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 ~~September~~June 30, ~~2022~~2023

☐ 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 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 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 ~~October~~July 31, ~~2022~~2023 was ~~47,462,564.~~47,682,168.

Table of Contents




Part I	Financial Information

Item 1.	Condensed Consolidated Financial Statements:	3

	Balance Sheets as of ~~September~~June ~~30, 2022~~3 0 , 2023 and December 31, ~~2021~~2022	3

	Statements of Comprehensive Income for the Three and ~~Nine~~Six Months Ended ~~September~~June ~~30,~~3 0 , 2023 and 2022 ~~and 2021~~	4

	Statements of Changes in Equity for the Three and ~~Nine~~Six Months Ended ~~September~~June ~~30,~~3 0 , 2023 and 2022 ~~and 2021~~	5

	Statements of Cash Flows for the ~~Nine~~Six Months Ended ~~September~~June ~~30,~~3 0 , 2023 and 2022 ~~and 2021~~	7

	Notes to Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2827

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	5150

Item 4.	Controls and Procedures	5150

Part II	Other Information

Item 1.	Legal Proceedings	5251

Item 1A.	Risk Factors	5251

~~Item 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~	52



Item 6.	Exhibits	5352

Signature		5453

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)	(in millions, except share and per share data)	September 30, 2022		December 31, 2021	(in millions, except share and per share data)	June 30, 2023		December 31, 2022
Assets	Assets	(unaudited)			Assets	(unaudited)
Current assets:	Current assets:				Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	489.4	593.7	Cash and cash equivalents	$	402.5	519.3
Trade receivables, net of allowance of $72.8 and $67.6		1,912.5		2,004.1
Trade receivables, net of allowance of $76.8 and $66.7					Trade receivables, net of allowance of $76.8 and $66.7	1,982.0		2,148.8
Notes and other receivables	Notes and other receivables	377.9		389.3	Notes and other receivables	410.9		469.5
Reimbursable receivables	Reimbursable receivables	1,840.5		1,734.5	Reimbursable receivables	1,910.9		2,005.7
Warehouse receivables	Warehouse receivables	671.9		822.3	Warehouse receivables	1,049.0		463.2
Short-term contract assets, net of allowance of $2.5 and $2.5		369.9		343.1
Short-term contract assets, net of allowance of $1.9 and $1.9					Short-term contract assets, net of allowance of $1.9 and $1.9	357.2		359.7
Prepaid and other	Prepaid and other	707.8		500.7	Prepaid and other	593.3		603.5
Total current assets	Total current assets	6,369.9		6,387.7	Total current assets	6,705.8		6,569.7
Property and equipment, net of accumulated depreciation of $955.8 and $909.1		731.5		740.0
Property and equipment, net of accumulated depreciation of $1,030.4 and $960.5					Property and equipment, net of accumulated depreciation of $1,030.4 and $960.5	585.5		582.9
Operating lease right-of-use assets	Operating lease right-of-use assets	776.6		723.4	Operating lease right-of-use assets	761.3		776.3
Goodwill	Goodwill	4,454.8		4,611.6	Goodwill	4,577.7		4,528.0
Identified intangibles, net of accumulated amortization of $423.6 and $340.1		861.6		887.0
Investments, including $786.7 and $639.6 at fair value		890.9		745.7
Identified intangibles, net of accumulated amortization of $499.0 and $445.8					Identified intangibles, net of accumulated amortization of $499.0 and $445.8	821.1		858.5
Investments, including $802.5 and $794.9 at fair value					Investments, including $802.5 and $794.9 at fair value	872.7		873.8
Long-term receivables	Long-term receivables	306.0		316.4	Long-term receivables	372.1		331.1
Deferred tax assets, net	Deferred tax assets, net	249.6		330.8	Deferred tax assets, net	394.6		379.6
Deferred compensation plan	Deferred compensation plan	520.2		528.8	Deferred compensation plan	559.5		517.9
Other	Other	217.5		233.6	Other	175.2		175.9
Total assets	Total assets	$	15,378.6	15,505.0	Total assets	$	15,825.5	15,593.7
Liabilities and Equity	Liabilities and Equity				Liabilities and Equity
Current liabilities:	Current liabilities:				Current liabilities:
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	$	858.4	1,262.8	Accounts payable and accrued liabilities	$	1,054.6	1,236.8
Reimbursable payables	Reimbursable payables	1,309.4		1,350.0	Reimbursable payables	1,430.2		1,579.5
Accrued compensation and benefits	Accrued compensation and benefits	1,512.0		2,029.5	Accrued compensation and benefits	1,141.2		1,749.8
Short-term borrowings	Short-term borrowings	244.2		147.9	Short-term borrowings	112.1		164.2
Current maturities of long-term debt, net of debt issuance costs of $— and $0.3		—		274.7

Short-term contract liabilities and deferred income	Short-term contract liabilities and deferred income	221.0		208.2	Short-term contract liabilities and deferred income	213.6		216.5
Short-term acquisition-related obligations	Short-term acquisition-related obligations	45.2		45.8	Short-term acquisition-related obligations	20.5		23.1
Warehouse facilities	Warehouse facilities	685.0		795.7	Warehouse facilities	941.8		455.3

Short-term operating lease liabilities	Short-term operating lease liabilities	147.8		153.8	Short-term operating lease liabilities	164.3		156.4
Other	Other	380.7		218.1	Other	412.4		330.5
Total current liabilities	Total current liabilities	5,403.7		6,486.5	Total current liabilities	5,490.7		5,912.1
Credit facility, net of debt issuance costs of $12.1 and $11.8		1,587.9		138.2
Long-term debt, net of debt issuance costs of $1.3 and $1.4		341.5		395.6
Credit facility, net of debt issuance costs of $9.5 and $11.2					Credit facility, net of debt issuance costs of $9.5 and $11.2	1,840.5		1,213.8
Long-term debt, net of debt issuance costs of $1.1 and $1.2					Long-term debt, net of debt issuance costs of $1.1 and $1.2	380.7		372.8
Deferred tax liabilities, net	Deferred tax liabilities, net	199.6		179.7	Deferred tax liabilities, net	191.6		194.0
Deferred compensation	Deferred compensation	483.6		525.4	Deferred compensation	518.3		492.4

Long-term acquisition-related obligations	Long-term acquisition-related obligations	59.3		66.3	Long-term acquisition-related obligations	58.6		76.3

Long-term operating lease liabilities	Long-term operating lease liabilities	739.5		714.4	Long-term operating lease liabilities	766.6		775.8
Other	Other	554.1		577.7	Other	386.6		407.0
Total liabilities	Total liabilities	9,369.2		9,083.8	Total liabilities	9,633.6		9,444.2

Redeemable noncontrolling interest	Redeemable noncontrolling interest	7.2		7.8	Redeemable noncontrolling interest	7.1		7.0
Company shareholders' equity:	Company shareholders' equity:				Company shareholders' equity:
Common stock, $0.01 par value per share, 100,000,000 shares authorized; 52,085,128 and 52,076,800 shares issued; 47,516,574 and 50,024,139 outstanding		0.5		0.5
Common stock, $0.01 par value per share, 100,000,000 shares authorized; 52,095,238 and 52,085,968 shares issued; 47,720,950 and 47,507,758 outstanding					Common stock, $0.01 par value per share, 100,000,000 shares authorized; 52,095,238 and 52,085,968 shares issued; 47,720,950 and 47,507,758 outstanding	0.5		0.5
Additional paid-in capital	Additional paid-in capital	2,034.5		2,053.7	Additional paid-in capital	2,015.3		2,022.6
Retained earnings	Retained earnings	5,415.6		4,937.6	Retained earnings	5,567.6		5,590.4
Treasury stock, at cost, 4,568,554 and 2,052,661 shares		(950.9)		(406.3)
Treasury stock, at cost, 4,374,288 and 4,578,210 shares					Treasury stock, at cost, 4,374,288 and 4,578,210 shares	(895.8)		(934.6)
Shares held in trust	Shares held in trust	(5.1)		(5.2)	Shares held in trust	(11.6)		(9.8)
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(723.0)		(395.4)	Accumulated other comprehensive loss	(611.4)		(648.2)
Total Company shareholders’ equity	Total Company shareholders’ equity	5,771.6		6,184.9	Total Company shareholders’ equity	6,064.6		6,020.9
Noncontrolling interest	Noncontrolling interest	230.6		228.5	Noncontrolling interest	120.2		121.6
Total equity	Total equity	6,002.2		6,413.4	Total equity	6,184.8		6,142.5
Total liabilities, redeemable noncontrolling interest and equity	Total liabilities, redeemable noncontrolling interest and equity	$	15,378.6	15,505.0	Total liabilities, redeemable noncontrolling interest and equity	$	15,825.5	15,593.7

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)	(in millions, except share and per share data) (unaudited)	Three Months Ended September 30,			Nine Months Ended September 30,			(in millions, except share and per share data) (unaudited)	Three Months Ended June 30,			Six Months Ended June 30,
		2022		2021	2022		2021		2023		2022	2023		2022

Revenue	Revenue	$	5,177.5	4,889.2	$	15,257.3	13,421.3	Revenue	$	5,052.5	5,278.4	$	9,768.0	10,079.8
Operating expenses:	Operating expenses:							Operating expenses:
Compensation and benefits	Compensation and benefits	$	2,496.2	2,416.1	$	7,461.4	6,613.9	Compensation and benefits	$	2,417.0	2,554.4	$	4,670.0	4,965.2
Operating, administrative and other	Operating, administrative and other	2,402.0		2,111.8	6,950.6		5,998.3	Operating, administrative and other	2,414.6		2,407.6	4,766.1		4,548.6

Depreciation and amortization	Depreciation and amortization	55.7		52.8	165.5		160.3	Depreciation and amortization	59.9		55.4	117.4		109.8
Restructuring and acquisition charges	Restructuring and acquisition charges	21.0		15.6	66.4		50.9	Restructuring and acquisition charges	11.8		25.9	47.5		45.4
Total operating expenses	Total operating expenses	$	4,974.9	4,596.3	$	14,643.9	12,823.4	Total operating expenses	$	4,903.3	5,043.3	$	9,601.0	9,669.0
Operating income	Operating income	$	202.6	292.9	$	613.4	597.9	Operating income	$	149.2	235.1	$	167.0	410.8
Interest expense, net of interest income	Interest expense, net of interest income	23.2		9.6	49.1		30.6	Interest expense, net of interest income	40.5		15.7	66.8		25.9
Equity earnings		0.5		17.4	72.6		106.7
Other income		0.5		1.3	136.0		12.9
Income before income taxes and noncontrolling interest		180.4		302.0	772.9		686.9
Income tax provision		42.3		65.3	155.4		148.4
Net income		138.1		236.7	617.5		538.5
Net (loss) income attributable to noncontrolling interest		(2.1)		(0.5)	137.8		(1.7)

Net income attributable to common shareholders		$	140.2	237.2	$	479.7	540.2
Basic earnings per common share		$	2.93	4.67	$	9.83	10.57
Equity (losses) earnings								Equity (losses) earnings	(103.5)		53.6	(106.1)		72.1
Other (expense) income								Other (expense) income	(1.2)		135.3	(1.1)		135.5
Income (loss) before income taxes and noncontrolling interest								Income (loss) before income taxes and noncontrolling interest	4.0		408.3	(7.0)		592.5
Income tax provision (benefit)								Income tax provision (benefit)	0.8		72.8	(1.5)		113.1
Net income (loss)								Net income (loss)	3.2		335.5	(5.5)		479.4
Net income attributable to noncontrolling interest								Net income attributable to noncontrolling interest	0.7		141.6	1.2		139.9
Net income (loss) attributable to common shareholders								Net income (loss) attributable to common shareholders	$	2.5	193.9	$	(6.7)	339.5
Basic earnings (loss) per common share								Basic earnings (loss) per common share	$	0.05	3.98	$	(0.14)	6.89
Basic weighted average shares outstanding (in 000's)	Basic weighted average shares outstanding (in 000's)	47,863		50,851	48,782		51,101	Basic weighted average shares outstanding (in 000's)	47,748		48,718	47,652		49,247
Diluted earnings per common share		$	2.88	4.57	$	9.65	10.35
Diluted earnings (loss) per common share								Diluted earnings (loss) per common share	$	0.05	3.90	$	(0.14)	6.75
Diluted weighted average shares outstanding (in 000's)	Diluted weighted average shares outstanding (in 000's)	48,629		51,944	49,727		52,178	Diluted weighted average shares outstanding (in 000's)	48,334		49,651	47,652		50,292

Net income attributable to common shareholders		$	140.2	237.2	$	479.7	540.2
Net income (loss) attributable to common shareholders								Net income (loss) attributable to common shareholders	$	2.5	193.9	$	(6.7)	339.5
Change in pension liabilities, net of tax	Change in pension liabilities, net of tax	—		—	—		0.5	Change in pension liabilities, net of tax	(1.1)		—	(1.1)		—
Foreign currency translation adjustments	Foreign currency translation adjustments	(139.1)		(47.2)	(327.6)		(53.6)	Foreign currency translation adjustments	11.1		(164.4)	37.9		(188.5)
Comprehensive income attributable to common shareholders	Comprehensive income attributable to common shareholders	$	1.1	190.0	$	152.1	487.1	Comprehensive income attributable to common shareholders	$	12.5	29.5	$	30.1	151.0

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 AND ~~NINE~~SIX MONTHS ENDED ~~SEPTEMBER~~JUNE 30, ~~2022~~2023 AND ~~2021~~2022


		Company Shareholders' Equity												Company Shareholders' Equity

		Common Stock			Additional		Shares							Common Stock			Additional		Shares
(in millions, except share and per share data) (unaudited)	(in millions, except share and per share data) (unaudited)	Shares Outstanding	Amount		Paid-In	Retained	Held in	Treasury			Total		(in millions, except share and per share data) (unaudited)	Shares Outstanding	Amount		Paid-In	Retained	Held in	Treasury			Total
					Capital	Earnings	Trust	Stock	AOCI(1)	NCI(2)	Equity						Capital	Earnings	Trust	Stock	AOCI(1)	NCI(2)	Equity
December 31, 2021		50,024,139	$	0.5	2,053.7	4,937.6	(5.2)	(406.3)	(395.4)	228.5	$	6,413.4
Net income (loss)		—	—		—	145.6	—	—	—	(1.7)	143.9
Shares issued under stock-based compensation programs		305,435	—		(3.6)	—	—	5.5	—	—	1.9
Shares repurchased for payment of taxes on stock-based compensation		(105,295)	—		(1.9)	—	—	(1.9)	—	—	(3.8)
Amortization of stock-based compensation		—	—		18.6	—	—	—	—	—	18.6

Shares held in trust		—	—		—	—	0.1	—	—	—	0.1

Repurchase of common stock		(615,351)	—		—	—	—	(150.0)	—	—	(150.0)

Foreign currency translation adjustments		—	—		—	—	—	—	(24.1)	—	(24.1)
Increase in amounts attributable to noncontrolling interest		—	—		—	—	—	—	—	15.2	15.2

March 31, 2022		49,608,928	$	0.5	2,066.8	5,083.2	(5.1)	(552.7)	(419.5)	242.0	$	6,415.2
Net income(3)		—	—		—	193.9	—	—	—	141.7	335.6
December 31, 2022													December 31, 2022	47,507,758	$	0.5	2,022.6	5,590.4	(9.8)	(934.6)	(648.2)	121.6	$	6,142.5
Net (loss) income													Net (loss) income	—	—		—	(9.2)	—	—	—	0.5	(8.7)
Shares issued under stock-based compensation programs	Shares issued under stock-based compensation programs	36,251	—		(25.4)	(1.7)	—	42.2	—	—	15.1		Shares issued under stock-based compensation programs	146,727	—		(60.3)	(14.5)	—	81.8	—	—	7.0
Shares repurchased for payment of taxes on stock-based compensation	Shares repurchased for payment of taxes on stock-based compensation	(6,592)	—		(16.5)	—	—	(16.5)	—	—	(33.0)		Shares repurchased for payment of taxes on stock-based compensation	(45,281)	—		2.3	—	—	(30.7)	—	—	(28.4)
Amortization of stock-based compensation	Amortization of stock-based compensation	—	—		25.8	—	—	—	—	—	25.8		Amortization of stock-based compensation	—	—		16.7	—	—	—	—	—	16.7

Repurchase of common stock		(1,397,915)	—		—	—	—	(297.7)	—	—	(297.7)

Foreign currency translation adjustments	Foreign currency translation adjustments	—	—		—	—	—	—	(164.4)	—	(164.4)		Foreign currency translation adjustments	—	—		—	—	—	—	26.8	—	26.8
Decrease in amounts attributable to noncontrolling interest	Decrease in amounts attributable to noncontrolling interest	—	—		—	—	—	—	—	(149.9)	(149.9)		Decrease in amounts attributable to noncontrolling interest	—	—		—	—	—	—	—	(0.7)	(0.7)

June 30, 2022		48,240,672	$	0.5	2,050.7	5,275.4	(5.1)	(824.7)	(583.9)	233.8	$	6,146.7
Net income (loss)(3)		—	—		—	140.2	—	—	—	(2.0)	138.2
March 31, 2023													March 31, 2023	47,609,204	$	0.5	1,981.3	5,566.7	(9.8)	(883.5)	(621.4)	121.4	$	6,155.2

Net income(3)													Net income(3)	—	—		—	2.5	—	—	—	0.6	3.1
Shares issued under stock-based compensation programs	Shares issued under stock-based compensation programs	209,110	—		(23.6)	—	—	40.6	—	—	17.0		Shares issued under stock-based compensation programs	288,834	—		(2.3)	(1.6)	—	7.1	—	—	3.2
Shares repurchased for payment of taxes on stock-based compensation	Shares repurchased for payment of taxes on stock-based compensation	(85,659)	—		(17.9)	—	—	(17.9)	—	—	(35.8)		Shares repurchased for payment of taxes on stock-based compensation	(104,766)	—		—	—	—	0.1	—	—	0.1
Amortization of stock-based compensation	Amortization of stock-based compensation	—	—		25.3	—	—	—	—	—	25.3		Amortization of stock-based compensation	—	—		36.3	—	—	—	—	—	36.3

Shares held in trust													Shares held in trust	—	—		—	—	(1.8)	—	—	—	(1.8)
Repurchase of common stock	Repurchase of common stock	(847,549)	—		—	—	—	(148.9)	—	—	(148.9)		Repurchase of common stock	(72,322)	—		—	—	—	(19.5)	—	—	(19.5)
Change in pension liabilities, net of tax													Change in pension liabilities, net of tax	—	—		—	—	—	—	(1.1)	—	(1.1)
Foreign currency translation adjustments	Foreign currency translation adjustments	—	—		—	—	—	—	(139.1)	—	(139.1)		Foreign currency translation adjustments	—	—		—	—	—	—	11.1	—	11.1
Decrease in amounts attributable to noncontrolling interest	Decrease in amounts attributable to noncontrolling interest	—	—		—	—	—	—	—	(1.2)	(1.2)		Decrease in amounts attributable to noncontrolling interest	—	—		—	—	—	—	—	(1.8)	(1.8)
September 30, 2022		47,516,574	$	0.5	2,034.5	5,415.6	(5.1)	(950.9)	(723.0)	230.6	$	6,002.2
June 30, 2023													June 30, 2023	47,720,950	$	0.5	2,015.3	5,567.6	(11.6)	(895.8)	(611.4)	120.2	$	6,184.8

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

(2) NCI: Noncontrolling interest

(3) Excludes net ~~loss~~income attributable to redeemable noncontrolling interest of $0.1 million for ~~both~~ the three months ended ~~September 30, 2022 and~~ June 30, ~~2022.~~2023.

Table of Contents

JONES LANG LASALLE INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (CONTINUED)

FOR THE THREE AND ~~NINE~~SIX MONTHS ENDED ~~SEPTEMBER~~JUNE 30, ~~2022~~2023 AND ~~2021~~
Company Shareholders' Equity
Common Stock Additional Shares
(in millions, except share and
per share data) (unaudited) Shares Outstanding Amount Paid-In Retained Held in Treasury Total
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
Net income (loss) — — — 200.0 — — — (0.6) 199.4
Shares issued under stock-based compensation programs 13,712 — (1.0) — — 1.5 — — 0.5
Shares repurchased for payment of taxes on stock-based compensation (2,184) — (0.2) — — (0.2) — — (0.4)
Amortization of stock-based compensation — — 26.3 — — — — — 26.3
Shares held in trust — — — — 0.1 — — — 0.1
Change in pension liabilities, net of tax — — — — — — 0.7 — 0.7
Repurchase of common stock (172,500) — — — — (37.9) — — (37.9)
Foreign currency translation adjustments — — — — — — (0.2) — (0.2)
Increase in amounts attributable to noncontrolling interest — — — — — — — 4.3 4.3
June 30, 2021 51,145,228 $ 0.5 2,040.6 4,278.9 (5.3) (122.3) (383.1) 90.4 $ 5,899.7
Net income (loss) — — — 237.2 — — — (0.5) 236.7
Shares issued under stock-based compensation programs 200,425 — (14.8) — — 25.5 — — 10.7
Shares repurchased for payment of taxes on stock-based compensation (82,956) — (16.1) — — (10.7) — — (26.8)
Amortization of stock-based compensation — — 24.0 — — — — — 24.0
Shares held in trust — — — — 0.1 — — — 0.1
Repurchase of common stock (680,500) — — — — (151.6) — — (151.6)
Foreign currency translation adjustments — — — — — — (47.2) — (47.2)
Increase in amounts attributable to noncontrolling interest — — — — — — — 6.5 6.5
September 30, 2021 50,582,197 $ 0.5 2,033.7 4,516.1 (5.2) (259.1) (430.3) 96.4 $ 5,952.1
2022


	Company Shareholders' Equity

	Common Stock			Additional		Shares
(in millions, except share and per share data) (unaudited)	Shares Outstanding	Amount		Paid-In	Retained	Held in	Treasury			Total
				Capital	Earnings	Trust	Stock	AOCI(1)	NCI(2)	Equity
December 31, 2021	50,024,139	$	0.5	2,053.7	4,937.6	(5.2)	(406.3)	(395.4)	228.5	$	6,413.4
Net income (loss)	—	—		—	145.6	—	—	—	(1.7)	143.9
Shares issued under stock-based compensation programs	305,435	—		(3.6)	—	—	5.5	—	—	1.9
Shares repurchased for payment of taxes on stock-based compensation	(105,295)	—		(1.9)	—	—	(1.9)	—	—	(3.8)
Amortization of stock-based compensation	—	—		18.6	—	—	—	—	—	18.6


Shares held in trust	—	—		—	—	0.1	—	—	—	0.1

Repurchase of common stock	(615,351)	—		—	—	—	(150.0)	—	—	(150.0)

Foreign currency translation adjustments	—	—		—	—	—	—	(24.1)	—	(24.1)
Increase in amounts attributable to noncontrolling interest	—	—		—	—	—	—	—	15.2	15.2

March 31, 2022	49,608,928	$	0.5	2,066.8	5,083.2	(5.1)	(552.7)	(419.5)	242.0	$	6,415.2












Net income(3)	—	—		—	193.9	—	—	—	141.7	335.6
Shares issued under stock-based compensation programs	36,251	—		(25.4)	(1.7)	—	42.2	—	—	15.1

Shares repurchased for payment of taxes on stock-based compensation	(6,592)	—		(16.5)	—	—	(16.5)	—	—	(33.0)
Amortization of stock-based compensation	—	—		25.8	—	—	—	—	—	25.8

Repurchase of common stock	(1,397,915)	—		—	—	—	(297.7)	—	—	(297.7)

Foreign currency translation adjustments	—	—		—	—	—	—	(164.4)	—	(164.4)
Decrease in amounts attributable to noncontrolling interest	—	—		—	—	—	—	—	(149.9)	(149.9)
June 30, 2022	48,240,672	$	0.5	2,050.7	5,275.4	(5.1)	(824.7)	(583.9)	233.8	$	6,146.7

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

(2) NCI: Noncontrolling interest

(3) Excludes net loss attributable to redeemable noncontrolling interest of $0.1 million for the three months ended June 30, 2022.

