussion for further detail.

LaSalle revenue growth was achieved within all our RES service lines, led by Capital Markets (77% of the growth on a local currency basis). Geographically across service lines, Americas contributed over 100% of the RES fee revenue growth for the first quarter.

~~The following highlights the proportion of RES service line consolidated fee revenue growth, on a local currency basis,~~decreased 16% compared with the prior-year ~~quarter, by notable segment. Refer to segment operating results for further discussion.~~

•~~Leasing - Americas drove growth, partially offset by Asia Pacific and EMEA~~

•~~Capital Markets - Americas (96%) and EMEA (7%), offset by Asia Pacific~~

•~~Property & Facility Management - Americas led growth, offset by EMEA~~

•~~Project & Development Services - Americas (73%) and EMEA (46%), offset by Asia Pacific~~

•~~Advisory, Consulting and Other - Asia Pacific (51%), Americas (38%) and EMEA (11%)~~

~~LaSalle had strong growth in advisory fees in the first quarter of 2020, slightly offset by declines in incentive and transaction fees.~~quarter. Refer to the LaSalle segment ~~results~~ discussion for further ~~discussion.~~detail.

Our consolidated fee revenue ~~increased 14%~~decreased 4% in U.S. dollars (“USD”) and ~~15%~~7% in local currency for the first quarter of ~~2020,~~2021, compared with ~~2019.~~2020. The spread was driven by ~~strengthening~~the weakening of the U.S. dollar against ~~most~~several major currencies, especially the ~~euro,~~ British pound sterling, euro and Australian ~~dollar, Chinese yuan and Indian rupee.~~dollar.

Operating Expenses

In the first quarter of ~~2020,~~2021, consolidated operating expenses, excluding reimbursed expenses, were ~~$2.2~~$2.0 billion, ~~up 14%~~down 9% from ~~2019,~~2020, and consolidated fee-based operating expenses, were $1.4 billion, ~~up 13%~~down 7% from the prior-year quarter. For the first quarter, the ~~increase in expense was primarily attributable to Americas, which represented over 100% of the increase~~decrease in fee-based operating expenses was driven by Americas (97% of the reduction on a local currency ~~basis, primarily due to incremental expenses from HFF operations as well as a $30.6~~basis).

Americas results reflected an $8.1 million ~~increase~~non-cash reduction to loan loss credit reserves, ~~in response to the expected economic impact of the pandemic; Asia Pacific and EMEA offset this~~compared with a $30.6 million increase in ~~expenses. In addition,~~ reserves during the prior-year quarter.

Restructuring and acquisition charges ~~were down~~increased compared with the ~~prior-year quarter,~~prior year; refer to following table for further detail.


	Three Months Ended March 31,
(in millions)		2021		2020
Severance and other employment-related charges		$	1.8	1.3
Restructuring, pre-acquisition and post-acquisition charges		15.5		21.0
Fair value adjustments that resulted in a net decrease to earn-out liabilities from prior-period acquisition activity		(0.1)		(8.2)
Total restructuring & acquisition charges		$	17.2	14.1
Portion of total restructuring & acquisition charges related to the acquisition and integration of HFF		$	11.5	21.3

Three Months Ended March 31,
(in millions) 2020 2019
Severance and other employment-related charges $ 1.3
5.0
Restructuring, pre-acquisition and post-acquisition charges 21.0
7.9
Fair value adjustments that resulted in a net (decrease) increase to earn-out liabilities from prior-period acquisition activity (8.2 ) 5.7
Total restructuring & acquisition charges $ 14.1
18.6

~~Table of Contents~~

~~Included in the preceding table was $21.3 million and $6.5 million for the first quarter of 2020 and 2019, respectively, of charges relating to~~Charges associated with the acquisition and integration of ~~HFF. Charges in 2020 include~~HFF included retention and severance expense, early lease termination costs, and other integration ~~expenses, while charges in 2019 included transaction/deal costs.~~expenses.

Equity ~~Earnings/Losses~~Earnings

For the first quarter of ~~2020,~~2021, we recognized equity earnings of $48.5 million, compared with equity losses of $28.3 million ~~compared with equity earnings of $5.0 million~~ in the prior-year quarter. ~~LaSalle recognized $40.3~~

Valuation increases of JLL Technologies' investments contributed $34.7 million ~~of equity losses~~this quarter, reflecting progress in ~~2020, compared with $4.9 million of equity earnings~~the strategy to invest in ~~2019;~~early-stage proptech companies; refer to the ~~LaSalle~~Americas segment ~~results~~ discussion for additional ~~details. Substantially~~detail. In addition, substantially all of the $12.7 million of equity earnings in the Americas segment in 2020 were attributable to gains by consolidated variable interest entities in which ~~the company~~we held no equity ~~interest. These~~interest; these gains are also reflected in net income attributable to noncontrolling interest and, therefore, have no impact to ~~Net~~net income attributable to common shareholders.

LaSalle recognized $13.0 million of equity earnings in 2021, compared with $40.3 million of equity losses last year. Refer to the LaSalle segment discussion for additional detail.

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Income Taxes

The provision for income taxes was ~~$5.0~~$28.2 million for the three months ended March 31, ~~2020,~~2021, representing an effective tax rate of ~~22.0%~~21.6%. For the three months ended March 31, ~~2019,~~2020, the ~~$0.7~~provision was $5.0 million, ~~income tax benefit included a $5.7 million discrete benefit due to a reduction to our reserve for uncertain tax positions. Excluding the impact of this discrete item, the~~representing an effective tax rate ~~was 24.5% for the three months ended March 31, 2019.~~of 22.0%.

Net Income and Adjusted EBITDA

Net income attributable to common shareholders for the ~~first quarter of 2020~~three months ended March 31, 2021 was ~~$5.3~~$103.0 million, compared with ~~$21.3~~$5.3 million in ~~2019.~~2020. Adjusted EBITDA was ~~$95.6~~$190.1 million for the first quarter of ~~2020, compared with $95.4~~2021, an increase of 96% from the prior-year period. Net income attributable to common shareholders in 2021 included a $12.0 million gain recognized on the sale of a business as part of a broader investment made in ~~2019.~~ Roofstock, a marketplace for investing in the dynamic single-family rental sector. This gain on sale is excluded from adjusted measures.