See accompanying notes to Condensed Consolidated Financial Statements.

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JONES LANG LASALLE INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended September 30,
(in millions) (unaudited) 2022 2021
Cash flows from operating activities:
Net income $ 617.5 538.5
Reconciliation of net income to net cash used in operating activities:
Depreciation and amortization 165.5 160.3
Equity earnings (72.6) (106.7)
Net gain on dispositions (134.8) (11.3)
Distributions of earnings from investments 14.9 14.6
Provision for loss on receivables and other assets 17.4 7.5
Amortization of stock-based compensation 69.7 67.8
Net non-cash mortgage servicing rights and mortgage banking derivative activity (12.8) (43.4)
Accretion of interest and amortization of debt issuance costs 3.7 3.2
Other, net 4.2 (17.0)
Change in:
Receivables (49.7) (80.4)
Reimbursable receivables and reimbursable payables (162.6) (38.3)
Prepaid expenses and other assets (74.6) (151.3)
Deferred tax assets, net 95.0 3.8
Accounts payable and accrued liabilities (390.7) (271.7)
Accrued compensation (492.0) 134.7
Net cash (used in) provided by operating activities (401.9) 210.3
Cash flows from investing activities:
Net capital additions – property and equipment (136.0) (111.6)
Net investment asset activity (less than wholly-owned) 132.4 (53.8)
Business acquisitions, net of cash acquired (5.7) (22.2)
Capital contributions to investments (142.3) (132.3)
Distributions of capital from investments 19.1 39.1
Other, net (15.3) (35.2)
Net cash used in investing activities (147.8) (316.0)
Cash flows from financing activities:
Proceeds from borrowings under credit facility 5,756.0 3,432.0
Repayments of borrowings under credit facility (4,306.0) (3,207.0)
Repayment of senior notes (275.0) —
Net proceeds from short-term borrowings 109.6 60.4
Payments of deferred business acquisition obligations and earn-outs (10.4) (58.3)
Repurchase of common stock (596.6) (189.5)
Noncontrolling interest (distributions) contributions, net (135.8) —
Other, net (41.3) 1.7
Net cash provided by financing activities 500.5 39.3
Effect of currency exchange rate changes on cash, cash equivalents and restricted cash (63.6) (17.3)
Net change in cash, cash equivalents and restricted cash (112.8) (83.7)
Cash, cash equivalents and restricted cash, beginning of the period 841.6 839.8
Cash, cash equivalents and restricted cash, end of the period $ 728.8 756.1
Supplemental disclosure of cash flow information:
Restricted cash, beginning of period $ 247.9 265.5
Restricted cash, end of period 239.4 220.2
Cash paid during the period for:
Interest $ 41.2 24.5
Income taxes, net of refunds 283.7 175.7
Operating leases 137.5 148.2
Non-cash activities:
Business acquisitions (including contingent consideration) $ 5.3 31.3
Non-cash consideration received for disposition 15.8 23.9
Deferred business acquisition obligations 3.1 —


	Six Months Ended June 30,
(in millions) (unaudited)	2023		2022
Cash flows from operating activities:
Net (loss) income	$	(5.5)	479.4
Reconciliation of net (loss) income to net cash used in operating activities:
Depreciation and amortization	117.4		109.8
Equity losses (earnings)	106.1		(72.1)
Net loss (gain) on dispositions	1.8		(134.8)
Distributions of earnings from investments	6.0		9.9
Provision for loss on receivables and other assets	19.0		11.8
Amortization of stock-based compensation	53.0		44.4
Net non-cash mortgage servicing rights and mortgage banking derivative activity	2.4		(7.6)
Accretion of interest and amortization of debt issuance costs	2.1		2.5
Other, net	3.6		2.6
Change in:
Receivables	137.7		64.6
Reimbursable receivables and reimbursable payables	(51.0)		(94.2)
Prepaid expenses and other assets	(46.5)		(21.3)
Deferred tax assets, net	(17.3)		78.8
Accounts payable and accrued liabilities	(216.5)		(339.6)
Accrued compensation	(591.6)		(673.6)
Net cash used in operating activities	(479.3)		(539.4)
Cash flows from investing activities:
Net capital additions – property and equipment	(88.2)		(86.9)
Net investment asset activity (less than wholly-owned)	—		137.0

Business acquisitions, net of cash acquired	(13.6)		(2.0)

Capital contributions to investments	(66.2)		(121.4)
Distributions of capital from investments	12.7		13.1
Other, net	(5.4)		(2.9)
Net cash used in investing activities	(160.7)		(63.1)
Cash flows from financing activities:

Proceeds from borrowings under credit facility	4,478.0		4,060.0
Repayments of borrowings under credit facility	(3,853.0)		(2,835.0)

Net repayments of short-term borrowings	(55.3)		(12.5)
Payments of deferred business acquisition obligations and earn-outs	(21.8)		(9.2)



Repurchase of common stock	(19.5)		(447.7)





Noncontrolling interest distributions, net	—		(134.6)
Other, net	(24.5)		(19.7)
Net cash provided by financing activities	503.9		601.3
Effect of currency exchange rate changes on cash, cash equivalents and restricted cash	3.8		(37.6)
Net change in cash, cash equivalents and restricted cash	(132.3)		(38.8)
Cash, cash equivalents and restricted cash, beginning of the period	746.0		841.6
Cash, cash equivalents and restricted cash, end of the period	$	613.7	802.8
Supplemental disclosure of cash flow information:
Restricted cash, beginning of period	$	226.7	247.9
Restricted cash, end of period	211.2		234.8
Cash paid during the period for:
Interest	$	65.1	26.4
Income taxes, net of refunds	103.1		201.6
Operating leases	96.2		91.5
Non-cash activities:
Business acquisitions (including contingent consideration)	$	—	2.0
Non-cash consideration received for disposition	—		15.8

Deferred business acquisition obligations	—		1.4

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

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, ~~2021,~~2022, which are included in our ~~2021~~2022 Annual Report on Form 10-K, filed with the United States Securities and Exchange Commission ("SEC") and also available on our website (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 Results of Operations and to Note 2, Summary of Significant Accounting Policies, in the Notes to Consolidated Financial Statements in our ~~2021~~2022 Annual Report on Form 10-K for further discussion of our significant accounting policies and estimates.

Our Condensed Consolidated Financial Statements as of ~~September~~June 30, ~~2022,~~2023, and for the periods ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, 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. We have also reclassified certain prior year amounts to conform to the current presentation, specifically the incorporation of directly reimbursed expenses within Compensation and benefits, and Operating, administrative and other on our Condensed Consolidated Statements of Comprehensive Income, compared with its historical separate presentation.

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. Growth in our Property Management and Workplace Management businesses as well as other annuity-based services has, to an extent, lessened the seasonality in our revenue and profits during the past several years. Within our Markets Advisory and Capital Markets segments, revenue from transaction-based activities is driven by the size and timing of our clients' transactions and can fluctuate significantly from period to period. 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.

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 required, we adjust for the impact of discrete items in the quarters in which they occur. Changes in the geographic mix of income can impact our estimated effective tax rate.

As a result of the items mentioned above, the results for the periods ended ~~September~~June 30 are not fully indicative of what our results will be for the full fiscal year.

~~Change in Reporting Segments~~

Effective January 1, 2022, we changed from our geographic-centric Real Estate Services segments of Americas, EMEA and Asia Pacific to global business line segments of Markets Advisory, Capital Markets, Work Dynamics and JLL Technologies. Our real estate investment management business, LaSalle, continues as a reporting segment. As our segment financial results are presented on this global business line view, the comparable period has been recast to align with the new reporting structure. Refer to Note 3, Revenue Recognition, and Note 4, Business Segments, for additional information, including detail financial information, on our segments.

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2.NEW ACCOUNTING STANDARDS

Recently adopted accounting guidance

In September 2022, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2022‑04, Liabilities-Supplier Finance Programs (Subtopic 450-50): Disclosure of Supplier Finance Program Obligations, which requires entities that use supplier finance programs in connection with the purchase of goods and services to disclose the key terms of the programs and information about their outstanding obligations at the end of the reporting period. The guidance is intended to address requests from stakeholders for information about an entity’s use of supplier finance programs and their effect on the entity’s working capital, liquidity and cash flows. ~~This ASU is~~We adopted this guidance effective ~~for annual~~January 1, 2023, and ~~interim periods beginning after December 15, 2022, with early~~the adoption ~~permitted. We do~~did not ~~expect the new guidance to have a material~~ impact to our financial statements and related disclosures.

3.REVENUE RECOGNITION

~~We earn revenue from the following services (segments are bolded).~~

•~~Markets Advisory~~

◦~~Leasing~~

◦~~Property Management~~

◦~~Advisory, Consulting and Other~~

•~~Capital Markets~~

◦~~Investment Sales, Debt/Equity Advisory and Other~~

◦~~Loan Servicing~~

◦~~Valuation Advisory~~

•~~Work Dynamics~~

◦~~Workplace Management~~

◦~~Project Management~~

◦~~Portfolio Services and Other~~

•~~JLL Technologies~~

•~~LaSalle~~

~~Markets Advisory~~

~~Leasing~~

Leasing revenue is earned from brokerage commissions as we represent tenants and/or landlords in connection with real estate leases. Our performance obligation is to facilitate the execution of a lease agreement, which is satisfied at a point in time, upon lease execution. Generally, we are either entitled to the full consideration upon lease execution or in part upon lease execution with the remainder upon the occurrence of a future event outside of our control (e.g., tenant occupancy, lease commencement, or rent commencement). The majority of the events that preclude our entitlement to the full consideration upon lease execution are considered to be “normal course of business” and, therefore, do not result in a constraint upon the recognition of revenue. In the infrequent instance our fee entitlement in a contract with a customer is predicated on the occurrence of a future event(s) uncertain of occurring, we constrain the recognition of revenue until the uncertainty is resolved or the future event occurs.

~~Property Management~~

Property Management provides on-site day-to-day real estate management services for owners of office, industrial, retail, multifamily residential and various other types of properties, representing a series of daily performance obligations delivered over time. Pricing is generally in the form of a monthly management fee based upon property-level cash receipts, square footage under management or some other variable metric.

Although we are principal in limited situations, we generally act as agent on behalf of our Property Management clients in relation to third-party vendors and subcontractors engaged to deliver operational services to our clients' properties. In these situations, we arrange, but do not control, the services provided by third party vendors and subcontractors prior to the transfer of the services to the client. As a result, the third-party costs incurred on behalf of clients, along with the corresponding revenue, are presented net on our Condensed Consolidated Statements of Comprehensive Income.

~~Table of Contents~~

~~Advisory, Consulting and Other~~

Advisory, Consulting and Other includes a variety of different service offerings, whereby our performance obligation is to provide services as specified in the contract. Occasionally, our entitlement to consideration is predicated on the occurrence of an event such as the delivery of a report for which client acceptance is required. However, except for event-driven point-in-time transactions, the majority of services provided within this service line are delivered over time due to the continuous transfer of control to our clients.

~~Capital Markets~~

~~Investment Sales, Debt/Equity Advisory and Other~~

We provide brokerage and other services for capital transactions, such as real estate sales or loan originations and refinancing. Our performance obligation is to facilitate the execution of capital transactions, and we are generally entitled to the full consideration at the point in time upon which our performance obligation is satisfied, at which time we recognize revenue. In addition, revenue related to mortgage servicing rights ("MSR" or "MSRs") and loan origination fees are reported within Investment Sales, Debt/Equity Advisory and Other.

~~Loan Servicing~~

We service substantially all the loans we originate and sell, and service loans we did not originate but subsequently acquire the rights to service. We obtain a periodic fee for each loan we service based on a proportion of the cash collections.

Capital Markets revenue excluded from the scope of Accounting Standards Codification Topic 606, Revenue from Contracts with Customers ("ASC Topic 606")

Our mortgage banking and servicing operations, comprised of (i) all Loan Servicing revenue and (ii) activities related to ~~MSRs~~mortgage servicing rights ("MSR" or "MSRs") and loan origination fees (included in Investment Sales, Debt/Equity Advisory and Other), are not considered revenue from contracts with customers, and accordingly are excluded from the scope of ASC Topic 606. Such out-of-scope revenue is presented below.


		Three Months Ended September 30,			Nine Months Ended September 30,				Three Months Ended June 30,			Six Months Ended June 30,
(in millions)	(in millions)	2022		2021	2022		2021	(in millions)	2023		2022	2023		2022
Revenue excluded from scope of ASC Topic 606	Revenue excluded from scope of ASC Topic 606	$	76.1	102.3	$	222.6	235.9	Revenue excluded from scope of ASC Topic 606	$	77.2	76.5	$	143.4	146.5

~~Valuation Advisory~~

Valuation Advisory service offerings include (but are not limited to) asset appraisal, business valuation, property tax advisory, complex litigation, and environmental property consulting. Our performance obligation is to provide services as specified in the contract and our pricing is negotiated based on the scale and complexity of each assignment. Typically, our entitlement to consideration is predicated on the occurrence of an event such as the delivery of an appraisal or report for which client acceptance is required.

~~Table of Contents~~

~~Work Dynamics~~

~~Workplace Management~~

Workplace Management, previously referred to as Integrated Facilities Management (IFM), provides comprehensive, on-site day-to-day real estate management services to corporations and institutions across a broad range of industries that outsource the management of the real estate they occupy, representing a series of daily performance obligations delivered over time. Pricing generally includes a management fee and, in many instances, an incentive fee or other form of variable consideration.

Although we may act as agent on behalf of our clients with respect to certain mandates, we generally act as principal for our Workplace Management contracts with respect to third-party vendors and subcontractors engaged to deliver operational services to our clients' facilities. In these situations, we control the services provided by such third-party vendors and subcontractors prior to the transfer of the services to the client. As a result, the third-party costs incurred on behalf of our clients, along with the corresponding reimbursement revenue, are presented gross on our Condensed Consolidated Statements of Comprehensive Income.

~~Project Management~~

Project Management, previously referred to as Project & Development Services, provides short-term construction-related services ranging from development and design to general contracting and project management for owners and occupiers of real estate. Depending on the terms of our engagement, our performance obligation is either to arrange for the completion of a project or to assume responsibility for completing a project on behalf of a client. Our obligations to clients are satisfied over time due to the continuous transfer of control of the underlying asset. Therefore, we recognize revenue over time, generally using input measures (e.g., to-date costs incurred relative to total estimated costs at completion).

Typically, we are entitled to consideration at distinct milestones over the term of an engagement. For certain contracts where we assume responsibility for completing a project, we control the services provided by third-party vendors and subcontractors prior to transfer of the assets to the client. In these situations, the third-party costs incurred on behalf of clients, along with the associated reimbursement revenue, are presented gross on our Condensed Consolidated Statements of Comprehensive Income. In contrast, where we act as agent on behalf of clients, third-party costs incurred and the associated revenue are presented net on our Condensed Consolidated Statements of Comprehensive Income.

~~Portfolio Services and Other~~

Portfolio Services and Other includes a variety of different service offerings, including advising clients on how to optimize their workplace strategies and occupancy planning efforts, and overall portfolio strategy management and administration for our clients. Our performance obligation is to provide services as specified in the contract. For event-driven point-in-time transactions, we record revenue when our performance obligation is complete, such as the delivery of a report where client acceptance is required, whereas revenue is recorded over time for services with a continuous transfer of control to our clients.

~~JLL Technologies~~

JLL Technologies offers multiple cloud-based software solutions that generate value for investors and businesses by enabling higher-quality decision-making through improved data and analytics. We recognize cloud-based software revenue over time commensurate with the length and terms of the contract. In addition, we offer professional services such as program and project management, implementation and support, managed services, and advisory services. We recognize professional services revenue at the time our performance obligation is satisfied.

~~LaSalle~~

LaSalle provides real estate investment management services to clients and generally earns consideration in the form of advisory fees, transaction fees and incentive fees. Typically, our performance obligation is to manage clients’ capital for a specified period of time and is delivered as a series of daily performance obligations over time. Revenue recognition for transaction and incentive fees is generally constrained until all contingencies have cleared due to the possibility of a significant reversal until completion of the events necessary to realize the associated consideration. Substantially all incentive fees recognized as revenue were previously constrained.

Contract assets and liabilities-

Our contract assets, net of allowance, are included in Short-term contract assets and Other assets and our contract liabilities are included in Short-term contract liabilities and deferred income on our Condensed

~~Table of Contents~~

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)	(in millions)	September 30, 2022		December 31, 2021	(in millions)	June 30, 2023		December 31, 2022
Contract assets, gross	Contract assets, gross	$	459.3	438.7	Contract assets, gross	$	427.8	447.0
Contract asset allowance	Contract asset allowance	(2.6)		(2.8)	Contract asset allowance	(2.2)		(2.3)
Contract assets, net	Contract assets, net	$	456.7	435.9	Contract assets, net	$	425.6	444.7

Contract liabilities	Contract liabilities	$	139.1	128.9	Contract liabilities	$	145.0	151.4

Remaining performance obligations -

Remaining performance obligations represent the aggregate transaction price for contracts where our performance obligations have not yet been satisfied. As of ~~September~~June 30, ~~2022,~~2023, 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~~A significant portion of our customer contracts, ~~with customers~~which are not expected to be ~~completed~~fulfilled within 12 ~~months.~~months, are represented by the contracts within these businesses.

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4. BUSINESS SEGMENTS

~~On February 28, 2022, we announced a new organizational structure that became effective on January 1, 2022. Under the new structure, we organize~~We manage and report our operations ~~around, and publicly report our financial results on,~~as five global business segments:

(1) Markets Advisory,

(2) Capital Markets,

(3) Work Dynamics,

(4) JLL Technologies, and

(5) LaSalle.

Markets Advisory offers a wide range of real estate services, including agency leasing and tenant representation, property management, advisory and consulting services. Capital Markets service offerings include investment sales, equity and debt advisory, loan servicing and valuation advisory. Our Work Dynamics business provides a broad suite of integrated services to occupiers of real estate, including facility and project management, as well as portfolio and other services. Our JLL Technologies segment offers software products, solutions and services, while LaSalle provides investment management services on a global basis to institutional investors and high-net-worth individuals.

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 functional costs across the globe, which we allocate to the business segments using an expense-specific driver-based methodology.

Adjusted EBITDA does not include (i) ~~depreciation and amortization, (ii) restructuring~~Restructuring and acquisition charges, (ii) gain/loss on disposal, (iii) interest ~~expense,~~on employee loans, net of ~~interest income,~~forgiveness, (iv) ~~provision for income tax, (v) gain on disposal and (vi)~~ net non-cash MSR and mortgage banking derivative activity, (v) Interest expense, net of interest income, (vi) Income tax (benefit) provision and (vii) Depreciation and amortization, which are otherwise included in Net income on the Condensed Consolidated Statements of Comprehensive Income.

The Chief Operating Decision Maker ("CODM") of JLL measures and evaluates the segment results based on Adjusted EBITDA for purposes of making decisions about allocating resources and assessing performance. Our CODM is not provided with total asset information by segment and accordingly does not measure or allocate resources based on total assets information. Therefore, we have not disclosed asset information by segment.

1210

Table of Contents

Summarized financial information by business segment is as follows.


		Three Months Ended September 30,			Nine Months Ended September 30,				Three Months Ended June 30,			Six Months Ended June 30,
(in millions)	(in millions)	2022		2021	2022		2021	(in millions)	2023		2022	2023		2022
Markets Advisory	Markets Advisory							Markets Advisory
Leasing	Leasing	$	703.3	694.9	$	2,012.6	1,683.9	Leasing	$	591.4	708.4	$	1,078.4	1,309.3
Property Management	Property Management	377.8		351.3	1,126.5		1,046.7	Property Management	409.9		378.2	810.1		748.7
Advisory, Consulting and Other	Advisory, Consulting and Other	30.4		33.7	90.1		93.3	Advisory, Consulting and Other	24.1		31.6	43.3		59.7

Revenue	Revenue	$	1,111.5	1,079.9	$	3,229.2	2,823.9	Revenue	$	1,025.4	1,118.2	$	1,931.8	2,117.7
Depreciation and amortization(a)		$	16.6	16.4	$	50.0	49.0

Depreciation and amortization(1)								Depreciation and amortization(1)	$	16.5	16.3	$	32.6	33.4
Equity (losses) earnings	Equity (losses) earnings	$	(0.2)	0.1	$	0.7	0.6	Equity (losses) earnings	$	(0.1)	0.4	$	0.2	0.9
Adjusted EBITDA	Adjusted EBITDA	$	132.1	149.2	$	377.3	329.1	Adjusted EBITDA	$	99.4	134.0	$	171.0	245.2

Capital Markets	Capital Markets							Capital Markets
Investment Sales, Debt/Equity Advisory and Other	Investment Sales, Debt/Equity Advisory and Other	$	465.0	554.7	$	1,490.8	1,286.8	Investment Sales, Debt/Equity Advisory and Other	$	319.5	549.7	$	560.1	1,025.8
Valuation Advisory	Valuation Advisory	89.7		87.1	268.7		258.2	Valuation Advisory	89.5		94.4	168.6		179.0
Loan Servicing	Loan Servicing	40.5		38.5	120.8		99.1	Loan Servicing	39.0		40.4	76.4		80.3

Revenue	Revenue	$	595.2	680.3	$	1,880.3	1,644.1	Revenue	$	448.0	684.5	$	805.1	1,285.1
Depreciation and amortization	Depreciation and amortization	$	15.2	15.1	$	46.2	47.7	Depreciation and amortization	$	16.2	15.4	$	32.1	31.0

Equity earnings	Equity earnings	$	0.7	1.3	$	2.1	3.1	Equity earnings	$	4.8	0.6	$	5.4	1.4
Adjusted EBITDA	Adjusted EBITDA	$	83.2	138.4	$	328.1	318.3	Adjusted EBITDA	$	36.0	126.7	$	46.7	244.9

Work Dynamics	Work Dynamics							Work Dynamics
Workplace Management	Workplace Management	$	2,429.1	2,138.4	$	7,183.5	6,294.0	Workplace Management	$	2,553.4	2,434.0	$	5,050.6	4,754.4
Project Management	Project Management	748.3		707.8	2,115.4		1,877.4	Project Management	703.2		754.8	1,379.5		1,367.1
Portfolio Services and Other	Portfolio Services and Other	112.4		114.2	335.0		323.3	Portfolio Services and Other	118.0		121.7	220.7		222.6

Revenue	Revenue	$	3,289.8	2,960.4	$	9,633.9	8,494.7	Revenue	$	3,374.6	3,310.5	$	6,650.8	6,344.1
Depreciation and amortization	Depreciation and amortization	$	17.6	16.9	$	51.1	49.9	Depreciation and amortization	$	19.9	17.0	$	39.2	33.5

Equity earnings	Equity earnings	$	0.1	0.3	$	1.3	0.1	Equity earnings	$	0.8	0.9	$	1.2	1.2
Adjusted EBITDA	Adjusted EBITDA	$	53.4	37.7	$	146.2	113.8	Adjusted EBITDA	$	56.2	57.6	$	81.9	92.8

JLL Technologies	JLL Technologies							JLL Technologies
Revenue	Revenue	$	56.5	38.8	$	156.6	121.8	Revenue	$	60.6	50.7	$	122.0	100.1
Depreciation and amortization	Depreciation and amortization	$	3.7	2.2	$	11.4	7.3	Depreciation and amortization	$	4.1	3.9	$	8.0	7.7
Equity earnings		$	1.0	7.3	$	64.5	58.1
Equity (losses) earnings								Equity (losses) earnings	$	(103.9)	44.7	$	(99.0)	63.5
Adjusted EBITDA	Adjusted EBITDA	$	(15.3)	(10.7)	$	(14.7)	1.8	Adjusted EBITDA	$	(105.2)	12.9	$	(118.5)	0.6

LaSalle	LaSalle							LaSalle
Advisory fees	Advisory fees	$	102.6	97.3	$	302.8	270.4	Advisory fees	$	103.1	103.2	$	203.6	200.2
Transaction fees and other	Transaction fees and other	10.0		10.2	37.4		28.9	Transaction fees and other	5.0		10.3	15.4		27.4
Incentive fees	Incentive fees	11.9		22.3	17.1		37.5	Incentive fees	35.8		1.0	39.3		5.2
Revenue	Revenue	$	124.5	129.8	$	357.3	336.8	Revenue	$	143.9	114.5	$	258.3	232.8
Depreciation and amortization	Depreciation and amortization	$	1.6	2.2	$	4.8	6.4	Depreciation and amortization	$	2.3	1.8	$	3.6	3.2

Equity (losses) earnings	Equity (losses) earnings	$	(1.1)	8.4	$	4.0	44.8	Equity (losses) earnings	$	(5.1)	7.0	$	(13.9)	5.1
Adjusted EBITDA	Adjusted EBITDA	$	22.8	37.4	$	71.9	111.5	Adjusted EBITDA	$	29.7	27.8	$	44.0	49.1

~~(a) This adjustment excludes~~(1) Excludes the noncontrolling interest portion of amortization of acquisition-related intangibles which is not attributable to common shareholders.

1311

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The following table is a reconciliation of Adjusted EBITDA to Net income (loss) attributable to common shareholders.


		Three Months Ended September 30,			Nine Months Ended September 30,				Three Months Ended June 30,			Six Months Ended June 30,
(in millions)	(in millions)	2022		2021	2022		2021	(in millions)	2023		2022	2023		2022
Adjusted EBITDA - Markets Advisory	Adjusted EBITDA - Markets Advisory	$	132.1	149.2	$	377.3	329.1	Adjusted EBITDA - Markets Advisory	$	99.4	134.0	$	171.0	245.2
Adjusted EBITDA - Capital Markets	Adjusted EBITDA - Capital Markets	83.2		138.4	328.1		318.3	Adjusted EBITDA - Capital Markets	36.0		126.7	46.7		244.9
Adjusted EBITDA - Work Dynamics	Adjusted EBITDA - Work Dynamics	53.4		37.7	146.2		113.8	Adjusted EBITDA - Work Dynamics	56.2		57.6	81.9		92.8
Adjusted EBITDA - JLL Technologies	Adjusted EBITDA - JLL Technologies	(15.3)		(10.7)	(14.7)		1.8	Adjusted EBITDA - JLL Technologies	(105.2)		12.9	(118.5)		0.6
Adjusted EBITDA - LaSalle	Adjusted EBITDA - LaSalle	22.8		37.4	71.9		111.5	Adjusted EBITDA - LaSalle	29.7		27.8	44.0		49.1
Adjusted EBITDA - Consolidated	Adjusted EBITDA - Consolidated	$	276.2	352.0	$	908.8	874.5	Adjusted EBITDA - Consolidated	$	116.1	359.0	$	225.1	632.6
Adjustments:	Adjustments:							Adjustments:
Restructuring and acquisition charges	Restructuring and acquisition charges	$	(21.0)	(15.6)	$	(66.4)	(50.9)	Restructuring and acquisition charges	$	(11.8)	(25.9)	$	(47.5)	(45.4)
Net gain (loss) on disposition		—		0.4	(7.5)		12.4
Net loss on disposition								Net loss on disposition	(1.8)		(7.5)	(1.8)		(7.5)
Interest on employee loans, net of forgiveness								Interest on employee loans, net of forgiveness	0.9		—	0.7		—
Net non-cash MSR and mortgage banking derivative activity	Net non-cash MSR and mortgage banking derivative activity	5.2		28.1	12.8		43.5	Net non-cash MSR and mortgage banking derivative activity	(0.6)		11.2	(2.4)		7.6
Interest expense, net of interest income	Interest expense, net of interest income	(23.2)		(9.6)	(49.1)		(30.6)	Interest expense, net of interest income	(40.5)		(15.7)	(66.8)		(25.9)
Provision for income taxes		(42.3)		(65.3)	(155.4)		(148.4)
Depreciation and amortization(a)		(54.7)		(52.8)	(163.5)		(160.3)
Net income attributable to common shareholders		$	140.2	237.2	$	479.7	540.2
Income tax (provision) benefit								Income tax (provision) benefit	(0.8)		(72.8)	1.5		(113.1)
Depreciation and amortization(1)								Depreciation and amortization(1)	(59.0)		(54.4)	(115.5)		(108.8)
Net income (loss) attributable to common shareholders								Net income (loss) attributable to common shareholders	$	2.5	193.9	$	(6.7)	339.5

~~(a)~~(1) This adjustment excludes the noncontrolling interest portion of amortization of acquisition-related intangibles which is not attributable to common shareholders.

5.BUSINESS COMBINATIONS, GOODWILL AND OTHER INTANGIBLE ASSETS

~~2022~~2023 Business Combinations Activity

During the ~~nine~~six months ended ~~September~~June 30, ~~2022, there were no material acquisitions. We~~2023, we completed one strategic acquisition. This strategic acquisition is presented below.


Acquired Company	Quarter of Acquisition	Country	Primary Segment

Kensington Capital Advisors (KCA)	Q2	United States	Capital Markets

Aggregate terms of our acquisition included: (1) cash paid ~~$15.9~~at closing of $13.6 million and (2) prior 50.0% ownership previously accounted for as an equity method investment which had a fair value of $10.0 million.

A preliminary allocation of purchase consideration resulted in goodwill of $18.7 million, identifiable intangibles of $2.1 million and other net assets (acquired assets less assumed liabilities) of $2.8 million. As of June 30, 2023, we have not completed our analysis to assign fair values to all of the identifiable intangible and tangible assets acquired and, therefore, we may further refine the purchase price allocations for this acquisition during the open measurement period.

During the six months ended June 30, 2023, we paid $22.0 million for deferred business acquisition and earn-out obligations for acquisitions completed in prior years.

~~2021~~2022 Business Combinations Activity

During the ~~nine~~six months ended ~~September~~June 30, 2022, we ~~made~~completed no ~~adjustments to our preliminary allocation~~strategic acquisitions.

Table of the purchase consideration for certain acquisitions completed in 2021. As of September 30, 2022, we have completed our analysis to assign fair values to all the identifiable intangible and tangible assets acquired as of September 30, 2021.Contents

Earn-Out Payments


($ in millions)	($ in millions)	September 30, 2022		December 31, 2021	($ in millions)	June 30, 2023		December 31, 2022
Number of acquisitions with earn-out payments subject to the achievement of certain performance criteria	Number of acquisitions with earn-out payments subject to the achievement of certain performance criteria	18		19	Number of acquisitions with earn-out payments subject to the achievement of certain performance criteria	16		17
Maximum earn-out payments (undiscounted)	Maximum earn-out payments (undiscounted)	$	136.6	149.9	Maximum earn-out payments (undiscounted)	$	105.0	114.6
Short-term earn-out liabilities (fair value)(1)	Short-term earn-out liabilities (fair value)(1)	27.4		39.0	Short-term earn-out liabilities (fair value)(1)	12.4		5.0
Long-term earn-out liabilities (fair value)(1)	Long-term earn-out liabilities (fair value)(1)	49.2		45.1	Long-term earn-out liabilities (fair value)(1)	51.9		68.3

(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.

~~Table of Contents~~

Goodwill and Other Intangible Assets

In conjunction with our new organizational structure described more fully in Note 4, Business Segments, we reassessed our reporting units as of January 1, 2022, and reassigned goodwill to reflect our new segment structure using a relative fair value allocation approach. Under this methodology, the fair value of each impacted reporting unit was determined using a combination of the income approach and the market approach, and this resulting relative fair value was used to reassign the balance of goodwill.

We considered the change to our reportable segments a triggering event requiring the testing of our goodwill for impairment as of January 1, 2022. We performed a quantitative test relying on the discounted cash flow (“DCF”) method, an income approach, in determining the estimated fair value of our reporting units. Our DCF analysis relied on significant judgements and assumptions in determining the inputs, specifically, forecasted revenue growth, forecasted profitability margin, and the discount rate used to present value the estimated future cash flows. Our analysis indicated that no impairment existed as the estimated fair value of each of our reporting units exceeded its respective carrying value.

Goodwill and unamortized intangibles as of ~~September~~June 30, ~~2022~~2023 consisted of: (1) goodwill of ~~$4,454.8~~$4,577.7 million, (2) identifiable intangibles of ~~$816.7~~$772.1 million amortized over their remaining finite useful lives and (3) ~~$44.9~~$49.0 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.

The following table details, by reporting segment, movements in goodwill.


(in millions)	(in millions)	Markets Advisory		Capital Markets	Work Dynamics	JLL Technologies	LaSalle	Consolidated		(in millions)	Markets Advisory		Capital Markets	Work Dynamics	JLL Technologies	LaSalle	Consolidated
Balance as of January 1, 2022		$	1,782.9	1,983.9	539.9	247.5	57.4	$	4,611.6
Balance as of December 31, 2022										Balance as of December 31, 2022	$	1,742.9	1,949.2	532.6	247.7	55.6	$	4,528.0
Additions, net of adjustments	Additions, net of adjustments	—		8.5	4.6	0.4	—	13.5		Additions, net of adjustments	—		18.7	—	—	—	18.7

Impact of exchange rate movements	Impact of exchange rate movements	(69.8)		(76.4)	(20.8)	(0.2)	(3.1)	(170.3)		Impact of exchange rate movements	12.5		14.1	3.8	—	0.6	31.0
Balance as of September 30, 2022		$	1,713.1	1,916.0	523.7	247.7	54.3	$	4,454.8
Balance as of June 30, 2023										Balance as of June 30, 2023	$	1,755.4	1,982.0	536.4	247.7	56.2	$	4,577.7

~~(in millions)~~


(in millions)	Markets Advisory		Capital Markets	Work Dynamics	JLL Technologies	LaSalle	Consolidated
Balance as of January 1, 2022	$	1,782.9	1,983.9	539.9	247.5	57.4	$	4,611.6
Additions, net of adjustments	—		0.8	4.6	0.4	—	5.8

Impact of exchange rate movements	(40.2)		(43.5)	(11.8)	(0.2)	(1.8)	(97.5)
Balance as of June 30, 2022	$	1,742.7	1,941.2	532.7	247.7	55.6	$	4,519.9

Table of Contents

The following tables detail, by intangible type, movements in the gross carrying amount and accumulated amortization of our identifiable intangibles.


(in millions)	(in millions)	MSRs		Other Intangibles	Consolidated		(in millions)	MSRs		Other Intangibles	Consolidated
Gross Carrying Amount	Gross Carrying Amount						Gross Carrying Amount
Balance as of December 31, 2021		$	669.7	557.4	$	1,227.1
Balance as of December 31, 2022							Balance as of December 31, 2022	$	747.3	557.0	$	1,304.3
Additions, net of adjustments(1)	Additions, net of adjustments(1)	103.3		19.1	122.4		Additions, net of adjustments(1)	45.5		5.8	51.3
Adjustment for fully amortized intangibles	Adjustment for fully amortized intangibles	(47.9)		(2.7)	(50.6)		Adjustment for fully amortized intangibles	(20.2)		(17.4)	(37.6)

Impact of exchange rate movements	Impact of exchange rate movements	—		(13.7)	(13.7)		Impact of exchange rate movements	—		2.1	2.1
Balance as of September 30, 2022		$	725.1	560.1	$	1,285.2
Balance as of June 30, 2023							Balance as of June 30, 2023	$	772.6	547.5	$	1,320.1

Accumulated Amortization	Accumulated Amortization						Accumulated Amortization
Balance as of December 31, 2021		$	(191.0)	(149.1)	$	(340.1)
Balance as of December 31, 2022							Balance as of December 31, 2022	$	(242.2)	(203.6)	$	(445.8)
Amortization, net(2)	Amortization, net(2)	(86.7)		(51.5)	(138.2)		Amortization, net(2)	(54.5)		(35.6)	(90.1)
Adjustment for fully amortized intangibles	Adjustment for fully amortized intangibles	47.9		2.7	50.6		Adjustment for fully amortized intangibles	20.2		17.4	37.6

Impact of exchange rate movements	Impact of exchange rate movements	—		4.1	4.1		Impact of exchange rate movements	—		(0.7)	(0.7)
Balance as of September 30, 2022		$	(229.8)	(193.8)	$	(423.6)
Balance as of June 30, 2023							Balance as of June 30, 2023	$	(276.5)	(222.5)	$	(499.0)

Net book value as of September 30, 2022		$	495.3	366.3	$	861.6
Net book value as of June 30, 2023							Net book value as of June 30, 2023	$	496.1	325.0	$	821.1

(1) Included in this amount for MSRs was ~~$22.5~~$6.8 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 within the Condensed Consolidated Statements of Comprehensive Income.



(in millions)	MSRs		Other Intangibles	Total
Gross Carrying Amount
Balance as of December 31, 2021	$	669.7	557.4	$	1,227.1
Additions, net of adjustments(1)	78.1		4.9	83.0
Adjustment for fully amortized intangibles	(33.8)		(2.5)	(36.3)

Impact of exchange rate movements	—		(7.7)	(7.7)
Balance as of June 30, 2022	$	714.0	552.1	$	1,266.1

Accumulated Amortization
Balance as of December 31, 2021	$	(191.0)	(149.1)	$	(340.1)
Amortization, net(2)	(58.8)		(33.7)	(92.5)
Adjustment for fully amortized intangibles	33.8		2.5	36.3

Impact of exchange rate movements	—		2.1	2.1
Balance as of June 30, 2022	$	(216.0)	(178.2)	$	(394.2)

Net book value as of June 30, 2022	$	498.0	373.9	$	871.9

(1) Included in this amount for MSRs was $16.7 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 within the Condensed Consolidated Statements of Comprehensive Income.

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Table of Contents

(in millions) MSRs Other Intangibles Total
Gross Carrying Amount
Balance as of December 31, 2020 $ 572.1 403.0 $ 975.1
Additions, net of adjustments(1)
95.5 19.5 115.0
Adjustment for fully amortized intangibles (36.2) (46.0) (82.2)
Impact of exchange rate movements — (4.3) (4.3)
Balance as of September 30, 2021 $ 631.4 372.2 $ 1,003.6
Accumulated Amortization
Balance as of December 31, 2020 $ (147.8) (147.5) $ (295.3)
Amortization, net(2)
(71.9) (38.7) (110.6)
Adjustment for fully amortized intangibles 36.2 46.0 82.2
Impact of exchange rate movements — 0.7 0.7
Balance as of September 30, 2021 $ (183.5) (139.5) $ (323.0)
Net book value as of September 30, 2021 $ 447.9 232.7 $ 680.6

(1) Included in this amount for MSRs was $15.4 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 within the Condensed Consolidated Statements of Comprehensive Income.~~

6.INVESTMENTS

Summarized investment balances as of ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021~~2022 are presented in the following table.


(in millions)	(in millions)	September 30, 2022		December 31, 2021	(in millions)	June 30, 2023		December 31, 2022
JLL Technologies investments	JLL Technologies investments	$	503.9	353.6	JLL Technologies investments	$	469.1	483.4
LaSalle co-investments	LaSalle co-investments	353.6		354.6	LaSalle co-investments	376.1		366.5
Other investments	Other investments	33.4		37.5	Other investments	27.5		23.9
Total	Total	$	890.9	745.7	Total	$	872.7	873.8

~~Approximately 90% of our investments, as of September 30, 2022, are (i) investments by~~Our JLL Technologies investments are, generally, investments in early to mid-stage proptech companies as well as proptech funds, ~~or (ii)~~while our LaSalle co-investments are, primarily, direct investments in 5549 separate property or commingled funds, where we co-invest alongside our clients and for which we also have an advisory agreement. The remaining 10% of our investments, as of September 30, 2022, were attributable to investment vehicles that use our capital and outside capital primarily provided by institutional investors to invest, 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 ~~$352.5~~$324.1 million and $14.9 million as of ~~September~~June 30, ~~2022.~~2023 for our LaSalle Investment Management business and JLL Technologies, respectively. Of ~~this amount,~~the $324.1 million related to LaSalle, while we remain contractually obligated, we do not expect a call on the $60.3 million relating to ~~our~~a specific investment ~~in LIC II as~~since the underlying fund moved into its ~~fund life terminated~~liquidation phase 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~~In prior periods, we determined ~~that~~ we ~~are~~were the primary beneficiary of certain VIEs and, accordingly, we ~~have~~ consolidated such entities. ~~The assets~~In December of 2022, as a result of a reconsideration event, we concluded we were no longer the ~~consolidated~~primary beneficiary of these 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.~~therefore, no longer consolidate these VIEs.

~~Table of Contents~~

Summarized financial information for our consolidated VIEs is presented in the following ~~tables.~~
(in millions) September 30, 2022 December 31, 2021
Property and equipment, net $ 190.7 184.7
Investments 10.7 10.2
Other assets 22.0 17.7
Total assets $ 223.4 212.6
Other current liabilities $ 2.7 2.1
Mortgage indebtedness (included in Other liabilities) 113.6 107.5
Total liabilities 116.3 109.6
Members' equity (included in Noncontrolling interest) 107.1 103.0
Total liabilities and members' equity $ 223.4 212.6
table. As a result of the reconsideration event described above, there were no consolidated VIE balances as of June 30, 2023 and December 31, 2022; net income was consolidated up to the reconsideration date.


		Three Months Ended September 30,			Nine Months Ended September 30,				Three Months Ended June 30,			Six Months Ended June 30,
(in millions)	(in millions)	2022		2021	2022		2021	(in millions)	2023		2022	2023		2022
Revenue	Revenue	$	4.6	3.4	$	13.2	8.9	Revenue	$	—	5.1	$	—	8.6
Operating and other expenses	Operating and other expenses	(6.2)		(4.3)	(17.9)		(11.0)	Operating and other expenses	—		(6.0)	—		(11.7)
Net gains on sale of investments(1)	Net gains on sale of investments(1)	—		—	142.3		—	Net gains on sale of investments(1)	—		142.3	—		142.3
Net (loss) income		$	(1.6)	(0.9)	$	137.6	(2.1)
Net income								Net income	$	—	141.4	$	—	139.2

(1) The gain was included in Other (expense) income ~~(expense)~~ on the Condensed Consolidated Statements of Comprehensive Income.

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

Impairment

There were no significant other-than-temporary impairment charges on investments for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021.~~2022.

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Fair Value

We report a majority of our investments 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 reported at fair value.


(in millions)	(in millions)	2022		2021	(in millions)	2023		2022
Fair value investments as of January 1,	Fair value investments as of January 1,	$	639.6	340.3	Fair value investments as of January 1,	$	794.9	639.6
Investments(1)	Investments(1)	140.3		148.9	Investments(1)	123.8		121.8
Distributions	Distributions	(29.9)		(46.6)	Distributions	(11.1)		(21.4)
Change in fair value, net	Change in fair value, net	65.2		100.8	Change in fair value, net	(110.5)		65.3
Foreign currency translation adjustments, net	Foreign currency translation adjustments, net	(28.5)		(5.7)	Foreign currency translation adjustments, net	5.4		(19.2)
Fair value investments as of September 30,		$	786.7	537.7
Fair value investments as of June 30,					Fair value investments as of June 30,	$	802.5	786.1

(1) In the second quarter of 2023, $63.8 million in Notes receivable matured and (inclusive of accrued interest) converted to equity.