Net income margin attributable to common shareholders for the first quarter (against Revenue before reimbursements) was ~~0.2% in the first quarter of 2020,~~4.8%, compared with ~~1.1%~~0.2% in the prior-year quarter. Adjusted EBITDA margin for the first quarter, calculated on a fee-revenue basis, ~~for the first quarter of 2020~~ was 13.2% in USD (13.4% in local currency), compared with 6.4% in ~~USD and local currency, compared with 7.2% last year.~~2020. The ~~80 basis-point~~ net ~~contraction of consolidated~~ margin expansion was primarily due to the year-over-year non-cash ~~charges noted above (430 basis points of~~changes in LaSalle equity earnings and loan loss credit reserves discussed above. Remaining margin ~~dilution),~~expansion was driven by JLL Technologies' investments as well as strong contributions from Asia Pacific, partially offset by ~~contributions from recent RES acquisitions (+170 basis points), driven by HFF, and organic RES (+170 basis points).~~a decline in EMEA. Refer to the segment operating results discussions for additional detail.

Segment Operating Results

We manage and report our operations as four business segments. Our three geographic RES segments include Americas, EMEA and Asia Pacific. Our fourth segment is LaSalle, our investment management business.

Each geographic region offers our full range of real estate services, including tenant representation and agency leasing, capital markets, property management, facility management, project and development services, and advisory, consulting and valuation services. We consider "property management" to be services provided to non-occupying property investors and "facility management" to be services provided to owner-occupiers. LaSalle provides investment management services to institutional investors and high-net-worth individuals.

For segment reporting, (i) gross contract costs and (ii) net non-cash MSR and mortgage banking derivative activity are both excluded from revenue in determining "fee revenue". Gross contract costs are excluded from operating expenses in determining "fee-based operating expenses." In addition, our measure of segment results also excludes Restructuring and acquisition charges.

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Americas - Real Estate Services


							% Change
	Three Months Ended March 31,			Change in			in Local
($ in millions)	2021		2020	U.S. dollars			Currency
Revenue	$	2,443.9	2,523.1	(79.2)	(3)	%	(3)	%
Reimbursements	(1,385.7)		(1,393.5)	7.8	(1)		(1)
Revenue before reimbursements	$	1,058.2	1,129.6	(71.4)	(6)	%	(6)	%
Gross contract costs	(215.8)		(212.8)	(3.0)	1		2
Net non-cash MSR and mortgage banking derivative activity	(9.7)		1.6	(11.3)	n.m.		n.m.
Fee revenue	$	832.7	918.4	(85.7)	(9)	%	(9)	%
Leasing	351.4		405.6	(54.2)	(13)		(14)
Capital Markets	206.6		246.6	(40.0)	(16)		(16)
Property & Facility Management	146.5		128.7	17.8	14		14
Project & Development Services	81.3		93.4	(12.1)	(13)		(13)
Advisory, Consulting and Other	46.9		44.1	2.8	6		6
Compensation, operating and administrative expenses excluding gross contract costs	$	698.8	797.5	(98.7)	(12)	%	(12)	%


Depreciation and amortization	33.1		37.4	(4.3)	(11)		(11)
Segment fee-based operating expenses (excluding restructuring and acquisition charges)	731.9		834.9	(103.0)	(12)		(12)
Gross contract costs	215.8		212.8	3.0	1		2
Segment operating expenses (excluding reimbursed expenses)	$	947.7	1,047.7	(100.0)	(10)	%	(10)	%

Equity earnings	$	34.5	12.7	21.8	n.m.		n.m.
Segment income	$	145.0	94.6	50.4	53	%	53	%
Adjusted EBITDA	$	169.0	121.3	47.7	39	%	39	%

% Change
Three Months Ended March 31, Change in in Local
($ in millions) 2020 2019 U.S. dollars Currency
Revenue $ 2,523.1
2,250.1
273.0
12 % 13 %
Reimbursements (1,393.5 ) (1,351.4 ) (42.1 ) 3
3
Revenue before reimbursements $ 1,129.6
898.7
230.9
26 % 26 %
Gross contract costs (212.8 ) (187.7 ) (25.1 ) 13
15
Net non-cash MSR and mortgage banking derivative activity 1.6
0.1
1.5
n.m.
n.m.
Fee Revenue $ 918.4
711.1
207.3
29 % 30 %
Leasing 405.6
377.6
28.0
7
8
Capital Markets 246.6
99.7
146.9
n.m.
n.m.
Property & Facility Management 128.7
111.4
17.3
16
16
Project & Development Services 93.4
80.7
12.7
16
16
Advisory, Consulting and Other 44.1
41.7
2.4
6
6
Compensation, operating and administrative expenses excluding gross contract costs 797.5
623.1
174.4
28
28
Depreciation and amortization 37.4
27.3
10.1
37
38
Segment fee-based operating expenses (excluding restructuring and acquisition charges) 834.9
650.4
184.5
28
29
Gross contract costs 212.8
187.7
25.1
13
15
Segment operating expenses (excluding reimbursed expenses) $ 1,047.7
838.1
209.6
25 % 26 %
Segment operating income $ 81.9
60.6
21.3
35 % 35 %
Equity earnings (loss) $ 12.7
(0.3 ) 13.0
n.m.
n.m.
Adjusted EBITDA $ 121.3
88.0
33.3
38 % 38 %

The pandemic continued to negatively impact the Americas ~~continued its strong momentum through the first quarter of 2020 with all~~transaction-based service lines, ~~delivering increased~~although the decline in U.S. Leasing was notably less significant than recent quarters. Continued growth in industrial partially offset a decline in office leasing activity, however, U.S. office leasing again outperformed market gross absorption, which was down 45% according to JLL Research. Lower investment sales and debt placement activity drove the decline in Capital Markets revenue while our multifamily business continued to deliver stable revenue performance. Strong revenue and fee revenue. The growth was led by Capital Markets, reflecting $140.9 million of incremental revenue contributions from HFF ($143.4 million of fee revenue). Leasing performed exceptionally well in the U.S., outpacing a very strong prior-year quarter (Q1 2019 was up 29% over 2018). Corporate Solutions achieved double-digit fee revenue growth ~~due to net new wins and existing client expansions, primarily reflected~~ in Property & Facility Management ~~and Project & Development Services.~~

The increase in operating expenses and fee-based operating expenses for the first quarter of 2020 compared with 2019 primarily reflected revenue-related expense growth, including incremental expenses associated with the first quarter of post-acquisition HFF operations. In addition, the current quarter included a non-cash $30.6 million increase to credit reserves for potential future losses on sold loans with loss-sharing provisions and was attributable to new client wins and expansions of existing Corporate Solutions client relationships.