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

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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)		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 June 30, 2022		939.0	576.9	1,515.9	$	167.23	1.98
Unvested as of March 31, 2023								Unvested as of March 31, 2023	688.4	316.4	1,004.8	$	192.36	1.66
Granted	Granted	59.9	1.6	61.5	172.22			Granted	345.2	151.8	497.0	137.67
Vested	Vested	(203.7)	—	(203.7)	141.15			Vested	(15.1)	—	(15.1)	131.67
Forfeited	Forfeited	(10.2)	(10.6)	(20.8)	158.85			Forfeited	(15.1)	(4.6)	(19.7)	186.15
Unvested as of September 30, 2022		785.0	567.9	1,352.9	$	171.51	1.85
Unvested as of June 30, 2023								Unvested as of June 30, 2023	1,003.4	463.6	1,467.0	$	174.54	1.85

Unvested as of June 30, 2021		1,118.1	545.2	1,663.3	$	144.01	1.92
Unvested as of March 31, 2022								Unvested as of March 31, 2022	786.8	466.1	1,252.9	$	152.62	1.84
Granted	Granted	23.7	58.8	82.5	205.50			Granted	188.5	113.0	301.5	224.59
Vested	Vested	(199.6)	—	(199.6)	141.21			Vested	(28.6)	—	(28.6)	129.96
Forfeited	Forfeited	(6.9)	(9.4)	(16.3)	145.07			Forfeited	(7.7)	(2.2)	(9.9)	173.02
Unvested as of September 30, 2021		935.3	594.6	1,529.9	$	147.75	1.96
Unvested as of June 30, 2022								Unvested as of June 30, 2022	939.0	576.9	1,515.9	$	167.23	1.98


									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, 2022								Unvested as of December 31, 2022	841.3	567.0	1,408.3	$	170.78	1.79
Granted								Granted	345.2	182.8	528.0	136.13
Vested								Vested	(160.7)	(257.2)	(417.9)	116.49
Forfeited								Forfeited	(22.4)	(29.0)	(51.4)	148.89
Unvested as of June 30, 2023								Unvested as of June 30, 2023	1,003.4	463.6	1,467.0	$	174.54	1.85
		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, 2021	Unvested as of December 31, 2021	912.4	646.0	1,558.4	$	152.27	1.99	Unvested as of December 31, 2021	912.4	646.0	1,558.4	$	152.27	1.99
Granted	Granted	248.4	114.6	363.0	214.90			Granted	188.5	113.0	301.5	223.61
Vested	Vested	(355.1)	(175.1)	(530.2)	145.10			Vested	(151.4)	(175.1)	(326.5)	147.57
Forfeited	Forfeited	(20.7)	(17.6)	(38.3)	165.51			Forfeited	(10.5)	(7.0)	(17.5)	173.44
Unvested as of September 30, 2022		785.0	567.9	1,352.9	$	171.51	1.85

Unvested as of December 31, 2020		1,096.2	531.5	1,627.7	$	137.42	1.69
Granted		280.8	166.0	446.8	184.71
Vested		(417.8)	(79.0)	(496.8)	146.76
Forfeited		(23.9)	(23.9)	(47.8)	140.66
Unvested as of September 30, 2021		935.3	594.6	1,529.9	$	147.75	1.96
Unvested as of June 30, 2022								Unvested as of June 30, 2022	939.0	576.9	1,515.9	$	167.23	1.98

As of ~~September~~June 30, ~~2022,~~2023, we had ~~$99.9~~$104.5 million of unamortized deferred compensation related to unvested RSUs and PSUs, which we anticipate recognizing over varying periods into ~~2026.~~2027.

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8.FAIR VALUE MEASUREMENTS

We measure certain assets and liabilities in accordance with ASC Topic 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.

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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 ~~including its current portion, as $325.1 million and $687.2 million as of September 30, 2022 and December 31, 2021, respectively,~~ using dealer quotes that are Level 2 inputs in the fair value hierarchy. The fair value and carrying value of our debt are presented in the short-term portion of our Long-term debt as of December 31, 2021 was $274.7 million, net of $0.3 million of debt issuance costs. We retired this debt during September 2022. The carrying value of the long-term portion was $341.5 million and $395.6 million, as of September 30, 2022 and December 31, 2021, respectively, which included debt issuance costs of $1.3 million and $1.4 million as of September 30, 2022 and December 31, 2021, respectively. See Note 9, Debt, for additional discussion of the redemption of our Long-term debt.following table.


(in millions)	June 30, 2023		December 31, 2022
Long-term debt, fair value	$	363.3	360.9
Long-term debt, carrying value, net of debt issuance costs	380.7		372.8

Investments at Fair Value - Net Asset Value ("NAV")

We report a significant portion of our investments 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 a subset of our investments reported at fair value, we estimate the fair value using the NAV per share (or its equivalent) our investees provide. Critical inputs to NAV estimates included valuations of the underlying real estate assets and borrowings, which incorporate investment-specific assumptions such as discount rates, capitalization rates, rental and expense growth rates, and asset-specific market borrowing rates. We did not consider any 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 ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, investments at fair value using NAV were ~~$279.5~~$314.1 million and ~~$251.6~~$284.6 million, respectively. As these investments are not required to be classified in the fair value hierarchy, they have been excluded from the following table.

1918

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Recurring Fair Value Measurements

During the second quarter of 2022, certain investments previously reported as NAV investments were reclassified as Level 3 within the fair value hierarchy. Prior period amounts within the fair value table below have been reclassified to reflect the current period presentation. 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.


		September 30, 2022				December 31, 2021				June 30, 2023				December 31, 2022
(in millions)	(in millions)	Level 1		Level 2	Level 3	Level 1	Level 2	Level 3	(in millions)	Level 1		Level 2	Level 3	Level 1	Level 2	Level 3
Assets	Assets								Assets
Investments - fair value	Investments - fair value	$	53.7	—	453.5	84.5	—	303.5	Investments - fair value	$	50.3	—	438.1	58.3	—	452.0
Foreign currency forward contracts receivable	Foreign currency forward contracts receivable	—		14.1	—	—	15.9	—	Foreign currency forward contracts receivable	—		4.2	—	—	3.7	—
Warehouse receivables	Warehouse receivables	—		671.9	—	—	822.3	—	Warehouse receivables	—		1,049.0	—	—	463.2	—
Deferred compensation plan assets	Deferred compensation plan assets	—		520.2	—	—	528.8	—	Deferred compensation plan assets	—		559.5	—	—	517.9	—
Mortgage banking derivative assets	Mortgage banking derivative assets	—		—	239.1	—	—	60.4	Mortgage banking derivative assets	—		—	198.7	—	—	190.2
Total assets at fair value	Total assets at fair value	$	53.7	1,206.2	692.6	84.5	1,367.0	363.9	Total assets at fair value	$	50.3	1,612.7	636.8	58.3	984.8	642.2
Liabilities	Liabilities								Liabilities
Foreign currency forward contracts payable	Foreign currency forward contracts payable	$	—	34.7	—	—	0.8	—	Foreign currency forward contracts payable	$	—	9.2	—	—	4.8	—
Deferred compensation plan liabilities	Deferred compensation plan liabilities	—		477.2	—	—	513.0	—	Deferred compensation plan liabilities	—		517.1	—	—	485.4	—
Earn-out liabilities	Earn-out liabilities	—		—	76.6	—	—	84.1	Earn-out liabilities	—		—	64.3	—	—	73.2
Mortgage banking derivative liabilities	Mortgage banking derivative liabilities	—		—	178.8	—	—	38.5	Mortgage banking derivative liabilities	—		—	139.6	—	—	169.5
Total liabilities at fair value	Total liabilities at fair value	$	—	511.9	255.4	—	513.8	122.6	Total liabilities at fair value	$	—	526.3	203.9	—	490.2	242.7

Investments

We classify one investment as Level 1 in the fair value hierarchy as a quoted price ~~are~~is readily available. We increase or decrease our investment each reporting period by the change in the fair value of the investment. We report the 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~~early to mid-stage non-public entities where we elected the fair value option. ~~The~~To the extent there are changes in fair value, we recognize such changes through Equity earnings/losses. Such changes are generally the result of pricing in subsequent funding rounds, changes in business strategy or performance updates from the investee, several of which occurred in the second quarter of 2023. For most of our investments, the carrying value was deemed to approximate 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.~~

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 September 30, 2022 and December 31, 2021, these contracts had a~~The following table details the gross notional value and net basis of ~~$1.73 billion ($1.10 billion on a net basis) and $2.61 billion ($1.51 billion on a net basis), respectively.~~these contracts.


(in billions)	June 30, 2023		December 31, 2022
Foreign currency forward contracts, gross notional value	$	1.76	1.81
Foreign currency forward contracts, net basis	1.08		1.02

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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 ~~$14.1 million asset as~~outstanding balances of ~~September 30, 2022 was composed of gross~~these contracts with receivable positions of $16.9 million and payable positions of $2.8 million. The $34.7 million liability as of September 30, 2022 was composed of gross contracts with receivable positions of $0.2 million and payable positions of $34.9 million. As of December 31, 2021,are presented in the $15.9 million asset was composed of gross contracts with receivable positions of $19.2 million and payable positions of $3.3 million. The $0.8 million liability as of December 31, 2021 was composed of gross contracts with receivable positions of $0.2 million and payable positions of $1.0 million.following table.

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(in millions)	June 30, 2023		December 31, 2022
Net asset, receivable positions	$	5.4	7.7
Net asset, payable positions	(1.2)		(4.0)
Foreign currency forward contracts receivable	$	4.2	3.7

Net liability, receivable positions	$	(1.7)	(1.6)
Net liability, payable positions	10.9		6.4
Foreign currency forward contracts payable	$	9.2	4.8

Warehouse Receivables

As of ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, 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 September 30, 2022 as~~ Deferred compensation plan assets, ~~of $520.2 million,~~ long-term deferred compensation plan liabilities, ~~of $477.2 million,~~ included in Deferred compensation, and as a reduction of equity, Shares held in ~~trust,~~trust. The components of ~~$5.1 million. We recorded this~~the plan ~~on our Condensed Consolidated Balance Sheet as of December 31, 2021 as Deferred compensation plan assets of $528.8 million, long-term deferred compensation plan liabilities of $513.0 million, included~~are presented in ~~Deferred compensation, and as a reduction of equity, Shares held in trust, of $5.2 million.~~the following table.


(in millions)	June 30, 2023		December 31, 2022
Deferred compensation plan assets	$	559.5	517.9
Long-term deferred compensation plan liabilities	517.1		485.4
Shares held in trust	11.6		9.8

Earn-Out Liabilities

We classify our ~~earn-out~~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~~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.

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The tables below present a reconciliation for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3).


(in millions)	Balance as of March 31, 2023		Net change in fair value	Foreign CTA(1)	Purchases / Additions	Settlements	Transfers In(2)	Balance as of June 30, 2023
Investments	$	466.5	(103.9)	0.7	11.0	—	63.8	$	438.1
Mortgage banking derivative assets and liabilities, net	12.8		43.9	—	37.4	(35.0)	—	59.1
Earn-out liabilities	73.1		(0.6)	—	—	(8.2)	—	64.3


(in millions)	Balance as of March 31, 2022		Net change in fair value	Foreign CTA(1)	Purchases / Additions	Settlements	Balance as of June 30, 2022
Investments	$	344.2	45.3	—	71.1	(0.2)	$	460.4
Mortgage banking derivative assets and liabilities, net	37.1		2.2	—	48.4	(66.1)	21.6
Earn-out liabilities	79.5		1.0	(0.3)	—	(5.3)	74.9


(in millions)	Balance as of December 31, 2022		Net change in fair value	Foreign CTA(1)	Purchases / Additions	Settlements	Transfers In(2)	Balance as of June 30, 2023
Investments	$	452.0	(99.0)	1.2	20.1	—	63.8	$	438.1
Mortgage banking derivative assets and liabilities, net	20.7		38.9	—	68.5	(69.0)	—	59.1
Earn-out liabilities	73.2		(0.6)	0.2	—	(8.5)	—	64.3


(in millions)	Balance as of December 31, 2021		Net change in fair value	Foreign CTA(1)	Purchases / Additions	Settlements	Balance as of June 30, 2022
Investments	$	303.5	62.5	—	94.6	(0.2)	$	460.4
Mortgage banking derivative assets and liabilities, net	21.9		22.6	—	86.0	(108.9)	21.6
Earn-out liabilities	84.1		0.3	(0.4)	2.0	(11.1)	74.9

Balance as of June 30, 2022 Net change in fair value
Foreign CTA(1)
Purchases / Additions Settlements Transfers out Balance as of
September 30, 2022
Investments $ 460.4 2.5 — 1.8 — (11.2) $ 453.5
Mortgage banking derivative assets and liabilities, net 21.6 34.1 — 33.6 (29.0) — 60.3
Earn-out liabilities 74.9 (0.1) (0.3) 3.3 (1.2) — 76.6
Balance as of June 30, 2021 Net change in fair value
Foreign CTA(1)
Purchases / Additions Settlements Transfers out Balance as of September 30, 2021
Investments $ 181.6 6.1 0.3 19.7 — — $ 207.7
Mortgage banking derivative assets and liabilities, net 12.6 7.3 — 57.8 (44.0) — 33.7
Earn-out liabilities 18.0 — 0.3 27.5 (0.4) — 45.4

(in millions) Balance as of December 31, 2021 Net change in fair value
Foreign CTA(1)
Purchases / Additions Settlements Transfers out Balance as of
September 30, 2022
Investments $ 303.5 65.0 — 96.2 — (11.2) $ 453.5
Mortgage banking derivative assets and liabilities, net 21.9 56.7 — 119.6 (137.9) — 60.3
Earn-out liabilities 84.1 0.2 (0.7) 5.3 (12.3) — 76.6

(in millions) Balance as of December 31, 2020 Net change in fair value
Foreign CTA(1)
Purchases / Additions Settlements Transfers out Balance as of September 30, 2021
Investments $ 59.3 44.2 0.3 105.9 (0.1) (1.9) $ 207.7
Mortgage banking derivative assets and liabilities, net 13.7 18.6 — 128.5 (127.1) — 33.7
Earn-out liabilities 85.7 1.0 — 31.3 (72.6) — 45.4
(1) CTA: Currency translation adjustments

(2) In the second quarter of 2023, Notes receivable (inclusive of accrued interest) converted to equity upon maturity and was classified as a Level 3 investment immediately.

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			Equity earnings
Other current assets - Mortgage banking derivative assets			Revenue
Other current liabilities - Mortgage banking derivative liabilities			Revenue

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Non-Recurring Fair Value Measurements

We review our investments, 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~~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 ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 or ~~2021.~~2022. See Note 6, Investments, for additional information, including information related to impairment charges recorded at the investee level.

9.DEBT

Debt is composed of the following obligations.


($ in millions)	($ in millions)	September 30, 2022		December 31, 2021	($ in millions)	June 30, 2023		December 31, 2022
Short-term debt:	Short-term debt:				Short-term debt:
Local overdraft facilities	Local overdraft facilities	$	26.1	9.2	Local overdraft facilities	$	13.0	21.2
Other short-term borrowings	Other short-term borrowings	218.1		138.7	Other short-term borrowings	99.1		143.0
Long-term senior notes, 4.4%, face amount of $275.0, due November 2022, net of debt issuance costs of $— and $0.3		—		274.7
Total short-term debt	Total short-term debt	$	244.2	422.6	Total short-term debt	$	112.1	164.2
Credit facility, net of debt issuance costs of $12.1 and $11.8		1,587.9		138.2

Long-term senior notes, 1.96%, face amount of €175.0, due June 2027, net of debt issuance costs of $0.6 and $0.6		170.8		197.9
Long-term senior notes, 2.21%, face amount of €175.0, due June 2029, net of debt issuance costs of $0.7 and $0.8		170.7		197.7
Credit facility, net of debt issuance costs of $9.5 and $11.2					Credit facility, net of debt issuance costs of $9.5 and $11.2	1,840.5		1,213.8
Long-term senior notes, 1.96%, face amount of €175.0, due June 2027, net of debt issuance costs of $0.5 and $0.5					Long-term senior notes, 1.96%, face amount of €175.0, due June 2027, net of debt issuance costs of $0.5 and $0.5	190.4		186.5
Long-term senior notes, 2.21%, face amount of €175.0, due June 2029, net of debt issuance costs of $0.6 and $0.6					Long-term senior notes, 2.21%, face amount of €175.0, due June 2029, net of debt issuance costs of $0.6 and $0.6	190.3		186.3
Total debt	Total debt	$	2,173.6	956.4	Total debt	$	2,333.3	1,750.8

Credit ~~Facility~~Facilities

~~On June 16, 2022, we executed Amendment No. 3 ("Amendment No. 3"~~We have a $3.35 billion unsecured revolving credit facility (the "Facility") tothat matures on April 14, 2026. Pricing on 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 features of the Credit Agreement, as amended, provide for (i) Greenhouse Gas Emissions KPI to align with the World Green Building Council ("WGBC") Commitment to reach net zero by 2030 and (ii) incorporates theFacility ranges from Adjusted Term Secured Overnight Financing Rate ("SOFR") successor rates for USD and other currency borrowings. On August 31, 2022, we executed Amendment No. 4 ("Amendment No. 4") to the Credit Agreement which increased the borrowing capacity from $2.75 billion to $3.35 billion. The maturity date of April 14, 2026 and covenants were unchanged by the amendments.

~~Pricing on the unsecured revolving credit facility (the "Facility") ranges from Adjusted Term SOFR~~ plus 0.875% to 1.35%, with pricing as of ~~September~~June 30, ~~2022~~2023 at Adjusted Term SOFR plus ~~0.94%~~0.99%. 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~~$0.4 million as of both ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021.~~2022.

In addition, we have an uncommitted credit agreement (the "Uncommitted Facility"), which allows for discretionary short-term liquidity of up to $400.0 million. Interest and fees are set at the time of utilization and calculated on a 360-day basis. Between quarter-end dates, we intend to use the proceeds to reduce indebtedness under the Facility at a lower interest rate. As such, the Uncommitted Facility had no outstanding balance as of both June 30, 2023 and December 31, 2022.

The following ~~tables~~table provides additional information on our ~~Facility.~~Facility and Uncommitted Facility, collectively.

Three Months Ended September 30, Nine Months Ended September 30,
($ in millions) 2022 2021 2022 2021
Average outstanding borrowings under the Facility $ 1,599.8 497.1 $ 1,295.9 432.5
Effective interest rate on the Facility 3.2 % 1.0 % 2.2 % 1.0 %


	Three Months Ended June 30,					Six Months Ended June 30,
($ in millions)	2023			2022		2023			2022
Average outstanding borrowings	$	2,315.8		1,581.9		$	2,019.5		1,135.0
Average effective interest rate	5.9		%	1.6	%	5.7		%	1.4	%

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, share repurchases and capital expenditures.

~~Table of Contents~~

Short-Term and Long-Term Debt

In addition to our ~~Facility,~~credit facilities, we have the capacity to borrow up to an additional ~~$50.1~~$53.8 million under local overdraft facilities. Amounts outstanding are presented in the debt table above.

As of ~~September~~June 30, 2022, we redeemed all of our outstanding 4.4% Senior Notes due November 2022 (the "Notes"). The aggregate outstanding principal amount of the Notes was $275.0 million. The redemption price for the Notes was equal to 100% of the principal amount of the Notes redeemed, plus accrued and unpaid interest.

~~As of September 30, 2022,~~2023, 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 ~~September~~June 30, ~~2022.~~2023.

Warehouse Facilities


		September 30, 2022			December 31, 2021			June 30, 2023			December 31, 2022
($ in millions)	($ in millions)	Outstanding Balance		Maximum Capacity	Outstanding Balance	Maximum Capacity	($ in millions)	Outstanding Balance		Maximum Capacity	Outstanding Balance	Maximum Capacity
Warehouse facilities:	Warehouse facilities:						Warehouse facilities:
BSBY plus 1.30%, expires September 18, 2023(1)		$	172.4	700.0	516.9	700.0
BSBY(1) plus 1.30%, expires September 18, 2023							BSBY(1) plus 1.30%, expires September 18, 2023	$	397.2	700.0	215.7	700.0
SOFR plus 1.30%, expires September 15, 2023~~(2)~~	SOFR plus 1.30%, expires September 15, 2023~~(2)~~	442.2		1,200.0	74.7	1,200.0	SOFR plus 1.30%, expires September 15, 2023~~(2)~~	387.4		1,200.0	132.3	1,200.0
LIBOR plus 1.30%, expired August 27, 2022		—		—	192.8	300.0
SOFR plus 1.40%, expires July 28, 2023(3)		—		400.0	—	400.0
Fannie Mae ASAP(4) program, SOFR plus 1.25%		71.6		n/a	12.5	n/a

SOFR plus 1.40%, expires July 28, 2023(2)							SOFR plus 1.40%, expires July 28, 2023(2)	78.7		400.0	9.0	400.0
Fannie Mae ASAP(3) program, SOFR plus 1.25%							Fannie Mae ASAP(3) program, SOFR plus 1.25%	78.7		n/a	99.2	n/a
Gross warehouse facilities	Gross warehouse facilities	686.2		2,300.0	796.9	2,600.0	Gross warehouse facilities	942.0		2,300.0	456.2	2,300.0
Debt issuance costs	Debt issuance costs	(1.2)		n/a	(1.2)	n/a	Debt issuance costs	(0.2)		n/a	(0.9)	n/a
Total warehouse facilities	Total warehouse facilities	$	685.0	2,300.0	795.7	2,600.0	Total warehouse facilities	$	941.8	2,300.0	455.3	2,300.0

(1) ~~In the third quarter of 2022, JLL extended the Warehouse facility; previously, the facility had a maturity date of September 19, 2022.~~Bloomberg Short-Term Bank Yield Index rate ("BSBY")

(2) In July 2023, we extended the ~~third quarter~~term of ~~2022, JLL extended~~ the Warehouse facility ~~and amended the interest rate; previously, the facility had a maturity date of September 16, 2022 and an interest rate of LIBOR plus 1.30%.~~to July 26, 2024.

(3) ~~In the third quarter of 2022, JLL extended the Warehouse facility and amended the interest rate; previously the facility had a maturity date of July 30, 2022 and an interest rate of LIBOR plus 1.60%.~~

~~(4)~~ As Soon As Pooled ("ASAP") funding 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 facilities, we are required to comply with certain financial covenants regarding (i) minimum net worth, (ii) minimum servicing-related loans and (iii) minimum adjusted leverage ratios. We remained in compliance with all covenants under our facilities as of ~~September~~June 30, ~~2022.~~2023.