Equity earnings were entirely driven by valuation increases to JLL Technologies' investments, a reflection of subsequent financing rounds at increased per-share values for certain investments. In the ~~pandemic.~~

~~Substantially all of the~~prior year, equity earnings were largely attributable to gains by consolidated variable interest entities in which the company held no equity ~~interest. Therefore, there is~~interest, and therefore, these gains had no net impact to Adjusted EBITDA.

The decreases in segment operating expenses and segment fee-based operating expenses for the first quarter of 2021 compared with 2020 were driven by savings resulting from cost mitigation efforts during the trailing twelve months and lower revenue-related expenses.

Adjusted EBITDA margin for the quarter, calculated on a fee-revenue basis, was ~~13.2%~~20.3% in USD and in local currency, ~~for the quarter,~~ compared with ~~12.4%~~13.2% in ~~2019.~~2020. The equity earnings noted above and year-over-year change in loan loss credit reserves substantially drove the margin ~~expansion reflects strong revenue performance, largely split between organic and HFF, and the implementation of~~expansion. The residual nominal improvement reflected cost mitigation ~~plans. This was partially~~savings noted above which offset by the ~~non-cash $30.6 million charge noted above.~~impact of lower revenue.

Table of Contents

EMEA - Real Estate Services


										% Change									% Change
	Three Months Ended March 31,					Change in				in Local			Three Months Ended March 31,			Change in			in Local
($ in millions)	2020			2019		U.S. dollars				Currency		($ in millions)	2021		2020	U.S. dollars			Currency
Revenue	$	755.9		723.4		32.5		4	%	7	%	Revenue	$	716.2	755.9	(39.7)	(5)	%	(12)	%
Reimbursements	(182.8		)	(164.6	)	(18.2	)	11		13		Reimbursements	(153.4)		(182.8)	29.4	(16)		(23)
Revenue before reimbursements	$	573.1		558.8		14.3		3	%	5	%	Revenue before reimbursements	$	562.8	573.1	(10.3)	(2)	%	(9)	%
Gross contract costs	(262.6		)	(242.7	)	(19.9	)	8		11		Gross contract costs	(251.3)		(262.6)	11.3	(4)		(11)
Fee Revenue	$	310.5		316.1		(5.6	)	(2	)%	1	%
Fee revenue												Fee revenue	$	311.5	310.5	1.0	—	%	(7)	%
Leasing	47.0			50.5		(3.5	)	(7	)	(4	)	Leasing	50.3		47.0	3.3	7		(1)
Capital Markets	68.8			59.6		9.2		15		19		Capital Markets	70.3		68.8	1.5	2		(5)
Property & Facility Management	77.9			95.0		(17.1	)	(18	)	(16	)	Property & Facility Management	77.0		77.9	(0.9)	(1)		(8)
Project & Development Services	66.1			59.5		6.6		11		14		Project & Development Services	59.2		66.1	(6.9)	(10)		(16)
Advisory, Consulting and Other	50.7			51.5		(0.8	)	(2	)	2		Advisory, Consulting and Other	54.7		50.7	4.0	8		—
Compensation, operating and administrative expenses excluding gross contract costs	321.8			334.2		(12.4	)	(4	)	(2	)	Compensation, operating and administrative expenses excluding gross contract costs	$	336.4	321.8	14.6	5	%	(2)	%

Depreciation and amortization	9.2			11.3		(2.1	)	(19	)	(17	)	Depreciation and amortization	10.9		9.2	1.7	18		11
Segment fee-based operating expenses (excluding restructuring and acquisition charges)	331.0			345.5		(14.5	)	(4	)	(2	)	Segment fee-based operating expenses (excluding restructuring and acquisition charges)	347.3		331.0	16.3	5		(2)
Gross contract costs	262.6			242.7		19.9		8		11		Gross contract costs	251.3		262.6	(11.3)	(4)		(11)
Segment operating expenses (excluding reimbursed expenses)	$	593.6		588.2		5.4		1	%	3	%	Segment operating expenses (excluding reimbursed expenses)	$	598.6	593.6	5.0	1	%	(6)	%
Segment operating loss	$	(20.5	)	(29.4	)	8.9		30	%	34	%

Equity earnings	$	—		0.1		(0.1	)	n.m.		n.m.		Equity earnings	$	—	—	—	n.m.
Segment loss												Segment loss	$	(35.8)	(20.5)	(15.3)	75	%	69	%
Adjusted EBITDA	$	(10.6	)	(18.2	)	7.6		42	%	49	%	Adjusted EBITDA	$	(24.8)	(10.6)	(14.2)	n.m.

EMEA’s ~~first-quarter 2020~~ revenue and fee revenue ~~was~~in 2021 continued to be affected by the pandemic, compared with the prior-year quarter which had not yet been meaningfully impacted. Transaction-based revenues were largely stable as significant growth in certain geographies, highlighted by ~~strong performance~~Switzerland, was offset by geographies that experienced more restrictive lock-down measures, such as Germany and the UK. Lower activity in ~~Capital Markets~~our fit-out business and significant prior-year project activity in MENA that did not recur this quarter primarily drove the decline in Project & Development Services. A decrease in fee revenue from the UK mobile engineering business impacted Property & Facility Management.

The UKdecreases (in local currency) in segment operating expenses and ~~Germany drove growth in Capital Markets;~~segment fee-based operating expenses, compared with the prior-year quarter, ~~reflected~~were primarily due to savings resulting from cost mitigation efforts during the trailing twelve months and lower revenue-related expenses, partially offset by a ~~sharp decline~~contract loss in ~~volumes in the~~our UK impacted by Brexit uncertainty. Project & Development Services growth was led by continued strong project execution in MENA. A majority of the decline in Property & Facility Management fee revenue reflects the sale of certain property management businesses in continental Europe in late 2019.mobile engineering business.

~~The increase in operating expenses, excluding reimbursed expenses, and fee-based operating expenses, excluding restructuring and acquisition charges,~~Adjusted EBITDA margin for the first ~~three months of 2020 compared with prior-year, correlated with the revenue growth but reflected the implementation of cost mitigation plans in response to the pandemic.~~

~~Adjusted EBITDA margin,~~quarter, calculated on a fee-revenue basis, was negative ~~3.4%~~8.0% in USD ~~for the quarter~~ (negative ~~2.9%~~8.4% in local currency), compared with negative ~~5.8% last year.~~3.4% in the prior-year quarter. The ~~margin improvement reflected an increase~~decline in ~~higher-margin transactional revenues~~revenue as well as the ~~implementation of~~above-noted contract loss contributed to the lower margin performance, more than offsetting the cost mitigation ~~plans.~~expense savings.