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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

In order to better manage our global insurance program and support our risk management efforts, we supplement our traditional insurance coverage for certain types of claims by using a wholly-owned captive insurance company. The level of risk retained by our captive insurance company, with respect to professional indemnity claims, is up to $10.0 million per claim, inclusive of the deductible. We contract third-party insurance companies to provide coverage of risk in excess of this amount. 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,~~As of June 30, 2023 and December 31, 2022, these receivables were $2.2 million and $22.5 million, ~~as of both September 30, 2022 and December 31, 2021~~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, 2022	$	2.2
New claims	0.3
Prior year claims adjustments (including foreign currency changes)	4.4
Claims paid	—
June 30, 2023	$	6.9

December 31, 2021	$	1.2
New claims	—
Prior year claims adjustments (including foreign currency changes)	(0.1)
Claims paid	~~(0.2)~~—
~~September~~June 30, 2022	$	~~0.9~~

~~December 31, 2020~~	$	~~48.2~~
~~New claims~~	~~1.5~~
~~Prior year claims adjustments (including foreign currency changes)~~	~~(10.8)~~
~~Claims paid~~	~~(13.1)~~
~~September 30, 2021~~	$	~~25.8~~1.1

Delegated Underwriting and Servicing ("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 ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, we had loans, funded and sold, subject to such loss-sharing arrangements with an aggregate unpaid principal balance of ~~$17.0~~$19.9 billion and ~~$15.4~~$18.3 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 ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the loss-sharing guarantee obligations were ~~$26.9~~$30.2 million and ~~$24.6~~$29.0 million, respectively, and are included in Other liabilities on our Condensed Consolidated Balance Sheets. There were no loan losses incurred during the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021.~~2022.

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 September 30, 2022 and December 31, 2021, the~~The loan loss guarantee reserve was ~~$20.3~~$24.8 million as of both June 30, 2023 and ~~$22.9 million, respectively,~~December 31, 2022, and is included within Other liabilities on our Condensed Consolidated Balance Sheets.

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11.RESTRUCTURING AND ACQUISITION CHARGES

Restructuring and acquisition charges include cash and non-cash expenses. Cash-based 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, and (iii) other restructuring including lease exit charges. Non-cash charges include (i) stock-based compensation expense for retention awards issued in conjunction with ~~the HFF, Inc. ("HFF") acquisition~~prior-period acquisitions and (ii) fair value adjustments to earn-out liabilities relating to prior-period acquisition activity. Restructuring and acquisition charges are presented in the table below.


		Three Months Ended September 30,			Nine Months Ended September 30,				Three Months Ended June 30,			Six Months Ended June 30,
(in millions)	(in millions)	2022		2021	2022		2021	(in millions)	2023		2022	2023		2022
Severance and other employment-related charges	Severance and other employment-related charges	$	9.4	1.2	$	21.0	2.1	Severance and other employment-related charges	$	5.8	8.3	$	31.5	11.6
Restructuring, pre-acquisition and post-acquisition charges	Restructuring, pre-acquisition and post-acquisition charges	11.4		11.2	39.5		32.6	Restructuring, pre-acquisition and post-acquisition charges	5.1		13.9	13.3		28.1
Stock-based compensation expense for HFF retention awards		0.3		3.2	5.7		15.2
Stock-based compensation expense for post-acquisition retention awards								Stock-based compensation expense for post-acquisition retention awards	1.5		2.7	3.3		5.4
Fair value adjustments to earn-out liabilities	Fair value adjustments to earn-out liabilities	(0.1)		—	0.2		1.0	Fair value adjustments to earn-out liabilities	(0.6)		1.0	(0.6)		0.3
Restructuring and acquisition charges	Restructuring and acquisition charges	$	21.0	15.6	$	66.4	50.9	Restructuring and acquisition charges	$	11.8	25.9	$	47.5	45.4

We expect nearly all expenses related to (i) severance and other employment-related charges and (ii) restructuring, pre-acquisition and post-acquisition charges as of ~~September~~June 30, ~~2022~~2023 will be paid during the next twelve months.

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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)	(in millions)	Pension and postretirement benefit		Cumulative foreign currency translation adjustment	Total		(in millions)	Pension and postretirement benefit		Cumulative foreign currency translation adjustment	Total
Balance as of June 30, 2022		$	(42.7)	(541.2)	$	(583.9)
Other comprehensive loss before reclassification		—		(139.1)	(139.1)
Balance as of March 31, 2023							Balance as of March 31, 2023	$	(64.2)	(557.2)	$	(621.4)
Other comprehensive (loss) income before reclassification							Other comprehensive (loss) income before reclassification	(1.1)		11.1	10.0
Amounts reclassified from AOCI after tax expense of $ -, $ - and $ -	Amounts reclassified from AOCI after tax expense of $ -, $ - and $ -	—		—	—		Amounts reclassified from AOCI after tax expense of $ -, $ - and $ -	—		—	—
Other comprehensive loss after tax expense of $ - , $ - and $ -		—		(139.1)	(139.1)
Balance as of September 30, 2022		$	(42.7)	(680.3)	$	(723.0)
Other comprehensive (loss) income after tax expense of $ - , $ - and $ -							Other comprehensive (loss) income after tax expense of $ - , $ - and $ -	(1.1)		11.1	10.0
Balance as of June 30, 2023							Balance as of June 30, 2023	$	(65.3)	(546.1)	$	(611.4)

(in millions)	(in millions)	Pension and postretirement benefit		Cumulative foreign currency translation adjustment	Total		(in millions)	Pension and postretirement benefit		Cumulative foreign currency translation adjustment	Total
Balance as of June 30, 2021		$	(80.7)	(302.4)	$	(383.1)
Balance as of March 31, 2022							Balance as of March 31, 2022	$	(42.7)	(376.8)	$	(419.5)
Other comprehensive loss before reclassification	Other comprehensive loss before reclassification	—		(47.2)	(47.2)		Other comprehensive loss before reclassification	—		(164.4)	(164.4)
Amounts reclassified from AOCI after tax expense of $ - , $ - and $ -	Amounts reclassified from AOCI after tax expense of $ - , $ - and $ -	—		—	—		Amounts reclassified from AOCI after tax expense of $ - , $ - and $ -	—		—	—
Other comprehensive loss after tax expense of $ - , $ - and $ -	Other comprehensive loss after tax expense of $ - , $ - and $ -	—		(47.2)	(47.2)		Other comprehensive loss after tax expense of $ - , $ - and $ -	—		(164.4)	(164.4)
Balance as of September 30, 2021		$	(80.7)	(349.6)	$	(430.3)
Balance as of June 30, 2022							Balance as of June 30, 2022	$	(42.7)	(541.2)	$	(583.9)

(in millions)							(in millions)	Pension and postretirement benefit		Cumulative foreign currency translation adjustment	Total
Balance as of December 31, 2022							Balance as of December 31, 2022	$	(64.2)	(584.0)	$	(648.2)
Other comprehensive (loss) income before reclassification							Other comprehensive (loss) income before reclassification	(1.1)		37.9	36.8
Amounts reclassified from AOCI after tax expense of $ - , $ - and $ -							Amounts reclassified from AOCI after tax expense of $ - , $ - and $ -	—		—	—
Other comprehensive (loss) income after tax expense of $ - , $ - and $ -							Other comprehensive (loss) income after tax expense of $ - , $ - and $ -	(1.1)		37.9	36.8
Balance as of June 30, 2023							Balance as of June 30, 2023	$	(65.3)	(546.1)	$	(611.4)

(in millions)	(in millions)	Pension and postretirement benefit		Cumulative foreign currency translation adjustment	Total		(in millions)	Pension and postretirement benefit		Cumulative foreign currency translation adjustment	Total
Balance as of December 31, 2021	Balance as of December 31, 2021	$	(42.7)	(352.7)	$	(395.4)	Balance as of December 31, 2021	$	(42.7)	(352.7)	$	(395.4)
Other comprehensive loss before reclassification	Other comprehensive loss before reclassification	—		(327.6)	(327.6)		Other comprehensive loss before reclassification	—		(188.5)	(188.5)
Amounts reclassified from AOCI after tax expense of $ - , $ - and $ -	Amounts reclassified from AOCI after tax expense of $ - , $ - and $ -	—		—	—		Amounts reclassified from AOCI after tax expense of $ - , $ - and $ -	—		—	—
Other comprehensive loss after tax expense of $ - , $ - and $ -	Other comprehensive loss after tax expense of $ - , $ - and $ -	—		(327.6)	(327.6)		Other comprehensive loss after tax expense of $ - , $ - and $ -	—		(188.5)	(188.5)
Balance as of September 30, 2022		$	(42.7)	(680.3)	$	(723.0)

(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		—		(53.6)	(53.6)
Amounts reclassified from AOCI after tax expense of $ - , $ - and $ -		0.5		—	0.5
Other comprehensive income (loss) after tax expense of $ - , $ - and $ -		0.5		(53.6)	(53.1)
Balance as of September 30, 2021		$	(80.7)	(349.6)	$	(430.3)
Balance as of June 30, 2022							Balance as of June 30, 2022	$	(42.7)	(541.2)	$	(583.9)

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

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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 and ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, and our audited Consolidated Financial Statements, including the notes thereto, for the fiscal year ended December 31, ~~2021,~~2022, which are included in our ~~2021~~2022 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 ~~2021~~2022 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.

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 ~~2021~~2022 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, ~~2021.~~2022. There have been no material changes to these critical accounting policies and estimates during the ~~nine~~six months ended ~~September~~June 30, ~~2022.~~2023.

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. ~~In early 2021, macroeconomic conditions influenced by the COVID-19 pandemic more notably impacted our operations compared with the current year.~~

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Acquisitions and Dispositions

The timing of acquisitions and dispositions 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. Relating to dispositions, comparable results will include the revenues and expenses of recent dispositions and results may also include gains (losses) on the disposition. 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. For dispositions, we may also incur such incremental costs during the disposition process and these costs could have an adverse impact on net income.

Equity Earnings and Incentive Fees

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

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

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.

Transaction-Based Revenue

Transaction-based fees, which are impacted by the size and timing of our clients' transactions, from real estate investment banking, capital markets activities and other services within our segments, increase the variability of the revenue we earn. Specifically for LaSalle, we are 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. 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. In addition, this seasonality excludes the recognition of investment-generated performance fees as well as realized and unrealized co-investment equity earnings and losses (the timing of each of these can fluctuate based on a variety of factors). Generally, we recognize incentive 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 fluctuate based on a variety of factors. Non-variable operating expenses, which we treat as expenses when incurred during the year, are relatively constant on a quarterly basis.

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 ~~September~~June 30, ~~2022~~2023 and ~~2021~~2022 are not fully indicative of the results we expect to realize for the full fiscal year.

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RESULTS OF OPERATIONS

~~In conjunction with our change in reporting segments, effective January 1, 2022, comparable period information has been recast to conform with current presentation.~~

Definitions

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

•MENA: Middle East & North Africa

•n.m.: not meaningful, represented by a percentage change of greater than 1,000% or a change in margin of greater than 10,000 basis points ("bps"), favorable or unfavorable.

•~~EMEA: Europe, Middle East and Africa~~

Consolidated Operating Results

Three Months Ended September 30, Change in % Change in Local Currency
($ in millions) 2022 2021 U.S. dollars
Markets Advisory $ 1,111.5 1,079.9 31.6 3 % 6 %
Capital Markets 595.2 680.3 (85.1) (13) (8)
Work Dynamics 3,289.8 2,960.4 329.4 11 16
JLL Technologies 56.5 38.8 17.7 46 47
LaSalle 124.5 129.8 (5.3) (4) 5
Revenue $ 5,177.5 4,889.2 288.3 6 % 10 %
Gross contract costs (3,123.7) (2,810.5) (313.2) 11 16
Net non-cash MSR and mortgage banking derivative activity (5.2) (28.1) 22.9 (81) (81)
Fee revenue $ 2,048.6 2,050.6 (2.0) — % 4 %
Markets Advisory 847.9 837.0 10.9 1 4
Capital Markets 579.1 639.2 (60.1) (9) (5)
Work Dynamics 452.9 416.6 36.3 9 14
JLL Technologies 52.7 34.4 18.3 53 54
LaSalle 116.0 123.4 (7.4) (6) 3
Compensation and benefits, excluding gross contract costs $ 1,472.4 1,446.1 26.3 2 % 7 %
Operating, administrative and other expenses, excluding gross contract costs 302.1 271.3 30.8 11 17
Depreciation and amortization 55.7 52.8 2.9 5 11
Restructuring and acquisition charges 21.0 15.6 5.4 35 45
Total fee-based operating expenses 1,851.2 1,785.8 65.4 4 9
Gross contract costs 3,123.7 2,810.5 313.2 11 16
Total operating expenses $ 4,974.9 4,596.3 378.6 8 % 13 %
Operating income $ 202.6 292.9 (90.3) (31) % (30) %
Equity earnings $ 0.5 17.4 (16.9) (97) % (97) %
Adjusted EBITDA $ 276.2 352.0 (75.8) (22) % (19) %


	Three Months Ended June 30,					Change in			% Change in Local Currency
($ in millions)	2023			2022		U.S. dollars
Markets Advisory	$	1,025.4		1,118.2		(92.8)	(8)	%	(7)	%
Capital Markets	448.0			684.5		(236.5)	(35)		(34)
Work Dynamics	3,374.6			3,310.5		64.1	2		3
JLL Technologies	60.6			50.7		9.9	20		20
LaSalle	143.9			114.5		29.4	26		26
Revenue	$	5,052.5		5,278.4		(225.9)	(4)	%	(4)	%
Gross contract costs	(3,205.8)			(3,128.4)		(77.4)	2		3
Net non-cash MSR and mortgage banking derivative activity	0.6			(11.2)		11.8	(105)		(106)
Fee revenue	$	1,847.3		2,138.8		(291.5)	(14)	%	(13)	%
Markets Advisory	741.1			855.8		(114.7)	(13)		(13)
Capital Markets	435.5			660.7		(225.2)	(34)		(34)
Work Dynamics	477.8			467.0		10.8	2		3
JLL Technologies	56.5			48.0		8.5	18		18
LaSalle	136.4			107.3		29.1	27		28
Compensation and benefits, excluding gross contract costs	$	1,332.5		1,530.4		(197.9)	(13)	%	(12)	%
Operating, administrative and other expenses, excluding gross contract costs	293.3			303.2		(9.9)	(3)		(2)
Depreciation and amortization	59.9			55.4		4.5	8		9
Restructuring and acquisition charges	11.8			25.9		(14.1)	(54)		(57)
Total fee-based operating expenses	1,697.5			1,914.9		(217.4)	(11)		(11)
Gross contract costs	3,205.8			3,128.4		77.4	2		3
Total operating expenses	$	4,903.3		5,043.3		(140.0)	(3)	%	(2)	%
Operating income	$	149.2		235.1		(85.9)	(37)	%	(37)	%
Equity (losses) earnings	$	(103.5)		53.6		(157.1)	(293)	%	(293)	%
Adjusted EBITDA	$	116.1		359.0		(242.9)	(68)	%	(68)	%
Net income margin attributable to common shareholders (USD basis)	—		%	3.7	%	(370) bps			n/a
Adjusted EBITDA margin (local currency basis)	6.2		%	16.8	%	(1,050) bps			(1,060) bps
Adjusted EBITDA margin (USD basis)	6.3		%

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Consolidated Operating Results (continued)

Nine Months Ended September 30, Change in % Change in Local Currency
($ in millions) 2022 2021 U.S. dollars
Markets Advisory $ 3,229.2 2,823.9 405.3 14 % 17 %
Capital Markets 1,880.3 1,644.1 236.2 14 18
Work Dynamics 9,633.9 8,494.7 1,139.2 13 17
JLL Technologies 156.6 121.8 34.8 29 29
LaSalle 357.3 336.8 20.5 6 13
Revenue $ 15,257.3 13,421.3 1,836.0 14 % 17 %
Gross contract costs (9,156.6) (8,108.4) (1,048.2) 13 16
Net non-cash MSR and mortgage banking derivative activity (12.8) (43.5) 30.7 (71) (71)
Fee revenue $ 6,087.9 5,269.4 818.5 16 % 19 %
Markets Advisory 2,444.9 2,100.6 344.3 16 19
Capital Markets 1,831.3 1,565.9 265.4 17 21
Work Dynamics 1,330.4 1,188.6 141.8 12 16
JLL Technologies 146.0 97.1 48.9 50 51
LaSalle 335.3 317.2 18.1 6 13
Compensation and benefits, excluding gross contract costs $ 4,380.6 3,761.4 619.2 16 % 20 %
Operating, administrative and other expenses, excluding gross contract costs 874.8 742.4 132.4 18 22
Depreciation and amortization 165.5 160.3 5.2 3 7
Restructuring and acquisition charges 66.4 50.9 15.5 30 35
Total fee-based operating expenses 5,487.3 4,715.0 772.3 16 20
Gross contract costs 9,156.6 8,108.4 1,048.2 13 16
Total operating expenses $ 14,643.9 12,823.4 1,820.5 14 % 18 %
Operating income $ 613.4 597.9 15.5 3 % 4 %
Equity earnings $ 72.6 106.7 (34.1) (32) % (32) %
Adjusted EBITDA $ 908.8 874.5 34.3 4 % 6 %


	Six Months Ended June 30,					Change in			% Change in Local Currency
($ in millions)	2023			2022		U.S. dollars
Markets Advisory	$	1,931.8		2,117.7		(185.9)	(9)	%	(7)	%
Capital Markets	805.1			1,285.1		(480.0)	(37)		(36)
Work Dynamics	6,650.8			6,344.1		306.7	5		7
JLL Technologies	122.0			100.1		21.9	22		22
LaSalle	258.3			232.8		25.5	11		13
Revenue	$	9,768.0		10,079.8		(311.8)	(3)	%	(2)	%
Gross contract costs	(6,339.1)			(6,032.9)		(306.2)	5		7
Net non-cash MSR and mortgage banking derivative activity	2.4			(7.6)		10.0	(132)		(132)
Fee revenue	$	3,431.3		4,039.3		(608.0)	(15)	%	(14)	%
Markets Advisory	1,368.4			1,597.0		(228.6)	(14)		(13)
Capital Markets	785.1			1,252.2		(467.1)	(37)		(36)
Work Dynamics	919.8			877.5		42.3	5		7
JLL Technologies	114.3			93.3		21.0	23		23
LaSalle	243.7			219.3		24.4	11		14
Compensation and benefits, excluding gross contract costs	$	2,512.6		2,908.2		(395.6)	(14)	%	(12)	%
Operating, administrative and other expenses, excluding gross contract costs	584.4			572.7		11.7	2		4
Depreciation and amortization	117.4			109.8		7.6	7		9
Restructuring and acquisition charges	47.5			45.4		2.1	5		6
Total fee-based operating expenses	3,261.9			3,636.1		(374.2)	(10)		(9)
Gross contract costs	6,339.1			6,032.9		306.2	5		7
Total operating expenses	$	9,601.0		9,669.0		(68.0)	(1)	%	1	%
Operating income	$	167.0		410.8		(243.8)	(59)	%	(61)	%
Equity (losses) earnings	$	(106.1)		72.1		(178.2)	(247)	%	(247)	%
Adjusted EBITDA	$	225.1		632.6		(407.5)	(64)	%	(65)	%
Net (loss) income margin attributable to common shareholders (USD basis)	(0.1)		%	3.4	%	(350) bps			n/a
Adjusted EBITDA margin (local currency basis)	6.3		%	15.7	%	(910) bps			(940) bps
Adjusted EBITDA margin (USD basis)	6.6		%

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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:

•Fee revenue and Fee-based operating expenses;

•Adjusted EBITDA attributable to common shareholders ("Adjusted EBITDA") and Adjusted EBITDA ~~margin;~~margin (measured on fee revenue); and

•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”).~~GAAP. Any measure that eliminates components of a company’s capital structure, cost of operations or ~~investment,~~investments, or other results has limitations as a performance measure. In light of these limitations, management also considers U.S. 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 U.S. GAAP, they may not be comparable to similarly titled measures used by other companies.

Adjustments to U.S. 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 directly or 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. 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.

Net non-cash 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 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/loss on disposition reflects the gain or loss recognized on the sale or disposition of businesses. Given the low frequency of business disposals by the company historically, the gain or loss directly associated with such activity is excluded as it is not considered indicative of core operating performance. In 2023, the $1.8 million loss related to the disposition of a business in Markets Advisory. In 2022, the $7.5 million net loss ~~on disposition~~ included $10.5 million of loss related to the disposition of ~~our~~the Russia business, partially offset by a $3.0 million gain related to a disposition within JLL Technologies, both during the second quarter. In 2021, $12.0 million of the activity related to a business disposition within JLL Technologies during the first quarter and $0.4 million related to a sold business within Markets Advisory in the third quarter.Technologies.

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Interest on Employee Loans, Net of Forgiveness reflects interest accrued on employee loans less the amount of accrued interest forgiven. Certain employees (predominantly in Leasing and Capital Markets) receive cash payments structured as loans, with interest. Employees earn forgiveness of the loan based on performance, generally calculated as a percentage of revenue production. Such forgiven amounts are reflected in Compensation and benefits expense. Given the interest accrued on these employee loans and subsequent forgiveness are non-cash and the amounts perfectly offset over the life of the loan, the activity is not indicative of core operating performance and is excluded from non-GAAP measures.