Table of Contents

Asia Pacific - Real Estate Services


										% Change									% Change
	Three Months Ended March 31,					Change in				in Local			Three Months Ended March 31,			Change in			in Local
($ in millions)	2020			2019		U.S. dollars				Currency		($ in millions)	2021		2020	U.S. dollars			Currency
Revenue	$	712.1		748.7		(36.6	)	(5	)%	(2	)%	Revenue	$	785.8	712.1	73.7	10	%	3	%
Reimbursements	(284.9		)	(341.1	)	56.2		(16	)	(13	)	Reimbursements	(366.9)		(284.9)	(82.0)	29		19
Revenue before reimbursements	$	427.2		407.6		19.6		5	%	8	%	Revenue before reimbursements	$	418.9	427.2	(8.3)	(2)	%	(8)	%
Gross contract costs	(249.5		)	(209.4	)	(40.1	)	19		22		Gross contract costs	(205.7)		(249.5)	43.8	(18)		(21)
Fee Revenue	$	177.7		198.2		(20.5	)	(10	)%	(7	)%
Fee revenue												Fee revenue	$	213.2	177.7	35.5	20	%	12	%
Leasing	22.6			33.3		(10.7	)	(32	)	(30	)	Leasing	27.8		22.6	5.2	23		16
Capital Markets	18.7			25.5		(6.8	)	(27	)	(23	)	Capital Markets	28.4		18.7	9.7	52		39
Property & Facility Management	73.3			74.3		(1.0	)	(1	)	2		Property & Facility Management	81.2		73.3	7.9	11		4
Project & Development Services	28.8			33.2		(4.4	)	(13	)	(10	)	Project & Development Services	29.6		28.8	0.8	3		(4)
Advisory, Consulting and Other	34.3			31.9		2.4		8		11		Advisory, Consulting and Other	46.2		34.3	11.9	35		24
Compensation, operating and administrative expenses excluding gross contract costs	168.0			191.1		(23.1	)	(12	)	(9	)	Compensation, operating and administrative expenses excluding gross contract costs	$	189.1	168.0	21.1	13	%	5	%

Depreciation and amortization	6.6			6.4		0.2		3		7		Depreciation and amortization	7.3		6.6	0.7	11		4
Segment fee-based operating expenses (excluding restructuring and acquisition charges)	174.6			197.5		(22.9	)	(12	)	(8	)	Segment fee-based operating expenses (excluding restructuring and acquisition charges)	196.4		174.6	21.8	12		5
Gross contract costs	249.5			209.4		40.1		19		22		Gross contract costs	205.7		249.5	(43.8)	(18)		(21)
Segment operating expenses (excluding reimbursed expenses)	$	424.1		406.9		17.2		4	%	7	%	Segment operating expenses (excluding reimbursed expenses)	$	402.1	424.1	(22.0)	(5)	%	(10)	%
Segment operating income	$	3.1		0.7		2.4		n.m.		n.m.
Equity earnings	$	(0.7	)	0.3		(1.0	)	n.m.		n.m.

Equity earnings (losses)												Equity earnings (losses)	$	1.0	(0.7)	1.7	n.m.
Segment income												Segment income	$	17.8	2.4	15.4	n.m.
Adjusted EBITDA	$	9.4		7.3		2.1		29	%	29	%	Adjusted EBITDA	$	25.0	9.4	15.6	n.m.

Asia Pacific realized the most notable impact this quarter from the pandemic. Office closures and work stoppages began in January in China and continued across the region in order to minimize the human impact of the pandemic. This is reflected in the revenue andPacific's double-digit fee revenue ~~declines, which were largely attributable to~~increase reflected strong growth in transaction-based revenue along with continued stability in Corporate Solutions. An increase in large-deal transactions, particularly in Singapore and Australia, drove revenue expansion in Capital Markets. Growth in Leasing was led by a pick-up in office volumes, especially in Greater China. Significant growth in valuations services, notably in Greater China and Australia, led Advisory, Consulting and Other.

Higher segment fee-based operating expenses, compared with 2020, was primarily attributable to revenue-related expense increases, partially offset by savings resulting from cost mitigation efforts during the trailing twelve months. Lower segment operating expenses, compared with last year, was due to a ~~lesser extent Japan, primarily~~decrease in transactions-based services lines. Despite this backdrop, Corporate Solutions was largely flat year-over-year as growth in integrated facilities management and advisory services was largely offset by the impact of temporary work stoppages to Project & Development Services mandates.

Segment operating expenses, excluding reimbursed expenses, for the first quarter of 2020 included an offset of $5.4 million from grants and subsidies from certain government relief programs established in response to the pandemic. The subsidies have been used in the receiving countries to retain employees and offset their compensation expense.gross contract costs.

Adjusted EBITDA margin for the quarter, calculated on a fee-revenue basis, was ~~5.3%~~11.7% in USD ~~for the quarter (5.2%~~(11.3% in local currency), compared with ~~3.7%~~5.3% last year. The ~~net~~significant margin ~~improvement reflected the government grants~~expansion was attributable to growth in transaction-based revenue and ~~subsidies noted above as well as the impact of cost mitigation plans. These items were partially offset by the revenue drivers~~expense savings noted above.

Table of Contents

LaSalle


							% Change
	Three Months Ended March 31,			Change in			in Local
($ in millions)	2021		2020	U.S. dollars			Currency
Revenue	$	91.2	104.9	(13.7)	(13)	%	(16)	%
Reimbursements	(1.5)		(1.8)	0.3	(17)		(24)
Revenue before reimbursements	$	89.7	103.1	(13.4)	(13)	%	(16)	%
Gross contract costs	(4.4)		(4.5)	0.1	(2)		(3)
Fee revenue	$	85.3	98.6	(13.3)	(13)	%	(17)	%
Advisory fees	79.3		82.0	(2.7)	(3)		(8)
Transaction fees & other	6.0		10.9	(4.9)	(45)		(47)
Incentive fees	—		5.7	(5.7)	(100)		(100)
Compensation, operating and administrative expenses excluding gross contract costs	$	77.2	82.6	(5.4)	(7)	%	(10)	%


Depreciation and amortization	1.7		1.8	(0.1)	(6)		(10)
Segment fee-based operating expenses (excluding restructuring and acquisition charges)	78.9		84.4	(5.5)	(7)		(10)
Gross contract costs	4.4		4.5	(0.1)	(2)		(3)
Segment operating expenses (excluding reimbursed expenses)	$	83.3	88.9	(5.6)	(6)	%	(9)	%

Equity earnings (losses)	$	13.0	(40.3)	53.3	n.m.		n.m.
Segment income (loss)	$	19.4	(26.1)	45.5	n.m.		n.m.
Adjusted EBITDA	$	20.9	(24.4)	45.3	n.m.		n.m.