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 September 30,			Nine Months Ended September 30,				Three Months Ended June 30,			Six Months Ended June 30,
(in millions)	(in millions)	2022		2021	2022		2021	(in millions)	2023		2022	2023		2022
Revenue	Revenue	$	5,177.5	4,889.2	$	15,257.3	13,421.3	Revenue	$	5,052.5	5,278.4	$	9,768.0	10,079.8

Adjustments:	Adjustments:							Adjustments:
Gross contract costs	Gross contract costs	(3,123.7)		(2,810.5)	(9,156.6)		(8,108.4)	Gross contract costs	(3,205.8)		(3,128.4)	(6,339.1)		(6,032.9)
Net non-cash MSR and mortgage banking derivative activity	Net non-cash MSR and mortgage banking derivative activity	(5.2)		(28.1)	(12.8)		(43.5)	Net non-cash MSR and mortgage banking derivative activity	0.6		(11.2)	2.4		(7.6)
Fee revenue	Fee revenue	$	2,048.6	2,050.6	$	6,087.9	5,269.4	Fee revenue	$	1,847.3	2,138.8	$	3,431.3	4,039.3

Operating expenses	Operating expenses	$	4,974.9	4,596.3	$	14,643.9	12,823.4	Operating expenses	$	4,903.3	5,043.3	$	9,601.0	9,669.0

Less: Gross contract costs	Less: Gross contract costs	(3,123.7)		(2,810.5)	(9,156.6)		(8,108.4)	Less: Gross contract costs	(3,205.8)		(3,128.4)	(6,339.1)		(6,032.9)
Fee-based operating expenses	Fee-based operating expenses	$	1,851.2	1,785.8	$	5,487.3	4,715.0	Fee-based operating expenses	$	1,697.5	1,914.9	$	3,261.9	3,636.1

Operating income	Operating income	$	202.6	292.9	$	613.4	597.9	Operating income	$	149.2	235.1	$	167.0	410.8

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


		Three Months Ended September 30,					Nine Months Ended September 30,						Three Months Ended June 30,			Six Months Ended June 30,
($ in millions)		2022			2021		2022			2021
Net income attributable to common shareholders		$	140.2		237.2		$	479.7		540.2
(in millions)												(in millions)	2023		2022	2023		2022
Net income (loss) attributable to common shareholders												Net income (loss) attributable to common shareholders	$	2.5	193.9	$	(6.7)	339.5
Add:	Add:											Add:
Interest expense, net of interest income	Interest expense, net of interest income	23.2			9.6		49.1			30.6		Interest expense, net of interest income	40.5		15.7	66.8		25.9
Provision for income taxes		42.3			65.3		155.4			148.4
Income tax provision (benefit)												Income tax provision (benefit)	0.8		72.8	(1.5)		113.1
Depreciation and amortization~~(a)~~(1)	Depreciation and amortization~~(a)~~(1)	54.7			52.8		163.5			160.3		Depreciation and amortization~~(a)~~(1)	59.0		54.4	115.5		108.8
EBITDA	EBITDA	$	260.4		364.9		$	847.7		879.5		EBITDA	$	102.8	336.8	$	174.1	587.3
Adjustments:	Adjustments:											Adjustments:
Restructuring and acquisition charges	Restructuring and acquisition charges	21.0			15.6		66.4			50.9		Restructuring and acquisition charges	11.8		25.9	47.5		45.4
Net (gain) loss on disposition		—			(0.4)		7.5			(12.4)
Net loss on disposition												Net loss on disposition	1.8		7.5	1.8		7.5
Net non-cash MSR and mortgage banking derivative activity	Net non-cash MSR and mortgage banking derivative activity	(5.2)			(28.1)		(12.8)			(43.5)		Net non-cash MSR and mortgage banking derivative activity	0.6		(11.2)	2.4		(7.6)
Interest on employee loans, net of forgiveness												Interest on employee loans, net of forgiveness	(0.9)		—	(0.7)		—
Adjusted EBITDA	Adjusted EBITDA	$	276.2		352.0		$	908.8		874.5		Adjusted EBITDA	$	116.1	359.0	$	225.1	632.6

Net income margin attributable to common shareholders		2.7		%	4.9	%	3.1		%	4.0	%

Adjusted EBITDA margin		13.3		%	17.2	%	14.8		%	16.6	%

~~(a)~~(1) This adjustment excludes the noncontrolling interest portion of amortization of acquisition-related intangibles which is not attributable to common shareholders.

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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 September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
($ in millions)	($ in millions)	2022		% Change		2022		% Change		($ in millions)	2023		% Change		2023		% Change
Revenue:	Revenue:									Revenue:
At current period exchange rates	At current period exchange rates	$	5,177.5	6	%	$	15,257.3	14	%	At current period exchange rates	$	5,052.5	(4)	%	$	9,768.0	(3)	%
Impact of change in exchange rates	Impact of change in exchange rates	223.6		n/a		475.7		n/a		Impact of change in exchange rates	37.5		n/a		158.1		n/a
At comparative period exchange rates	At comparative period exchange rates	$	5,401.1	10	%	$	15,733.0	17	%	At comparative period exchange rates	$	5,090.0	(4)	%	$	9,926.1	(2)	%

Fee revenue:	Fee revenue:									Fee revenue:
At current period exchange rates	At current period exchange rates	$	2,048.6	—	%	$	6,087.9	16	%	At current period exchange rates	$	1,847.3	(14)	%	$	3,431.3	(15)	%
Impact of change in exchange rates	Impact of change in exchange rates	90.6		n/a		190.2		n/a		Impact of change in exchange rates	9.5		n/a		50.3		n/a
At comparative period exchange rates	At comparative period exchange rates	$	2,139.2	4	%	$	6,278.1	19	%	At comparative period exchange rates	$	1,856.8	(13)	%	$	3,481.6	(14)	%

Operating income:	Operating income:									Operating income:
At current period exchange rates	At current period exchange rates	$	202.6	(31)	%	$	613.4	3	%	At current period exchange rates	$	149.2	(37)	%	$	167.0	(59)	%
Impact of change in exchange rates	Impact of change in exchange rates	1.5		n/a		7.6		n/a		Impact of change in exchange rates	(1.5)		n/a		(6.6)		n/a
At comparative period exchange rates	At comparative period exchange rates	$	204.1	(30)	%	$	621.0	4	%	At comparative period exchange rates	$	147.7	(37)	%	$	160.4	(61)	%

Adjusted EBITDA:	Adjusted EBITDA:									Adjusted EBITDA:
At current period exchange rates	At current period exchange rates	$	276.2	(22)	%	$	908.8	4	%	At current period exchange rates	$	116.1	(68)	%	$	225.1	(64)	%
Impact of change in exchange rates	Impact of change in exchange rates	8.6		n/a		18.3		n/a		Impact of change in exchange rates	(1.1)		n/a		(4.1)		n/a
At comparative period exchange rates	At comparative period exchange rates	$	284.8	(19)	%	$	927.1	6	%	At comparative period exchange rates	$	115.0	(68)	%	$	221.0	(65)	%

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Revenue

For the ~~third~~second quarter, revenue and fee revenue ~~were up 10%~~decreased 4% and 4%13%, respectively, compared with the prior-year ~~quarter; over 85% of the increase in fee revenue was organic. Our annuity-based businesses~~quarter. Businesses with resilient revenues continued to deliver ~~solid~~ fee revenue growth for the quarter, as JLL Technologies grew 18%; Property Management, within Markets Advisory, grew 9%; and Workplace Management, within Work Dynamics, grew ~~19%~~2%. Consistent with the first quarter, economic headwinds and ~~Property Management,~~continued interest rate uncertainty adversely impacted most of our transaction-based businesses, notably Investment Sales and Debt/Equity Advisory within ~~Markets Advisory, grew 12%. Transaction-based businesses, specifically~~ Capital Markets, ~~and~~ Leasing within Markets Advisory, ~~experienced challenges from the sharp increases~~and Portfolio Services and Other within Work Dynamics. However, Project Management, within Work Dynamics, was up 8% due to continued demand in ~~interest rates and swift changes in economic sentiment across the globe. Continued~~several geographies. LaSalle's double-digit top-line growth ~~in LaSalle advisory fees for the quarter~~ was ~~largely offset by lower~~attributable to higher incentive fees.

For the first ~~nine months~~half of ~~2022, we achieved strong~~2023, consolidated revenue and fee revenue ~~growth of 17%~~were down 2% and ~~19%~~14%, respectively, compared with ~~the prior year, substantially all of which was organic.~~2022. The year-to-date ~~fee revenue growth was led by Markets Advisory, up $344.3 million or 19%, and Capital Markets, up $265.4 million or 21%. Work Dynamics delivered solid fee revenue growth~~drivers of ~~16%, led by our corporate outsourcing business, Workplace Management. Higher advisory fees outpaced~~change between the ~~drop in incentive fees~~two years were similar to ~~drive fee revenue up 13% for LaSalle.~~the quarter-to-date drivers noted above.

The following highlights revenue and fee revenue by segment, for the ~~proportion of consolidated top-line growth on a local currency basis, compared with the prior year, by business line segment~~current and prior-year quarters ($ in millions). Refer to segment operating results for further detail.

Our consolidated fee revenue ~~was flat~~declined 14% in U.S. dollars (“USD”) and ~~grew 4%~~13% in local currency for the ~~third~~second quarter of ~~2022,~~2023, compared with ~~2021.~~2022. Year-to-date, consolidated fee revenue ~~increased 16%~~declined 15% in ~~U.S. dollars (“USD”)~~USD and ~~19%~~14% in local currency compared with last year. The quarter-to-date and year-to-date spreads were ~~driven by~~relatively consistent given the ~~strengthening~~mix of currencies which strengthened or weakened against the U.S. ~~dollar against most major currencies, especially~~dollar.

Operating Expenses

Consolidated operating expenses were $4.9 billion for the ~~British pound sterling, euro, Japanese yen~~second quarter, down 2% from 2022, and ~~Australian dollar.~~$9.6 billion for the first half of 2023, up 1% from 2022, while consolidated fee-based operating expenses were $1.7 billion for the second quarter, down 11% from the prior-year quarter, and $3.3 billion for the first six months of 2023, down 9%. The decrease in expenses was primarily attributable to our Capital Markets and Markets Advisory segments, partially offset by revenue-related expense growth in Work Dynamics and LaSalle. The decline in JLL Technologies expense was associated with carried interest.

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~~Operating Expenses~~

Consolidated operating expenses were $5.0 billion for the third quarter, up 13% from 2021, and $14.6 billion for the first nine months of 2022, up 18%, while consolidated fee-based operating expenses were $1.9 billion for the third quarter, up 9% from the prior-year quarter, and $5.5 billion for the first nine months, up 20%. Third quarter increases in fee-based operating expenses were primarily attributable to our Markets Advisory and Work Dynamics segments, which drove 35% and 31% of the overall increase on a local currency basis for the quarter, respectively. Year to date, Markets Advisory and Capital Markets were responsible for 37% and 32% of the overall increase, respectively. Refer to the segment discussions for additional details.

For the ~~third~~second quarter ~~and first nine months~~ of ~~2022,~~2023, Restructuring and acquisition charges ~~increased~~decreased compared with the prior-year period, ~~primarily due to~~driven by a (i) less expense associated with M&A activities, (ii) lower severance and other employment-related ~~charges;~~charges from cost-out actions and (iii) expenses in the prior year associated with the disposition of our business in Russia; refer to following table for further detail.


		Three Months Ended September 30,			Nine Months Ended September 30,				Three Months Ended June 30,			Six Months Ended June 30,
(in millions)	(in millions)	2022		2021	2022		2021	(in millions)	2023		2022	2023		2022
Severance and other employment-related charges	Severance and other employment-related charges	$	9.4	1.2	$	21.0	2.1	Severance and other employment-related charges	$	5.8	8.3	$	31.5	11.6
Restructuring, pre-acquisition and post-acquisition charges	Restructuring, pre-acquisition and post-acquisition charges	11.7		14.4	45.2		47.8	Restructuring, pre-acquisition and post-acquisition charges	6.6		16.6	16.6		33.5
Fair value adjustments that resulted in a net (decrease) increase to earn-out liabilities from prior-period acquisition activity	Fair value adjustments that resulted in a net (decrease) increase to earn-out liabilities from prior-period acquisition activity	(0.1)		—	0.2		1.0	Fair value adjustments that resulted in a net (decrease) increase to earn-out liabilities from prior-period acquisition activity	(0.6)		1.0	(0.6)		0.3
Total restructuring and acquisition charges	Total restructuring and acquisition charges	$	21.0	15.6	$	66.4	50.9	Total restructuring and acquisition charges	$	11.8	25.9	$	47.5	45.4

Interest Expense

Interest expense, net of interest income, for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 was ~~$23.2~~$40.5 million and ~~$49.1~~$66.8 million ~~respectively,~~ compared with ~~$9.6~~$15.7 million and ~~$30.6~~$25.9 million in the ~~respective prior~~prior-year periods. The increase reflected ~~an increase in the average outstanding borrowings as well as~~ a higher effective interest rate on our ~~Facility.~~facilities as well as an increase in the average outstanding borrowings. Refer to the Liquidity and Capital Resources section for additional details on our ~~Facility.~~debt.

Equity (Losses) Earnings

The following details equity (losses) earnings ~~(losses)~~ by relevant segment. Refer to the segment discussions for additional details.


		Three Months Ended September 30,			Nine Months Ended September 30,				Three Months Ended June 30,			Six Months Ended June 30,
(in millions)	(in millions)	2022		2021	2022		2021	(in millions)	2023		2022	2023		2022
JLL Technologies	JLL Technologies	$	1.0	7.3	$	64.5	58.1	JLL Technologies	$	(103.9)	44.7	$	(99.0)	63.5
LaSalle	LaSalle	(1.1)		8.4	4.0		44.8	LaSalle	(5.1)		7.0	(13.9)		5.1
Other	Other	0.6		1.7	4.1		3.8	Other	5.5		1.9	6.8		3.5
Total equity earnings		$	0.5	17.4	$	72.6	106.7
Total equity (losses) earnings								Total equity (losses) earnings	$	(103.5)	53.6	$	(106.1)	72.1

Other (Expense) Income

Other ~~income~~non-operating expense was ~~$0.5~~$1.2 million and ~~$136.0~~$1.1 million for the ~~quarter~~three and ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, compared with ~~$1.3~~income of $135.3 million and ~~$12.9~~$135.5 million for the comparable periods in ~~2021.~~2022. During the second quarter of 2022, Other income included a $142.3 million gain by a consolidated variable interest entity in which we held no equity interest. This gain, therefore, is also included in net income attributable to noncontrolling interest, and as a result, there is no net impact to Net income attributable to common shareholders (or other measures like Adjusted EBITDA, Adjusted net income and Adjusted diluted earnings per share). Also in the second quarter of 2022, we recognized a $10.5 million loss related to the disposition of our Russia business. ~~In 2021, we recognized a $12.0 million gain related to a business disposition within JLL Technologies during the first quarter.~~

Income Taxes

The income tax provision ~~for income taxes~~ was ~~$42.3 million and $155.4~~$0.8 million for the three ~~and nine~~ months ended ~~September~~June 30, ~~2022, respectively,~~2023, while the income tax benefit was $1.5 million for the six months ended June 30, 2023, representing an effective tax ~~rates~~rate ("~~ETRs"~~ETR") of ~~23.4% and 20.1%, respectively.~~21.0% for both periods. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, the income tax provision was ~~$65.3~~$72.8 million and ~~$148.4~~$113.1 million, ~~respectively,~~ representing an ETR of 21.6% for both periods. The lower ETR for the first nine months of 2022 was partially attributable to the removal of pass-through income from noncontrolling interests which is included in Income before income taxes17.8% and ~~noncontrolling interest on the Statements of Comprehensive Income but excluded from the tax computation.~~19.1%, respectively.

Table of Contents

Net Income (Loss) and Adjusted EBITDA

Net income attributable to common shareholders was $2.5 million for the three ~~and nine~~ months ended ~~September~~June 30, ~~2022~~2023, compared with $193.9 million in the prior-year quarter. For the first half of 2023, net loss attributable to common shareholders was ~~$140.2~~$6.7 million, compared with net income of $339.5 million in 2022. Adjusted EBITDA was $116.1 million and ~~$479.7~~$225.1 million ~~respectively,~~for the second quarter and first half of 2023, compared with ~~$237.2~~$359.0 million and ~~$540.2~~$632.6 million in the respective ~~prior periods. Adjusted EBITDA was $276.2 million and $908.8 million for the third quarter and first nine months of 2022, compared to $352.0 million and $874.5 million in the~~ prior-year periods. Net income attributable to common shareholders for the nine months ended September 30, 2022 included a $3.0 million gain recognized on an asset sale within JLL Technologies and a $10.5 million loss on the disposition of our Russia business. This gain/loss on disposition activity is excluded from adjusted measures.

Net income margin attributable to common shareholders for the ~~third~~second quarter was ~~2.7%,~~zero, compared with ~~4.9%~~3.7% in the prior-year quarter. Adjusted EBITDA margin for the ~~third~~second quarter, calculated on a fee-revenue basis, was ~~13.5%~~6.3% in USD ~~(13.3%~~(6.2% in local currency), compared with ~~17.2%~~16.8% in ~~2021.~~2022.

Approximately 740 basis points, or 70%, of the adjusted EBITDA margin contraction was driven by the change in equity earnings/losses, net of carried interest. The ~~decrease in margin against an outsized prior-year performance~~residual decline was primarily due to lower ~~Capital Markets~~transaction-based revenue, ~~coupled with higher compensation expense~~specifically Investment Sales, Debt/Equity Advisory, and incremental T&E and marketing expenses. The higher compensation expense reflected increased headcount and wage inflation over the trailing twelve months as well as higher commissions associated with the strong year-to-date Leasing revenue growth and changesLeasing. In addition, recent cost reduction actions mostly offset investments to ~~Capital Markets variable compensation structures. Refer to the segment operating results commentary for additional detail.~~drive future growth.

~~Table of Contents~~

Segment Operating Results

~~Effective January 1, 2022, we~~We manage and report our operations as five business segments: Markets Advisory, Capital Markets, Work Dynamics, JLL Technologies and LaSalle.

Markets Advisory offers a wide range of real estate services, including agency leasing and tenant representation, property management, and advisory and consulting services. Our Capital Markets service offerings include investment sales, equity and debt advisory, loan servicing, and valuations. Our Work Dynamics business provides a broad suite of integrated services to occupiers of real estate, including facility and project management, as well as portfolio and other services. We consider "Property Management" to be services provided to non-occupying property investors and "Workplace Management" to be services provided to owner-occupiers. Our JLL Technologies segment offers software products, solutions and services, while LaSalle provides investment management services on a global basis 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.

~~Markets Advisory~~

% Change
Three Months Ended September 30, Change in in Local
($ in millions) 2022 2021 U.S. dollars Currency
Revenue $ 1,111.5 1,079.9 31.6 3 % 6 %
Gross contract costs (263.6) (242.9) (20.7) 9 13
Fee revenue $ 847.9 837.0 10.9 1 % 4 %
Leasing 696.4 689.1 7.3 1 3
Property Management 122.9 115.9 7.0 6 12
Advisory, Consulting and Other 28.6 32.0 (3.4) (11) (3)
Compensation, operating and administrative expenses, excluding gross contract costs 717.3 688.9 28.4 4 7
Depreciation and amortization 17.6 16.4 1.2 7 12
Segment fee-based operating expenses (excluding restructuring and acquisition charges) 734.9 705.3 29.6 4 8
Gross contract costs 263.6 242.9 20.7 9 13
Segment operating expenses $ 998.5 948.2 50.3 5 % 9 %
Equity (losses) earnings $ (0.2) 0.1 (0.3) (300) % (275) %
Adjusted EBITDA $ 132.1 149.2 (17.1) (11) % (8) %

3836

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Markets Advisory ~~(continued)~~
% Change
Nine Months Ended September 30, Change in in Local
($ in millions) 2022 2021 U.S. dollars Currency
Revenue $ 3,229.2 2,823.9 405.3 14 % 17 %
Gross contract costs (784.3) (723.3) (61.0) 8 11
Fee revenue $ 2,444.9 2,100.6 344.3 16 % 19 %
Leasing 1,996.8 1,669.9 326.9 20 22
Property Management 363.7 344.9 18.8 5 10
Advisory, Consulting and Other 84.4 85.8 (1.4) (2) 4
Compensation, operating and administrative expenses, excluding gross contract costs 2,072.3 1,775.0 297.3 17 19
Depreciation and amortization 52.0 49.0 3.0 6 9
Segment fee-based operating expenses (excluding restructuring and acquisition charges) 2,124.3 1,824.0 300.3 16 19
Gross contract costs 784.3 723.3 61.0 8 11
Segment operating expenses $ 2,908.6 2,547.3 361.3 14 % 17 %
Equity earnings $ 0.7 0.6 0.1 17 % 7 %
Adjusted EBITDA $ 377.3 329.1 48.2 15 % 18 %

In the third quarter, Markets Advisory achieved modest revenue and fee revenue growth following a strong prior-year quarter. Leasing results were mixed as broad-based growth in the office sector across geographies and an over $30 million outsized non-office transaction in the U.S. were largely offset by declines in industrial and retail. While average deal size again increased this quarter, particularly in office, deal volume fell in substantially all asset classes. For the first nine months, all major asset classes, except retail, achieved double-digit growth compared with 2021, led by office and industrial, driven by a strong first half of 2022.Average year-to-date deal size in the U.S. increased across all major asset classes while deal volume fell year over year in all major asset classes except office, which increased. The Americas, with both organic and inorganic contributions, led the increase in Property Management fee revenue for the third quarter and first nine months of the year.

The increases in segment operating expenses and segment fee-based operating expenses for both the third quarter and first nine months of 2022, compared with the prior-year periods, were mostly attributable to higher compensation costs. These incremental expenses were primarily due to (i) leasing brokers achieving higher commission tiers earlier in 2022 compared to 2021, which correlates to the 2022 year-to-date revenue growth, and (ii) additional headcount over the last twelve months to meet increased business demand. Specifically for the third quarter, higher compensation expense was partially due to the timing of bonus accruals year-over-year, however, this was not a driver of year-to-date expense movement. In addition, increased T&E and marketing costs, reflecting more normalized business activities following the past couple years which were more heavily impacted by the pandemic, contributed to higher expenses compared with the prior-year periods.

Adjusted EBITDA margin for the quarter, calculated on a fee-revenue basis, was 15.6% in USD (15.8% in local currency), compared with 17.8% in 2021. The lower margin was primarily driven by the expense drivers noted above, which outpaced the fee revenue growth.