% Change
Three Months Ended March 31, Change in in Local
($ in millions) 2020 2019 U.S. dollars Currency
Revenue $ 104.9
98.4
6.5
7 % 8 %
Reimbursements (1.8 ) (1.9 ) 0.1
(5 ) (1 )
Revenue before reimbursements $ 103.1
96.5
6.6
7 % 8 %
Gross contract costs (4.5 ) (2.8 ) (1.7 ) 61
58
Fee Revenue $ 98.6
93.7
4.9
5 % 6 %
Advisory fees 82.0
73.8
8.2
11
12
Transaction fees & other 10.9
12.4
(1.5 ) (12 ) (10 )
Incentive fees 5.7
7.5
(1.8 ) (24 ) (24 )
Compensation, operating and administrative expenses excluding gross contract costs 82.6
80.1
2.5
3
4
Depreciation and amortization 1.8
1.5
0.3
20
20
Segment fee-based operating expenses (excluding restructuring and acquisition charges) 84.4
81.6
2.8
3
4
Gross contract costs 4.5
2.8
1.7
61
58
Segment operating expenses (excluding reimbursed expenses) $ 88.9
84.4
4.5
5 % 6 %
Segment operating income $ 14.2
12.1
2.1
17 % 19 %
Equity (losses) earnings $ (40.3 ) 4.9
(45.2 ) n.m.
n.m.
Adjusted EBITDA $ (24.4 ) 18.3
(42.7 ) n.m.
n.m.

~~LaSalle's strong~~Lower LaSalle advisory ~~fee growth across all geographies followed exceptional private equity capital raising~~fees were largely attributable to pandemic-driven valuation declines in assets under management over the trailing twelve months. Transaction and Incentive fees reflected decreased acquisition/transaction activity in 2021.

~~As a direct result of~~Equity earnings in the ~~pandemic's expected impact on real estate prices, we recognized Equity losses this~~current quarter ~~to reflect decreases~~were substantially driven by increases to the estimated fair value of underlying real estate investments within LaSalle's co-investment portfolio. In the prior year, equity losses were largely driven by the pandemic's impact on real estate prices which drove lower estimated fair values within the portfolio.

~~Segment~~The decreases in segment operating ~~income was up 19%~~expenses and segment fee-based operating expenses, compared with ~~2019.~~ the prior-year quarter, was driven by lower revenue-related variable expenses.

Adjusted EBITDA margin ~~was negative 24.8% in USD~~ for the quarter ~~(negative 24.3%~~was 24.5% in USD (24.7% local currency), compared with ~~19.5%~~negative 24.8% last year. ~~The~~Margin improvement was attributable to the year-over-year change in equity ~~(losses)~~ earnings, ~~represented over 100% of the margin decline and decrease in Adjusted EBITDA. The advisory fee growth~~ partially offset ~~these equity losses.~~by lower revenue.

AUM was ~~$69.5~~$70.9 billion as of March 31, ~~2020,~~2021, an increase of 3% in USD ~~(1%~~(no change in local currency) from ~~$67.6~~$68.9 billion as of December 31, ~~2019.~~2020. The AUM increase resulted from (i) ~~$3.7~~$1.9 billion of foreign currency increases, (ii) $1.1 billion of acquisitions, ~~(ii) $1.2~~and (iii) $0.9 billion of net valuation increases, ~~and (iii) $1.4 billion of foreign currency increases,~~ partially offset by ~~(iv) $4.4~~$1.9 billion of dispositions and withdrawals.

Table of Contents

LIQUIDITY AND CAPITAL RESOURCES

We finance our operations, co-investment activity, share repurchases and dividend payments, capital expenditures and business acquisitions with internally generated funds, borrowings on our Facility, and through issuance of Long-term debt.

Cash Flows from Operating Activities

Operating activities used ~~$546.1~~$461.8 million of cash in the first three months of ~~2020,~~2021, compared with ~~$551.5~~$546.1 million of cash used during the same period in ~~2019.~~2020. The decrease in cash used ~~by operating activities is driven by increased cash provided by earnings, offset by increased annual~~was primarily due to less incentive compensation paid ~~to employees, reflecting our stronger full-year 2019~~in 2021, compared with 2020, a result of 2020 business performance compared with ~~the full-year 2018.~~2019. This was partially offset by lower collections of trade receivables, reflecting higher revenue in 2019 compared with 2020.

Cash Flows from Investing Activities

We used ~~$90.5~~$97.8 million of cash for investing activities during the first three months of ~~2020,~~2021, as compared to ~~$91.0~~$90.5 million used during the same period in ~~2019.~~2020. The slight ~~decrease~~increase in cash used was driven by an ~~absence of business~~increase in acquisitions ~~this quarter,~~in investment properties (less than wholly-owned), partially offset by ~~an increase~~a decrease in net capital ~~contribution activity related~~contributions to ~~co-investments in~~ real estate ventures and ~~JLL Spark investments.~~lower capital expenditures in 2021. We discuss these key drivers individually below in further detail.

Cash Flows from Financing Activities

Financing activities provided ~~$883.3~~$376.7 million of cash during the first three months of ~~2020,~~2021, as compared to ~~$592.8~~$883.3 million provided by financing activities during the same period in ~~2019.~~2020. The net ~~increase~~decrease of ~~$290.5~~$506.6 million in cash flows from financing activities is substantially driven by ~~the increase~~a decrease in ~~the outstanding~~borrowings on our Facility. The borrowings on our Facility toin the first quarter fund seasonal liquidity ~~including~~needs, specifically annual incentive compensation payments made in the first quarter, which were notably lower in 2021 as discussed in the cash flows from operating ~~activities.~~activities section above.

Debt

Our $2.75 billion Facility matures on May 17, 2023. As of March 31, ~~2020,~~2021, we had outstanding borrowings under the Facility of ~~$1,450.0~~$350.0 million and outstanding letters of credit of $0.7 million. As of December 31, ~~2019,~~2020, we had ~~$525.0 million of~~no outstanding borrowings under the Facility and outstanding letters of credit of ~~$0.8~~$0.7 million. The average outstanding borrowings under the Facility were ~~$935.2~~$184.4 million and ~~$209.0~~$935.2 million during the three months ended March 31, ~~2020~~2021 and ~~2019, respectively.~~2020.

In addition to our Facility, we had the capacity to borrow up to ~~$86.0~~$63.4 million under local overdraft facilities as of March 31, ~~2020.~~2021. We had Short-term borrowings (including ~~capital~~financing lease obligations, overdrawn bank accounts and local overdraft facilities) of ~~$125.2~~$90.6 million and ~~$120.1~~$62.0 million as of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively, of which ~~$35.8~~$16.0 million and ~~$44.8~~$12.0 million, respectively, were attributable to local overdraft facilities.

We will continue to use the Facility for working capital needs (including payment of accrued incentive compensation), co-investment activities, ~~dividend payments,~~ share repurchases, capital expenditures and ~~business~~ acquisitions. See Note 9, Debt, in the Notes to Condensed Consolidated Financial Statements for additional information on our Facility, Long-term debt and Short-term borrowings.

On April 14, 2021, we renewed our Facility and extend its maturity date to April 2026. See Note 13, Subsequent Events, in the Notes to Condensed Consolidated Financial Statement for additional information about the Amendment.

Investment Activity

As of March 31, ~~2020,~~2021, we had ~~total investments~~a carrying value of ~~$390.8~~$545.1 million in investments, primarily related to LaSalle ~~co-investments.~~co-investments in real estate ventures and investments by JLL Technologies in early-stage proptech companies. For the three months ended March 31, ~~2020,~~2021, and ~~2019,~~2020, funding of investments exceeded return of capital by ~~$40.6~~$29.8 million, and ~~$3.4~~$40.6 million, respectively. We expect to continue to pursue strategic co-investment opportunities with our investment management clients globally as co-investment remains an important foundation to the continued growth of LaSalle's business. In addition, we expect continued investments by JLL ~~Spark venture funds.~~Technologies.

See Note 6, Investments in Real Estate Ventures, in the Notes to Condensed Consolidated Financial Statements for additional information on our investment activity.

Table of Contents

Share Repurchase and Dividend Programs

On ~~October 31, 2019,~~February 21, 2021, our Board of Directors ~~approved a new share repurchase program (the "Program") authorizing~~authorized an additional $500.0 million for the repurchase ~~of up to $200 million~~ of our common stock in the open market and privately negotiated transactions. During the three months ended March 31, 2021 we did not repurchase any shares. During the three months ended March 31, 2020 we repurchased nearly ~~188 thousand~~ 188,000 shares for $25.0 million.As of March 31, ~~2020, $175.0~~2021, $600.0 million remained authorized for repurchases under ~~the Program.~~ ~~There were no shares repurchased during the~~ ~~three months ended March 31, 2019.~~our share repurchase program.

Capital Expenditures

Net capital additions for the three months ended March 31, 2021 and 2020, ~~and 2019,~~ were ~~$44.4~~$34.6 million and ~~$44.6~~$44.4 million, respectively. Our capital expenditures in ~~2020~~2021 were primarily for ~~software, computer-related hardware, and improvements to~~ leased office ~~spaces.~~spaces improvements and purchased/developed software.

~~In addition, net~~Investment Asset Activity of Less Than Wholly-Owned Entities

Net capital additions made by consolidated VIEs in which we held no equity interest for the three months ended March 31, 2021 and 2020, ~~and 2019,~~ were ~~$3.2~~$37.2 million and ~~$15.6~~$3.2 million, respectively, primarily to acquire real estate (net of real estate sales).

Business Acquisitions

During the three months ended March 31, ~~2020,~~2021, we paid ~~$12.9~~$26.4 million for business acquisitions. This included $0.2 million of payments relating to acquisitions in 2021 and $26.2 million for deferred business acquisition and earn-out obligations related to acquisitions completed in prior ~~years.~~ years, which are primarily reflected in cash flows from financing activities.

Terms for many of our past acquisitions have typically included cash paid at closing with provisions for additional deferred consideration and earn-out payments subject to certain contract requirements, including the passage of time and performance, respectively. Deferred business acquisition obligations totaled ~~$45.2~~$26.9 million as of March 31, ~~2020.~~2021. These obligations represent the current discounted values of payments due to sellers of businesses for which our acquisition had been completed as of the balance sheet date and for which the only remaining condition on those payments is the passage of time. As of March 31, ~~2020,~~2021, we had the potential to make earn-out payments for a maximum of ~~$254.0~~$157.8 million on 4424 completed acquisitions subject to the achievement of certain performance conditions. Refer to Note 5, Business Combinations, Goodwill and Other Intangible Assets, in the Notes to the Condensed Consolidated Financial Statements for further information on Business Acquisitions.

We will continue to consider acquisitions that we believe will strengthen our market position, increase our profitability, and supplement our organic growth.

Repatriation of Foreign Earnings

Based on our historical experience and future business plans, we do not expect to repatriate our foreign-sourced earnings to the United States. We believe our policy of permanently investing earnings of foreign subsidiaries does not significantly impact our liquidity. As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, we had total cash and cash equivalents of ~~$720.7~~$456.6 million and ~~$451.9~~$574.3 million, respectively, of which approximately ~~$350.1~~$375.4 million and ~~$385.4~~$445.2 million, respectively, was held by foreign subsidiaries.

Restricted Net Assets

We face regulatory restrictions in certain countries that limit or prevent the transfer of funds to other countries or the exchange of the local currency to other currencies. However, we generally face no such restrictions with regard to the use or application of funds for ordinary course business activities within such countries. The assets of these countries aggregated to approximately 4% ~~and 5%~~ of our total assets as of March 31, ~~2020~~2021 and December 31, ~~2019, respectively.~~2020.