~~Table of Contents~~

~~Capital Markets~~

% Change
Three Months Ended September 30, Change in in Local
($ in millions) 2022 2021 U.S. dollars Currency
Revenue $ 595.2 680.3 (85.1) (13) % (8) %
Gross contract costs (10.9) (13.0) 2.1 (16) (6)
Net non-cash MSR and mortgage banking derivative activity (5.2) (28.1) 22.9 (81) (81)
Fee revenue $ 579.1 639.2 (60.1) (9) % (5) %
Investment Sales, Debt/Equity Advisory and Other 452.1 516.6 (64.5) (12) (8)
Valuation Advisory 86.5 84.1 2.4 3 12
Loan Servicing 40.5 38.5 2.0 5 5
Compensation, operating and administrative expenses, excluding gross contract costs 496.6 503.0 (6.4) (1) 4
Depreciation and amortization 15.2 15.1 0.1 1 3
Segment fee-based operating expenses (excluding restructuring and acquisition charges) 511.8 518.1 (6.3) (1) 4
Gross contract costs 10.9 13.0 (2.1) (16) (6)
Segment operating expenses $ 522.7 531.1 (8.4) (2) % 3 %
Equity earnings $ 0.7 1.3 (0.6) (46) % (46) %
Adjusted EBITDA $ 83.2 138.4 (55.2) (40) % (37) %


									% Change
	Three Months Ended June 30,					Change in			in Local
($ in millions)	2023			2022		U.S. dollars			Currency
Revenue	$	1,025.4		1,118.2		(92.8)	(8)	%	(7)	%
Gross contract costs	(284.3)			(262.4)		(21.9)	8		10
Fee revenue	$	741.1		855.8		(114.7)	(13)	%	(13)	%
Leasing	588.0			703.5		(115.5)	(16)		(16)
Property Management	131.0			122.2		8.8	7		9
Advisory, Consulting and Other	22.1			30.1		(8.0)	(27)		(25)
Compensation and benefits, excluding gross contract costs	$	546.4		618.5		(72.1)	(12)	%	(11)	%
Operating, administrative and other expenses, excluding gross contract costs	93.3			103.8		(10.5)	(10)		(9)

Depreciation and amortization	17.4			17.3		0.1	1		2
Segment fee-based operating expenses (excluding restructuring and acquisition charges)	657.1			739.6		(82.5)	(11)		(11)
Gross contract costs	284.3			262.4		21.9	8		10
Segment operating expenses	$	941.4		1,002.0		(60.6)	(6)	%	(5)	%
Equity (losses) earnings	$	(0.1)		0.4		(0.5)	(125)	%	(97)	%
Adjusted EBITDA	$	99.4		134.0		(34.6)	(26)	%	(26)	%
Adjusted EBITDA margin (local currency basis)	13.2		%	15.7	%	(230) bps			(250) bps
Adjusted EBITDA margin (USD basis)	13.4		%

Table of Contents

Markets Advisory (continued)


									% Change
	Six Months Ended June 30,					Change in			in Local
($ in millions)	2023			2022		U.S. dollars			Currency
Revenue	$	1,931.8		2,117.7		(185.9)	(9)	%	(7)	%
Gross contract costs	(563.4)			(520.7)		(42.7)	8		11
Fee revenue	$	1,368.4		1,597.0		(228.6)	(14)	%	(13)	%
Leasing	1,070.5			1,300.4		(229.9)	(18)		(17)
Property Management	258.1			240.8		17.3	7		10
Advisory, Consulting and Other	39.8			55.8		(16.0)	(29)		(26)
Compensation and benefits, excluding gross contract costs	$	1,007.4		1,159.3		(151.9)	(13)	%	(12)	%
Operating, administrative and other expenses, excluding gross contract costs	186.9			195.7		(8.8)	(4)		(3)
Depreciation and amortization	34.5			34.4		0.1	—		2
Segment fee-based operating expenses	1,228.8			1,389.4		(160.6)	(12)		(10)
Gross contract costs	563.4			520.7		42.7	8		11
Segment operating expenses	$	1,792.2		1,910.1		(117.9)	(6)	%	(5)	%
Equity earnings	$	0.2		0.9		(0.7)	(78)	%	(72)	%
Adjusted EBITDA	$	171.0		245.2		(74.2)	(30)	%	(31)	%
Adjusted EBITDA margin (local currency basis)	12.3		%	15.4	%	(290) bps			(310) bps
Adjusted EBITDA margin (USD basis)	12.5		%

The declines in Markets Advisory revenue and fee revenue, both on a year-to-date and quarter-to-date basis, were predominantly driven by Leasing, which continues to reflect (i) lower transaction volume across asset types, particularly in the office and industrial sectors, and (ii) a decrease in average deal size across most asset types, most notably in the U.S. office sector. Specific to the office sector, our change in Leasing was in line with trends in global market volumes as gross absorption fell 14% globally, according to JLL Research. The decreases in Advisory, Consulting and Other, for both the quarter and first half of the year, were substantially driven by the absence of revenues associated with a business exited during the fourth quarter of 2022. These decreases were partially offset by Property Management growth, which was primarily attributable to portfolio expansion in the Americas and incremental fees from interest-rate sensitive contract terms in the United Kingdom.

The net decreases in segment operating expenses and segment fee-based operating expenses for the quarter, compared with the prior-year quarter, were primarily due to lower commissions expense, correlated with the revenue decline, as well as lower incentive compensation expense, reflecting segment performance.

The second-quarter adjusted EBITDA margin contraction was predominantly attributable to the lower Leasing fee revenue, net of the decreased operating expenses noted above.

Table of Contents

Capital Markets


									% Change
	Three Months Ended June 30,					Change in			in Local
($ in millions)	2023			2022		U.S. dollars			Currency
Revenue	$	448.0		684.5		(236.5)	(35)	%	(34)	%
Gross contract costs	(13.1)			(12.6)		(0.5)	4		6
Net non-cash MSR and mortgage banking derivative activity	0.6			(11.2)		11.8	(105)		(106)
Fee revenue	$	435.5		660.7		(225.2)	(34)	%	(34)	%
Investment Sales, Debt/Equity Advisory and Other	309.9			528.0		(218.1)	(41)		(41)
Valuation Advisory	86.6			92.3		(5.7)	(6)		(5)
Loan Servicing	39.0			40.4		(1.4)	(3)		(3)
Compensation and benefits, excluding gross contract costs	$	335.4		469.9		(134.5)	(29)	%	(28)	%
Operating, administrative and other expenses, excluding gross contract costs	69.2			64.8		4.4	7		7

Depreciation and amortization	16.2			15.4		0.8	5		5
Segment fee-based operating expenses (excluding restructuring and acquisition charges)	420.8			550.1		(129.3)	(24)		(23)
Gross contract costs	13.1			12.6		0.5	4		6
Segment operating expenses	$	433.9		562.7		(128.8)	(23)	%	(23	%)
Equity earnings	$	4.8		0.6		4.2	700	%	761	%
Adjusted EBITDA	$	36.0		126.7		(90.7)	(72)	%	(72)	%
Adjusted EBITDA margin (local currency basis)	8.2		%	19.2	%	(1,090) bps			(1,100) bps
Adjusted EBITDA margin (USD basis)	8.3		%

Table of Contents

Capital Markets (continued)


									% Change
	Six Months Ended June 30,					Change in			in Local
($ in millions)	2023			2022		U.S. dollars			Currency
Revenue	$	805.1		1,285.1		(480.0)	(37)	%	(36)	%
Gross contract costs	(22.4)			(25.3)		2.9	(11)		(9)
Net non-cash MSR and mortgage banking derivative activity	2.4			(7.6)		10.0	(132)		(132)
Fee revenue	$	785.1		1,252.2		(467.1)	(37)	%	(36)	%
Investment Sales, Debt/Equity Advisory and Other	545.1			996.5		(451.4)	(45)		(45)
Valuation Advisory	163.6			175.4		(11.8)	(7)		(4)
Loan Servicing	76.4			80.3		(3.9)	(5)		(5)
Compensation and benefits, excluding gross contract costs	$	619.3		888.1		(268.8)	(30)	%	(29)	%
Operating, administrative and other expenses, excluding gross contract costs	125.3			120.7		4.6	4		6
Depreciation and amortization	32.1			31.0		1.1	4		4
Segment fee-based operating expenses	776.7			1,039.8		(263.1)	(25)		(24)
Gross contract costs	22.4			25.3		(2.9)	(11)		(9)
Segment operating expenses	$	799.1		1,065.1		(266.0)	(25)	%	(24)	%
Equity earnings	$	5.4		1.4		4.0	286	%	285	%
Adjusted EBITDA	$	46.7		244.9		(198.2)	(81)	%	(81)	%
Adjusted EBITDA margin (local currency basis)	5.8		%	19.6	%	(1,370) bps			(1,380) bps
Adjusted EBITDA margin (USD basis)	5.9		%

The lower Capital Markets revenue and fee revenue for the quarter and first half of the year reflected muted transaction volume compared with 2022. This impact was most acute in Investment Sales and Debt/Equity Advisory, which experienced declines across all asset classes and most geographies compared with the prior-year quarter. This outperformed global trends as second-quarter market volumes for investment sales were down 54% in USD (53% in local currency), according to JLL Research. The net decline in Loan Servicing, both on a year-to-date and quarter-to-date basis, was attributable to lower prepayment fees (down $3.7 million for the quarter and $8.2 million for the first half of the year), as refinancing activity slowed over the last twelve months, mostly offset by continued growth in the portfolio originated under the Fannie Mae DUS program.

The net decreases in segment operating expenses and segment fee-based operating expenses for the quarter and first half of the year, compared with the prior-year periods, were almost entirely due to lower commissions expense, correlated with the decline in revenue, as well as lower incentive compensation expense, reflecting segment performance. While not as impactful on the year-to-date performance, the change in the loan loss reserve was a $7.0 million negative impact (reflected in Operating, administrative and other expenses) to the current quarter, compared with last year.

The second-quarter adjusted EBITDA margin contraction was predominantly driven by the meaningful decline in fee revenue, net of the expense drivers noted above. In addition, higher equity earnings, which are not expected to recur in future years, provided a modest performance boost for the current quarter.

Table of Contents

~~Capital Markets (continued)~~Work Dynamics


									% Change
	Three Months Ended June 30,					Change in			in Local
($ in millions)	2023			2022		U.S. dollars			Currency
Revenue	$	3,374.6		3,310.5		64.1	2	%	3	%
Gross contract costs	(2,896.8)			(2,843.5)		(53.3)	2		3
Fee revenue	$	477.8		467.0		10.8	2	%	3	%
Workplace Management	188.2			184.9		3.3	2		2
Project Management	229.7			214.9		14.8	7		8
Portfolio Services and Other	59.9			67.2		(7.3)	(11)		(11)
Compensation and benefits, excluding gross contract costs	$	321.0		304.0		17.0	6	%	6	%
Operating, administrative and other expenses, excluding gross contract costs	101.2			106.3		(5.1)	(5)		(4)

Depreciation and amortization	19.9			17.0		2.9	17		18
Segment fee-based operating expenses (excluding restructuring and acquisition charges)	442.1			427.3		14.8	3		4
Gross contract costs	2,896.8			2,843.5		53.3	2		3
Segment operating expenses	$	3,338.9		3,270.8		68.1	2	%	3	%
Equity earnings	$	0.8		0.9		(0.1)	(11)	%	(15)	%
Adjusted EBITDA	$	56.2		57.6		(1.4)	(2)	%	(3)	%
Adjusted EBITDA margin (local currency basis)	11.6		%	12.4	%	(60) bps			(80) bps
Adjusted EBITDA margin (USD basis)	11.8		%

% Change
Nine Months Ended September 30, Change in in Local
($ in millions) 2022 2021 U.S. dollars Currency
Revenue $ 1,880.3 1,644.1 236.2 14 % 18 %
Gross contract costs (36.2) (34.7) (1.5) 4 14
Net non-cash MSR and mortgage banking derivative activity (12.8) (43.5) 30.7 (71) (71)
Fee revenue $ 1,831.3 1,565.9 265.4 17 % 21 %
Investment Sales, Debt/Equity Advisory and Other 1,448.6 1,216.0 232.6 19 23
Valuation Advisory 261.9 250.8 11.1 4 11
Loan Servicing 120.8 99.1 21.7 22 22
Compensation, operating and administrative expenses, excluding gross contract costs 1,505.4 1,251.0 254.4 20 25
Depreciation and amortization 46.2 47.7 (1.5) (3) (1)
Segment fee-based operating expenses (excluding restructuring and acquisition charges) 1,551.6 1,298.7 252.9 19 24
Gross contract costs 36.2 34.7 1.5 4 14
Segment operating expenses $ 1,587.8 1,333.4 254.4 19 % 23 %
Equity earnings $ 2.1 3.1 (1.0) (32) % (31) %
Adjusted EBITDA $ 328.1 318.3 9.8 3 % 6 %

The slight drop in third-quarter Capital Markets revenue and fee revenue was primarily driven by lower Investment Sales and Equity Advisory fees as rising interest rates and economic uncertainty impacted transaction volumes and elongated the deal-cycle time. Globally, market volumes of third-quarter investment sales were down 24% in USD (18% in local currency) according to JLL Research. An outstanding first half of 2022 drove broad-based year-to-date Capital Markets fee revenue growth, led by Investment Sales and Debt Advisory activity. Higher Loan Servicing revenue for both the three- and nine-month periods were attributable to continued growth of the servicing portfolio, particularly under our Fannie Mae DUS license.

For the third quarter of 2022, segment operating expenses and segment fee-based operating expenses were largely flat as variable compensation expenses were slightly lower, a product of lower third-quarter revenue, offset by higher T&E and marketing expenses. For the first nine months of 2022, compared with the comparable prior-year period, expense growth was primarily driven by (i) wage inflation and incremental headcount over the last twelve months, (ii) higher year-to-date commissions, reflecting changes to the incentive compensation structure in 2022, and (iii) an increase in T&E and marketing expenses. The increase in commissions was partially offset by reductions to other variable compensation plans as a result of changes to the commission structures. In addition, expenses for the first nine months of 2021 included a $13.8 million non-cash reduction to loan loss credit reserves, versus a comparable reduction of $2.6 million recognized this year.

Adjusted EBITDA margin for the quarter, calculated on a fee-revenue basis, was 14.4% in USD (14.3% in local currency), compared with 21.7% in 2021. The margin contraction was primarily due to the decline in fee revenue and expense drivers noted above.

Table of Contents

Work Dynamics (continued)


								% Change											% Change
		Three Months Ended September 30,			Change in			in Local			Six Months Ended June 30,					Change in			in Local
($ in millions)	($ in millions)	2022		2021	U.S. dollars			Currency		($ in millions)	2023			2022		U.S. dollars			Currency
Revenue	Revenue	$	3,289.8	2,960.4	329.4	11	%	16	%	Revenue	$	6,650.8		6,344.1		306.7	5	%	7	%
Gross contract costs	Gross contract costs	(2,836.9)		(2,543.8)	(293.1)	12		16		Gross contract costs	(5,731.0)			(5,466.6)		(264.4)	5		7

Fee revenue	Fee revenue	$	452.9	416.6	36.3	9	%	14	%	Fee revenue	$	919.8		877.5		42.3	5	%	7	%
Workplace Management	Workplace Management	183.6		160.0	23.6	15		19		Workplace Management	371.4			366.9		4.5	1		3
Project Management	Project Management	210.0		193.6	16.4	8		16		Project Management	440.6			390.6		50.0	13		15
Portfolio Services and Other	Portfolio Services and Other	59.3		63.0	(3.7)	(6)		(2)		Portfolio Services and Other	107.8			120.0		(12.2)	(10)		(9)
Compensation, operating and administrative expenses, excluding gross contract costs		399.6		379.2	20.4	5		12
Compensation and benefits, excluding gross contract costs										Compensation and benefits, excluding gross contract costs	$	626.0		585.8		40.2	7	%	9	%
Operating, administrative and other expenses, excluding gross contract costs										Operating, administrative and other expenses, excluding gross contract costs	212.7			200.1		12.6	6		9
Depreciation and amortization	Depreciation and amortization	17.6		16.9	0.7	4		12		Depreciation and amortization	39.2			33.5		5.7	17		20
Segment fee-based operating expenses (excluding restructuring and acquisition charges)		417.2		396.1	21.1	5		12
Segment fee-based operating expenses										Segment fee-based operating expenses	877.9			819.4		58.5	7		10
Gross contract costs	Gross contract costs	2,836.9		2,543.8	293.1	12		16		Gross contract costs	5,731.0			5,466.6		264.4	5		7
Segment operating expenses	Segment operating expenses	$	3,254.1	2,939.9	314.2	11	%	16	%	Segment operating expenses	$	6,608.9		6,286.0		322.9	5	%	7	%
Equity earnings	Equity earnings	$	0.1	0.3	(0.2)	(67)	%	(52)	%	Equity earnings	$	1.2		1.2		—	—	%	—	%
Adjusted EBITDA	Adjusted EBITDA	$	53.4	37.7	15.7	42	%	38	%	Adjusted EBITDA	$	81.9		92.8		(10.9)	(12)	%	(15)	%
Adjusted EBITDA margin (local currency basis)										Adjusted EBITDA margin (local currency basis)	8.5		%	10.6	%	(170) bps			(210) bps
Adjusted EBITDA margin (USD basis)										Adjusted EBITDA margin (USD basis)	8.9		%

Work Dynamics revenue and fee revenue increases compared with the prior-year quarter were driven by strength in Project Management and modest growth in Workplace Management, partially offset by lower Portfolio Services and Other. Project Management had continued demand in certain geographies, most notably Australia, France, MENA and the U.K. for the second quarter (U.S., France, MENA and the U.K. on a half-year view). The decline in Portfolio Services revenue reflected the meaningful correlation between Portfolio Services and Leasing activity.

The increases in segment operating expenses and segment fee-based operating expenses for the first half of the year, compared with the prior-year period, were primarily due to revenue-related expense growth over the trailing twelve months and first-quarter 2023 contract losses (included in Operating, administrative and other expenses) related to certain Tetris contracts in Europe. For the second quarter, compared with the prior-year quarter, continued investments in technology and headcount to support contract wins and a charge related to the final settlement associated with a legal claim drove the increases in segment operating expenses and segment fee-based operating expenses.

The net second-quarter adjusted EBITDA margin contraction was attributable to the decline in higher-margin Portfolio Services revenue and continued investments in technology and headcount to support future growth. In addition, and partially offsetting these dilutive impacts, the prior-year margin reflected $4.1 million of net contract losses in Europe which did not recur this quarter.

Table of Contents

JLL Technologies


									% Change
	Three Months Ended June 30,					Change in			in Local
($ in millions)	2023			2022		U.S. dollars			Currency
Revenue	$	60.6		50.7		9.9	20	%	20	%
Gross contract costs	(4.1)			(2.7)		(1.4)	52		53
Fee revenue	$	56.5		48.0		8.5	18	%	18	%
Compensation and benefits, excluding gross contract costs(1)	$	45.3		65.8		(20.5)	(31)	%	(31	%)
Operating, administrative and other expenses, excluding gross contract costs	12.5			13.9		(1.4)	(10)		(9)

Depreciation and amortization	4.1			3.9		0.2	5		6
Segment fee-based operating expenses (excluding restructuring and acquisition charges)	61.9			83.6		(21.7)	(26)		(26)
Gross contract costs	4.1			2.7		1.4	52		53
Segment operating expenses	$	66.0		86.3		(20.3)	(24	%)	(23	%)
Equity (losses) earnings	$	(103.9)		44.7		(148.6)	(332)	%	(332)	%
Adjusted EBITDA	$	(105.2)		12.9		(118.1)	(916)	%	(914)	%
Adjusted EBITDA margin (local currency basis)	(186.9)		%	27.0	%	n.m.			n.m.
Adjusted EBITDA margin (USD basis)	(186.2)		%

Table of Contents

JLL Technologies (continued)


									% Change
	Six Months Ended June 30,					Change in			in Local
($ in millions)	2023			2022		U.S. dollars			Currency
Revenue	$	122.0		100.1		21.9	22	%	22	%
Gross contract costs	(7.7)			(6.8)		(0.9)	13		13
Fee revenue	$	114.3		93.3		21.0	23	%	23	%
Compensation and benefits, excluding gross contract costs(1)	$	106.6		128.0		(21.4)	(17)	%	(16	%)
Operating, administrative and other expenses, excluding gross contract costs	27.2			28.1		(0.9)	(3)		(3)
Depreciation and amortization	8.0			7.7		0.3	4		5
Segment fee-based operating expenses	141.8			163.8		(22.0)	(13)		(13)
Gross contract costs	7.7			6.8		0.9	13		13
Segment operating expenses	$	149.5		170.6		(21.1)	(12)	%	(12	%)
Equity (losses) earnings	$	(99.0)		63.5		(162.5)	(256)	%	(256)	%
Adjusted EBITDA	$	(118.5)		0.6		(119.1)	n.m.		n.m.
Adjusted EBITDA margin (local currency basis)	(104.1)		%	0.6	%	n.m.			n.m.
Adjusted EBITDA margin (USD basis)	(103.7)		%

(1) Included in Compensation and benefits expense for JLL Technologies is a reduction in carried interest expense of $10.0 million and $9.3 million for the three and six months ended June 30, 2023, respectively, and a carried interest expense of $9.8 million and $16.0 million for the three and six months ended June 30, 2022, related to Equity earnings of the segment.

The increases in JLL Technologies revenue and fee revenue over the prior-year quarter were primarily driven by growth in solutions and service offerings, largely from existing enterprise clients.

Equity losses for the quarter and first half of the year resulted from current-quarter valuation declines in JLL Technologies' investments due to subsequent financing rounds at decreased per-share values. These equity losses were predominantly driven by two investments for which we previously recognized significant equity earnings.

A notable driver of the change in Segment operating loss is a $10.0 million reduction in carried interest expense this quarter ($9.3 million for the first half of the year) associated with the equity losses, compared with $9.8 million of incremental expense in the second quarter of 2022 ($16.0 million for the first half of 2022) associated with the equity earnings.

The second-quarter margin decline was entirely driven by the change in equity earnings/losses, net of carried interest, as fee revenue growth with recent cost reductions drove improvement in segment operating loss.