Off-Balance Sheet Arrangements

We have unfunded capital commitments to investment vehicles and direct investments for future co-investments, totaling a maximum of ~~$309.0~~$309.9 million as of March 31, ~~2020.~~2021. See our discussion of unfunded commitments in Note 6, Investments in Real Estate Ventures, in the Notes to Condensed Consolidated Financial Statements.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report, ~~our Annual Report to Shareholders~~including this Management's Discussion and ~~our other filings with the Securities~~Analysis of Financial Condition and ~~Exchange Commission (“SEC”) contain certain~~Results of Operations, contains “forward-looking statements” within the meaning of the ~~Private~~federal securities laws. All such statements are qualified by this cautionary note, which is provided pursuant to the safe harbor provisions of Section 27A of the Securities ~~Litigation Reform~~ Act of ~~1995.~~ 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may also be included in our other public filings, press releases, our website, and oral and written presentations by management.

Statements in the future tense, and all statements accompanied by terms such as “believe,” “project,” “expect,” “estimate,” “assume,” “intend,” “anticipate,” “target,” “plan” and variations thereof and similar terms, are intended to be forward-looking statements. ~~Forward-looking~~Such statements ~~are made subject~~do not relate strictly to ~~the safe harbor protections of the federal securities laws pursuant to Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.~~

~~From time to time, we also include written~~historical or oral forward-looking statements in other publicly disclosed materials (including, but not limited to other filings with the SEC, press releases, presentations and communications by JLL or its management). Such statementscurrent facts as they relate to our intent, belief and current expectations about our strategic direction, prospects and future results, and give our current expectations or forecasts of future ~~events, including,~~events. This includes, but is not limited to, ~~the Company's~~our expectations regarding the potential impact of the COVID-19 outbreak and the efficacy of vaccines and therapeutics on reducing the spread of the virus, as well as any further impacts to us, the economy as a whole, and/or related government and regulatory restrictions issued to combat the global ~~pandemic; they do not relate strictly to historical or current facts.~~pandemic, including any adverse changes in such restrictions that may impact us. Management believes that these forward-looking statements are reasonable as and when made. However, caution should be taken not to place undue reliance on any such forward-looking statements because such statements speak only as of the date when made.

Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or anticipated results. These risks and uncertainties are described in our Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 in Part I, Item 1A. Risk Factors and may also be described from time to time in our ~~future reports filed~~subsequent filings with the ~~SEC.~~Securities and Exchange Commission. You should consider the limitations on, and risks associated with, forward-looking statements and not unduly rely on the accuracy of predictions contained in such forward-looking statements. We do not undertake any obligation to update forward-looking statements to reflect events, circumstances, changes in expectations or the occurrence of unanticipated events after the date of those statements.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

MARKET AND OTHER RISK FACTORS

Interest Rates

We assess interest rate sensitivity to estimate the potential effect of rising short-term interest rates on our variable-rate debt. If short-term interest rates were 50 basis points higher during ~~2020~~2021 on our variable-rate debt, our results would reflect an increase of ~~$0.7~~$0.2 million to Interest expense, net of interest income, for the three months ended March 31, ~~2020.~~2021.

Foreign Exchange

The following outlines the significant functional currencies of our revenue, highlighting where exposure to movements in foreign exchange impact our operations in international markets.


	Three Months Ended March 31,					Three Months Ended March 31,
	2020		2019				2021		2020
British Pound	8	%	9	%	British Pound		9	%	8	%
Euro	8		8		Euro		7		8
Other	25		27		Other		27		25
Revenue exposed to foreign exchange rates	41	%	44	%	Revenue exposed to foreign exchange rates		43	%	41	%
United States Dollar	59		56
United States dollar					United States dollar		57		59
Total Revenue	100	%	100	%	Total Revenue		100	%	100	%

To show the impact foreign currencies have on our results of operations, we present the change in local currency for revenue and operating expenses on a consolidated basis and by operating segment in Management's Discussion and Analysis of Financial Condition and Results of Operations included herein. For additional detail of the impact of foreign exchange rates on our results of operations, see Management's Discussion and Analysis of Financial Condition and Results of Operations included herein.

We enter into forward foreign currency exchange contracts to manage currency risks associated with intercompany lending and cash management practices. See Note 8, Fair Value Measurements, for further discussion of our forward contracts.

~~Disclosure of Limitations~~

As the information presented above includes only those exposures that exist as of March 31, 2020, it does not consider those exposures or positions which could arise after that date. The information we present has limited predictive value. As a result, the ultimate realized gain or loss with respect to interest rate and foreign currency fluctuations will depend on the exposures that arise during the applicable period, the hedging strategies at the time, and interest and foreign currency rates.

~~For other risk factors inherent in our business, see Item 1A. Risk Factors in our 2019 Annual Report on Form 10-K.~~

Item 4. Controls and Procedures

The Company has established disclosure controls and procedures to ensure material information relating to the Company, including its consolidated subsidiaries, is made known to the officers who certify the Company's financial reports and to the other members of senior management and the Board of Directors.

Under the supervision and with the participation of the Company's management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded our disclosure controls and procedures were effective as of the end of the period covered by this report. There were no changes in the Company's internal control over financial reporting during the quarter ended March 31, ~~2020,~~2021, that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

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Part II. Other Information

Item 1. Legal Proceedings

We are a defendant or plaintiff in various litigation matters arising in the ordinary course of business, some of which involve claims for damages that are substantial in amount. Many of these litigation matters are covered by insurance (including insurance provided through a captive insurance company), although they may nevertheless be subject to large deductibles and the amounts being claimed may exceed the available insurance. Although we cannot determine the ultimate liability for these matters based upon information currently available, we believe the ultimate resolution of such claims and litigation will not have a material adverse effect on our financial position, results of operations or liquidity.

Item 1A. Risk Factors

There have been no material changes to our risk factors as previously disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~

~~Item 2. Unregistered Sales of Equity Securities and Use of Proceeds~~

~~The following table provides information about our purchases of equity securities that are registered by us pursuant to Section 12 of the Exchange Act during the quarter ended March 31, 2020:~~

Period Total number of shares purchased Weighted average price paid per share Total number of shares purchased as part of publicly announced plan Approximate dollar value of shares that may yet be purchased under the plan
January 1, 2020 - January 31, 2020 —
$ —
—
$ 200.0
February 1, 2020 - February 29, 2020 10,276
$ 138.83
10,276
$ 198.6
March 1, 2020 - March 31, 2020 177,477
$ 132.79
177,477
$ 175.0
Total 187,753
187,753

~~Item 5. Other Information~~

~~Other Information~~

Effective April 1, 2020, in conjunction with a series of measures we have taken in response to extraordinary business challenges brought on by the current COVID-19 global pandemic crisis, Christian Ulbrich, our Chief Executive Officer and President, and the entire Global Executive Board executed salary reduction agreements irrevocably waiving 50% of their annual base salary for the remainder of 2020. We are including this disclosure and related Exhibit 10.1 in this Form 10-Q rather than filing a Form 8-K under Item 5.02.

In addition, each member of the Board has agreed by irrevocable waiver to forego receipt of 50% of the cash retainer fees payable to her or him during the remainder of 2020, effective as of the quarterly payment made April 1, 2020.

~~Corporate Governance~~

Our policies and practices reflect corporate governance initiatives we believe comply with the listing requirements of the New York Stock Exchange, on which our common stock is traded, the corporate governance requirements of the Sarbanes-Oxley Act of 2002 as currently in effect, various regulations issued by the SEC and certain provisions of the General Corporation Law in the State of Maryland, where JLL is incorporated. We maintain a corporate governance section on our public website which includes key information about our corporate governance initiatives, such as our Corporate Governance Guidelines, Charters for the three Committees of our Board of Directors, a Statement of Qualifications of Members of the Board of Directors and our Code of Business Ethics. The Board of Directors regularly reviews corporate governance developments and modifies our Guidelines and Charters as warranted. The corporate governance section can be found on our website at ~~www.us.jll.com~~ ~~by clicking "Investor Relations" and then "Governance."~~

~~Table of Contents~~

~~Corporate Officers~~

~~The names and titles of our corporate executive officers, as of March 31, 2020, were as follows:~~

~~Global Executive Board~~

~~Christian Ulbrich~~

~~Chief Executive Officer and President~~

~~Stephanie Plaines~~

~~Chief Financial Officer~~

~~Richard Bloxam~~

~~Chief Executive Officer, Global Capital Markets~~

~~Anthony Couse~~

~~Chief Executive Officer, Asia Pacific~~

~~Guy Grainger~~

~~Chief Executive Officer, Europe, Middle East and Africa~~

~~Jeff A. Jacobson~~

~~Chief Executive Officer, LaSalle Investment Management~~

~~Yishai Lerner~~

~~Co-Chief Executive Officer, JLL Technologies~~

~~Patricia Maxson~~

~~Chief Administrative Officer~~

~~Neil Murray~~

~~Chief Executive Officer, Global Corporate Solutions~~

~~Gregory P. O'Brien~~

~~Chief Executive Officer, Americas~~

~~Mihir Shah~~

~~Co-Chief Executive Officer, JLL Technologies~~

~~Additional Global Corporate Officers~~



~~Mary E. Bilbrey~~	~~James S. Jasionowski~~
~~Chief Human Resources Officer~~	~~Chief Tax Officer~~

~~Louis F. Bowers~~	~~Judith I. Tempelman~~
~~Controller~~	~~Head of Corporate Development~~

~~Bryan J. Duncan~~	~~Alan Tse~~
~~Treasurer~~	~~Chief Legal Officer and Corporate Secretary~~

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Item 6. Exhibits


Exhibit Number		Description
10 .1		Form Change in Control Agreement for Global Executive Board (Incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K dated March 4, 2021 (File No. 001-13145))

10.2		Amendment No. 2 to the Second Amended and Restated Multicurrency Credit Agreement, dated as of April 14, 2021 (Incorporated by reference to Exhibit ~~Number~~10.1 to the Current Report on Form 8-K dated April 16, 2021 (File No. 001-13145))
		~~Description~~
~~10.1~~31.1*		~~Form of Global Executive Board Salary Reduction Agreement~~

~~31.1~~*	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*Filed herewith

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Signature

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 6th day of May, ~~2020.~~2021.



JONES LANG LASALLE INCORPORATED

By:						/s/ ~~Stephanie Plaines~~Karen Brennan
						~~Stephanie Plaines~~Karen Brennan
						Chief Financial Officer
						(Authorized Officer and Principal Financial Officer)

4641



	Company Shareholder's Equity
										Accumulated
					Additional			Shares		Other
(in millions, except share and per share data) (unaudited)	Common Stock				Paid-In		Retained	Held in		Comprehensive		Noncontrolling		Total
(in millions, except share and per share data) (unaudited)	Shares		Amount		Capital		Earnings	Trust		Loss		Interest		Equity
December 31, 2018	45,599,418		$	0.5	1,057.3		3,095.7	(5.8	)	(456.2	)	43.0		$	3,734.5
Net income	—		—		—		21.3	—		—		(0.1	)	21.2
Shares issued under stock-based compensation programs	198,575		—		2.0		—	—		—		—		2.0
Shares repurchased for payment of taxes on stock-based compensation	(58,750	)	—		(9.7	)	—	—		—		—		(9.7		)
Amortization of stock-based compensation	—		—		7.0		—	—		—		—		7.0
Change in pension liabilities, net of tax	—		—		—		—	—		(1.0	)	—		(1.0		)
Foreign currency translation adjustments	—		—		—		—	—		31.3		—		31.3
Increase in amounts attributable to noncontrolling interest	—		—		—		—	—		—		9.8		9.8
March 31, 2019	45,739,243		$	0.5	1,056.6		3,117.0	(5.8	)	(425.9	)	52.7		$	3,795.1



	Published			Adjustment due to		As Reported Under
	December 31, 2019			adoption of		ASC Topic 326 on January 1, 2020
(in millions)	(audited)			ASC Topic 326		(unaudited)
Assets
Allowance for trade receivables	$	(68.1	)	(3.6	)	$	(71.7	)
Deferred tax assets, net	245.4			5.5		250.9
Allowance for contract assets ⁽¹⁾	—			(1.7	)	(1.7		)
Liabilities and equity
Loan loss guarantee reserve ⁽²⁾	$	—		15.1		$	15.1
Retained earnings	3,588.3			(14.9	)	3,573.4



Period	Total number of shares purchased	Weighted average price paid per share			Total number of shares purchased as part of publicly announced plan	Approximate dollar value of shares that may yet be purchased under the plan
January 1, 2020 - January 31, 2020	—		$	—	—		$	200.0
February 1, 2020 - February 29, 2020	10,276		$	138.83	10,276		$	198.6
March 1, 2020 - March 31, 2020	177,477		$	132.79	177,477		$	175.0
Total	187,753				187,753