Table of Contents

LaSalle


									% Change
	Three Months Ended June 30,					Change in			in Local
($ in millions)	2023			2022		U.S. dollars			Currency
Revenue	$	143.9		114.5		29.4	26	%	26	%
Gross contract costs	(7.5)			(7.2)		(0.3)	4		4
Fee revenue	$	136.4		107.3		29.1	27	%	28	%
Advisory fees	94.4			98.2		(3.8)	(4)		(3)
Transaction fees and other	6.2			8.1		(1.9)	(23)		(19)
Incentive fees	35.8			1.0		34.8	n.m.		n.m.
Compensation and benefits, excluding gross contract costs	$	84.4		72.2		12.2	17	%	18	%
Operating, administrative and other expenses, excluding gross contract costs	17.1			14.4		2.7	19		20

Depreciation and amortization	2.3			1.8		0.5	28		30
Segment fee-based operating expenses (excluding restructuring & acquisition charges)	103.8			88.4		15.4	17		19
Gross contract costs	7.5			7.2		0.3	4		4
Segment operating expenses	$	111.3		95.6		15.7	16	%	17	%
Equity (losses) earnings	$	(5.1)		7.0		(12.1)	(173)	%	(172)	%
Adjusted EBITDA	$	29.7		27.8		1.9	7	%	7	%
Adjusted EBITDA margin (local currency basis)	21.7		%	26.0	%	(420) bps			(430) bps
Adjusted EBITDA margin (USD basis)	21.8		%

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~~Work Dynamics~~LaSalle (continued)


								% Change											% Change
		Nine Months Ended September 30,			Change in			in Local			Six Months Ended June 30,					Change in			in Local
($ in millions)	($ in millions)	2022		2021	U.S. dollars			Currency		($ in millions)	2023			2022		U.S. dollars			Currency
Revenue	Revenue	$	9,633.9	8,494.7	1,139.2	13	%	17	%	Revenue	$	258.3		232.8		25.5	11	%	13	%

Gross contract costs	Gross contract costs	(8,303.5)		(7,306.1)	(997.4)	14		17		Gross contract costs	(14.6)			(13.5)		(1.1)	8		8

Fee revenue	Fee revenue	$	1,330.4	1,188.6	141.8	12	%	16	%	Fee revenue	$	243.7		219.3		24.4	11	%	14	%
Workplace Management		550.5		478.3	72.2	15		18
Project Management		600.6		541.3	59.3	11		16
Portfolio Services and Other		179.3		169.0	10.3	6		9
Compensation, operating and administrative expenses, excluding gross contract costs		1,185.5		1,074.9	110.6	10		15
Advisory fees										Advisory fees	189.1			188.9		0.2	—		2
Transaction fees and other										Transaction fees and other	15.3			25.2		(9.9)	(39)		(36)
Incentive fees										Incentive fees	39.3			5.2		34.1	656		671
Compensation and benefits, excluding gross contract costs										Compensation and benefits, excluding gross contract costs	$	153.3		147.0		6.3	4	%	7	%
Operating, administrative and other expenses, excluding gross contract costs										Operating, administrative and other expenses, excluding gross contract costs	32.3			28.1		4.2	15		18
Depreciation and amortization	Depreciation and amortization	51.1		49.9	1.2	2		7		Depreciation and amortization	3.6			3.2		0.4	13		14
Segment fee-based operating expenses (excluding restructuring and acquisition charges)		1,236.6		1,124.8	111.8	10		15
Segment fee-based operating expenses										Segment fee-based operating expenses	189.2			178.3		10.9	6		9
Gross contract costs	Gross contract costs	8,303.5		7,306.1	997.4	14		17		Gross contract costs	14.6			13.5		1.1	8		8
Segment operating expenses	Segment operating expenses	$	9,540.1	8,430.9	1,109.2	13	%	17	%	Segment operating expenses	$	203.8		191.8		12.0	6	%	9	%
Equity earnings		$	1.3	0.1	1.2	n.m.

Equity (losses) earnings										Equity (losses) earnings	$	(13.9)		5.1		(19.0)	(373)	%	(372)	%
Adjusted EBITDA	Adjusted EBITDA	$	146.2	113.8	32.4	28	%	26	%	Adjusted EBITDA	$	44.0		49.1		(5.1)	(10)	%	(9)	%
Adjusted EBITDA margin (local currency basis)										Adjusted EBITDA margin (local currency basis)	17.9		%	22.4	%	(430) bps			(450) bps
Adjusted EBITDA margin (USD basis)										Adjusted EBITDA margin (USD basis)	18.1		%

For both the second quarter and first half of 2023, LaSalle revenue and fee revenue growth was driven by incentive fees earned on assets managed on behalf of clients, specifically in Japan and United States. Specific to the quarter, the slightly lower advisory fees were the result of recent valuation declines impacting assets under management. Advisory fees for the first six months were marginally up compared with 2022.

The ~~increases in Work Dynamics~~equity losses on both a quarter-to-date and year-to-date ~~fee revenue~~basis were driven by Workplace Management and Project Management. New client wins and the expansion of existing global mandates drove the growth in Workplace Management, whereas Project Management saw continued momentum in project demand across the three- and nine-month periodsprimarily attributable to net valuation declines in the ~~return-to-office~~co-investment portfolio. For the second quarter and first half of 2023, this decline was partially offset by the co-investment in a LaSalle-managed publicly-traded REIT in Japan, which had a notable negative share price movement ~~and fewer pandemic-driven restrictions.~~in the prior-year periods.

The increases in segment operating expenses and segment fee-based operating expenses for the ~~third~~second quarter and first ~~nine months~~half of ~~2022, compared with the prior-year periods, were primarily due to revenue-related compensation expense increases to support the revenue growth and incremental T&E and marketing expenses.~~

Adjusted EBITDA margin for the quarter, calculated on a fee-revenue basis, was 11.8% in USD (10.9% in local currency), compared with 9.0% in 2021. The margin expansion was attributable to the fee revenue growth described above and cost management strategies, partially offset by incremental T&E and marketing expenses.

~~Table of Contents~~

~~JLL Technologies~~
% Change
Three Months Ended September 30, Change in in Local
($ in millions) 2022 2021 U.S. dollars Currency
Revenue $ 56.5 38.8 17.7 46 % 47 %
Gross contract costs (3.8) (4.4) 0.6 (14) (12)
Fee revenue $ 52.7 34.4 18.3 53 % 54 %
Compensation, operating and administrative expenses, excluding gross contract costs(1)
69.0 52.4 16.6 32 35
Depreciation and amortization 3.7 2.2 1.5 68 69
Segment fee-based operating expenses (excluding restructuring and acquisition charges) 72.7 54.6 18.1 33 36
Gross contract costs 3.8 4.4 (0.6) (14) (12)
Segment operating expenses $ 76.5 59.0 17.5 30 % 32 %
Equity earnings $ 1.0 7.3 (6.3) (86) % (86) %
Adjusted EBITDA $ (15.3) (10.7) (4.6) (43) % (50) %

~~Table of Contents~~

~~JLL Technologies (continued)~~
% Change
Nine Months Ended September 30, Change in in Local
($ in millions) 2022 2021 U.S. dollars Currency
Revenue $ 156.6 121.8 34.8 29 % 29 %
Gross contract costs (10.6) (24.7) 14.1 (57) (57)
Fee revenue $ 146.0 97.1 48.9 50 % 51 %
Compensation, operating and administrative expenses, excluding gross contract costs(1)
225.1 153.4 71.7 47 48
Depreciation and amortization 11.4 7.3 4.1 56 58
Segment fee-based operating expenses (excluding restructuring and acquisition charges) 236.5 160.7 75.8 47 49
Gross contract costs 10.6 24.7 (14.1) (57) (57)
Segment operating expenses $ 247.1 185.4 61.7 33 % 35 %
Equity earnings $ 64.5 58.1 6.4 11 % 11 %
Adjusted EBITDA $ (14.7) 1.8 (16.5) (917) % (946) %

~~(1)~~Included in Compensation, operating and administrative expenses for JLL Technologies is carried interest expense related to equity earnings of the segment. Such amounts were $0.6 million and $16.6 million for the three and nine months ended September 30, 2022, respectively, and $0.7 million and $9.5 million for the three and nine months ended September 30, 2021, respectively.

For the third quarter and first nine months of 2022, JLL Technologies top-line growth included $9.2 million and $26.0 million, respectively, of incremental fee revenue from acquisitions closed in late 2021. Organic fee revenue against the comparable quarter and first nine months increased approximately 28% and 25%, respectively, driven by new customers as well as growth from existing customers in software and solutions offerings.

Equity earnings in both years were primarily attributable to valuation increases to our investments in early to mid-stage proptech companies as well as proptech funds, primarily reflecting subsequent financing rounds at increased per-share values. In the third quarter of 2022, valuation increases were more modest and were largely offset by valuation declines related to a handful of investments.

The increases in segment operating expenses and segment fee-based operating expenses for the third quarter and first nine months of 2022, compared with the prior-year periods, were driven by incremental compensation related to recent acquisitions and the ramp up of operations for future growth, coupled with higher T&E expenses.

Adjusted EBITDA margin for the quarter, calculated on a fee-revenue basis, was negative 29.0% in USD (negative 30.1% in local currency), compared with negative 31.1% in 2021. The slight margin improvement was driven by fee revenue growth, largely offset by lower equity earnings and incremental compensation related to the continued ramp up of operations to support future growth.

~~Table of Contents~~

~~LaSalle~~
% Change
Three Months Ended September 30, Change in in Local
($ in millions) 2022 2021 U.S. dollars Currency
Revenue $ 124.5 129.8 (5.3) (4) % 5 %
Gross contract costs (8.5) (6.4) (2.1) 33 32
Fee revenue $ 116.0 123.4 (7.4) (6) % 3 %
Advisory fees 95.4 92.8 2.6 3 11
Transaction fees and other 8.7 8.3 0.4 5 14
Incentive fees 11.9 22.3 (10.4) (47) (35)
Compensation, operating and administrative expenses, excluding gross contract costs 92.0 93.9 (1.9) (2) 9
Depreciation and amortization 1.6 2.2 (0.6) (27) (23)
Segment fee-based operating expenses (excluding restructuring & acquisition charges) 93.6 96.1 (2.5) (3) 8
Gross contract costs 8.5 6.4 2.1 33 32
Segment operating expenses $ 102.1 102.5 (0.4) — % 9 %
Equity (losses) earnings $ (1.1) 8.4 (9.5) (113) % (114) %
Adjusted EBITDA $ 22.8 37.4 (14.6) (39) % (35) %

~~Table of Contents~~

~~LaSalle (continued)~~

% Change
Nine Months Ended September 30, Change in in Local
($ in millions) 2022 2021 U.S. dollars Currency
Revenue $ 357.3 336.8 20.5 6 % 13 %
Gross contract costs (22.0) (19.6) (2.4) 12 12
Fee revenue $ 335.3 317.2 18.1 6 % 13 %
Advisory fees 284.3 257.0 27.3 11 17
Transaction fees and other 33.9 22.7 11.2 49 59
Incentive fees 17.1 37.5 (20.4) (54) (47)
Compensation, operating and administrative expenses, excluding gross contract costs 267.1 249.5 17.6 7 15
Depreciation and amortization 4.8 6.4 (1.6) (25) (21)
Segment fee-based operating expenses (excluding restructuring & acquisition charges) 271.9 255.9 16.0 6 14
Gross contract costs 22.0 19.6 2.4 12 12
Segment operating expenses $ 293.9 275.5 18.4 7 % 14 %
Equity earnings $ 4.0 44.8 (40.8) (91) % (91) %
Adjusted EBITDA $ 71.9 111.5 (39.6) (36) % (33) %

For both the third quarter and first nine months of 2022, LaSalle achieved strong advisory fee growth, concentrated in core open-end funds and driven by strong capital raising and increases in fair value of assets under management over the trailing twelve months. Lower incentive fees, which related to real estate dispositions on behalf of clients, were attributable to greater economic uncertainty, which slowed transaction activity.

The current quarter's equity losses and the low equity earnings for the first nine months of 2022, were largely attributable to a negative share price movement for a co-investment in a LaSalle-managed publicly traded REIT in Japan as the remainder of the co-investment portfolio was largely flat. In addition, equity earnings in the third quarter and first nine months of 2021 were meaningfully driven by the recovery of pandemic-driven valuation declines recognized in 2020.

~~The net increases in segment operating expenses and segment fee-based operating expenses for the third quarter and first nine months of 2022, on a local currency basis and~~2023, compared with the prior-year periods, were primarily driven by ~~incremental~~higher variable compensation expense ~~notably expenses~~ associated with the ~~loss of a client mandate in the UK to right-size the advisory fee platform.~~increased incentive fees.

~~Adjusted~~The second-quarter adjusted EBITDA margin ~~for the quarter, calculated on a fee-revenue basis, was 19.7% in USD (19.0% in local currency), compared with 30.3% in 2021. The decline in margin~~contraction was primarily ~~driven by lower equity earnings and incentive fees, and~~attributable to the net ~~expense drivers noted above.~~equity losses, partially offset by higher incentive fees.

As of ~~September~~June 30, ~~2022,~~2023, LaSalle had ~~$81.7~~$78.2 billion of AUM, a ~~change~~decrease of less than 1% in both USD ~~(increase of 4% in~~and local ~~currency)~~currency from ~~$82.1~~$78.5 billion as of ~~June 30, 2022.~~March 31, 2023. The AUM change resulted from (i) ~~$3.5 billion of foreign currency decreases and (ii) $1.0~~$0.8 billion of dispositions and withdrawals, ~~partially offset by (iii) $3.2 billion of acquisitions and (iv) $0.9~~(ii) $0.5 billion of net valuation ~~increases.~~decreases and (iii) $0.1 billion of foreign currency increases, partially offset by (iv) $1.1 billion of acquisitions.

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LIQUIDITY AND CAPITAL RESOURCES

We finance our operations, co-investment activity, share repurchases, 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 ~~$401.9~~$479.3 million of cash in the first ~~nine~~six months of ~~2022,~~2023, compared with ~~$210.3~~$539.4 million of cash ~~provided~~used in operating activities during the same period in ~~2021. This change~~2022. The year-over-year decrease in cash ~~flows from~~used in operating activities was primarily due to ~~greater~~(i) lower incentive compensation ~~paid~~and commission payments in ~~2022,~~2023, compared with ~~2021, a higher a net outflow related to changes in net reimbursable receivables/payables balances,~~2022, (ii) incremental cash inflow associated with trade receivables and ~~an incremental $108.0~~(iii) $98.5 million of lower cash taxes paid ~~for taxes,~~compared with last year. This is partially offset by ~~higher~~lower cash provided by ~~earnings.~~earnings, largely attributable to the change in business performance for Capital Markets and Markets Advisory.

Cash Flows from Investing Activities

We used ~~$147.8~~$160.7 million of cash for investing activities during the first ~~nine~~six months of ~~2022, as~~2023, compared ~~to $316.0~~with $63.1 million used during the same period in ~~2021.~~2022. The ~~decrease in cash used was driven by the year-over-year change in investment activity by~~prior year included $137.0 million of net capital proceeds relating to less than wholly-owned ~~entities as~~subsidiaries that did not recur in 2023. In addition, there were less net capital contributions to investments in the ~~year-over-year change in net investment activity (JLL Technologies and LaSalle) was marginal. We discuss these drivers, along~~first half of 2023 compared with ~~other investing activities, individually below in further detail.~~2022.

Cash Flows from Financing Activities

Financing activities provided ~~$500.5~~$503.9 million of cash during the first ~~nine~~six months of ~~2022, as~~2023, compared ~~to $39.3~~with $601.3 million provided during the same period in ~~2021.~~2022. The net ~~increase~~decrease of ~~$461.2~~$97.4 million in cash inflows from financing activities is substantially driven by ~~an increase~~a decrease in net borrowings on our Facility. This ~~increase resulted from higher cash outflows for operating activities, as discussed above,~~decrease in borrowings against the prior year was a product of lower incentive compensation payments in the first quarter of 2023 as well as ~~over $400 million of incremental~~less share repurchases ~~compared with~~in the first ~~nine months~~half of ~~2021. In addition,~~2023 (refer to the Share Repurchases section below). Finally, the 2022 cash outflow relating to noncontrolling interest distributions included a $142.3 million gain by a consolidated variable interest entity in which the company held no equity interest that was also distributed ~~this quarter. The offset to this is included~~ in ~~cash~~the first half of 2022 (offsetting the net capital proceeds from ~~investing activities, specifically investment activity by~~ less than wholly-owned ~~entities.~~subsidiaries noted in cash flows from investing activities).

Debt

~~On August 31, 2022, we executed Amendment No. 4 ("Amendment No. 4") to the Credit Agreement which increased the borrowing capacity of our Facility from $2.75~~Our $3.35 billion ~~to $3.35 billion. Our~~ Facility matures on April 14, 2026 and bears a variable interest rate. As of ~~September~~June 30, ~~2022,~~2023, we had outstanding borrowings under the Facility of ~~$1,587.9~~$1,840.5 million versus ~~$138.2~~$1,213.8 million atas of December 31, ~~2021.~~2022. The average outstanding borrowings under ~~the Facility~~our credit facilities were ~~$1,599.8~~$2,315.8 million and ~~$497.1~~$1,581.9 million (with average effective interest rates of ~~3.2%~~5.9% and ~~1.0%~~1.6%) during the three months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively, and ~~$1,295.9~~$2,019.5 million and ~~$432.5~~$1,135.0 million (with average effective interest rates of ~~2.2%~~5.7% and ~~1.0%~~1.4%) during the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively.

As of September 30, 2022, we redeemed all of our outstanding 4.4% Senior Notes due November 2022. The redemption price for the notes was equal to the $275.0 million principal amount plus accrued and unpaid interest on the Notes.

~~In addition to our Facility, we had the capacity to borrow up to $50.1 million under local overdraft facilities as of September 30, 2022.~~ We had Short-term borrowings (including financing lease obligations, overdrawn bank accounts and local overdraft facilities) of ~~$244.2~~$112.1 million and ~~$147.9~~$164.2 million as of ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021, respectively, of which $26.1~~2022, respectively. In addition to our Facility, we had the capacity to borrow up to $53.8 million ~~and $9.2 million, respectively, were attributable to~~under local overdraft ~~facilities.~~facilities as of June 30, 2023.

We will continue to use the Facility for working capital needs (including payment of accrued incentive compensation), co-investment activities, share repurchases, capital expenditures and acquisitions.

Refer to Note 9, Debt, in the Notes to Condensed Consolidated Financial Statements for additional information on our debt.

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Investment Activity

As of ~~September~~June 30, ~~2022,~~2023, we had a carrying value of ~~$890.9~~$872.7 million in investments, primarily related to investments by JLL Technologies in early to mid-stage proptech companies as well as proptech funds, and LaSalle co-investments. For the ~~nine months ended September 30,~~first half of 2023 and 2022, ~~and 2021,~~ funding of investments exceeded return of capital by ~~$123.2~~$53.5 million and ~~$93.2~~$108.3 million, respectively. We expect continued investments by JLL Technologies as well as 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.

See Note 6, Investments, in the Notes to Condensed Consolidated Financial Statements for additional information on our investment activity. ~~In the prior year, JLL technologies funded a $45 million convertible note to Turntide Technologies. This activity was included within "Other" in the cash flow from investing activities.~~

Capital Expenditures

Net capital additions for the ~~nine~~six months ended ~~September~~June 30, 2023 and 2022 ~~and 2021~~ were ~~$136.0~~$88.2 million and ~~$111.6~~$86.9 million, respectively. Our capital expenditures in ~~2022~~2023 were primarily for purchased/developed software and leased office space ~~improvements, hardware, and purchased/developed software.~~

~~Investment Asset Activity of Consolidated Less Than Wholly-Owned Entities~~

Net capital proceeds related to consolidated VIEs in which we held no equity interest for the nine months ended September 30, 2022 were $132.4 million, compared with net capital additions of $53.8 million during the prior-year period. The activity primarily relates to the acquisition of real estate (net of sales). The funding for, or distribution of, these investments (largely from employee-investors and related third-party debt) is included within financing activities.improvements.

Business Acquisitions

During the ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, we paid ~~$21.6~~$35.6 million for business acquisitions. This included ~~$5.7~~$13.6 million of payments relating to acquisitions in ~~2022~~2023 and ~~$15.9~~$22.0 million for deferred business acquisition and earn-out obligations related to acquisitions completed in prior 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 ~~$27.9~~$14.9 million as of ~~September~~June 30, ~~2022.~~2023. 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 ~~September~~June 30, ~~2022,~~2023, we had the potential to make earn-out payments for a maximum of ~~$136.6~~$105.0 million on 1816 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.

Share Repurchase and Dividend Programs

In February 2022, our Board of Directors authorized an additional $1.5 billion for the repurchase of our common stock in the open market and privately negotiated transactions. The number of shares repurchased and cash paid for repurchases is noted

in the following table.


		Three Months Ended September 30,			Nine Months Ended September 30,				Three Months Ended June 30,			Six Months Ended June 30,
($ in millions)	($ in millions)	2022		2021	2022		2021	($ in millions)	2023		2022	2023		2022
Total number of shares repurchased (in 000's)	Total number of shares repurchased (in 000's)	909.2		658.9	2,922.4		858.9	Total number of shares repurchased (in 000's)	139.3		1,397.9	139.3		2,013.2
Total paid for shares repurchased	Total paid for shares repurchased	$	153.5	149.9	$	601.2	191.0	Total paid for shares repurchased	$	20.0	297.7	$	20.0	447.7

As of ~~September~~June 30, ~~2022, $1,155.6~~2023, $1,135.6 million remained authorized for repurchases under our share repurchase program.

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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 ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, we had total cash and cash equivalents of ~~$489.4~~$402.5 million and ~~$593.7~~$519.3 million, respectively, of which approximately ~~$380.5~~$299.6 million and ~~$487.9~~$400.8 million, respectively, was held by foreign subsidiaries.

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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% of our total assets as of both ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021.~~2022.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report, including this Management's Discussion and Analysis of Financial Condition and Results of Operations, contains “forward-looking statements” within the meaning of the 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 Act of 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,” “will,” “may,” “could,” “project,” “expect,” “estimate,” “assume,” “intend,” “anticipate,” “target,” “plan” and variations thereof and similar terms, are intended to be forward-looking statements. Such statements do not relate strictly to historical or current 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. 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.

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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 ~~2022~~2023 on our variable-rate debt, our results would reflect an ~~increase of $4.9~~incremental $5.0 million ~~to Interest expense, net~~ of interest ~~income,~~expense for the ~~nine~~six months ended ~~September~~June 30, ~~2022.~~2023.

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.


		Nine Months Ended September 30,						Six Months Ended June 30,
			2022		2021				2023		2022
British pound	British pound		8	%	9	%	British pound		8	%	8	%
Euro	Euro		7		7		Euro		7		7
Australian dollar	Australian dollar		6		6		Australian dollar		5		6
Other(1)	Other(1)		19		20		Other(1)		21		20
Revenue exposed to foreign exchange rates	Revenue exposed to foreign exchange rates		40	%	42	%	Revenue exposed to foreign exchange rates		41	%	41	%
United States dollar	United States dollar		60		58		United States dollar		59		59
Total revenue	Total revenue		100	%	100	%	Total revenue		100	%	100	%

(1) No other functional currency exceeds 5% of total revenue.

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, in the Notes to the Condensed Consolidated Financial Statements for further discussion of our forward contracts.

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 ~~September~~June 30, ~~2022,~~2023, 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~~including insurance provided through a captive insurance ~~company),~~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, ~~2021.~~2022.

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 ~~September~~June 30, ~~2022.~~2023.

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 (in millions)
July 1, 2022 - July 31, 2022 426,755 $ 178.09 426,755
August 1, 2022 - August 31, 2022 148,746 $ 181.67 148,746
September 1, 2022 - September 30, 2022 333,699 $ 159.02 333,699 $ 1,155.6
Total 909,200 909,200


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 (in millions)
April 1, 2023 - April 30, 2023	—		$	—	—
May 1, 2023 - May 31, 2023	72,332		$	138.25	72,332
June 1, 2023 - June 30, 2023	66,963		$	149.34	66,963		$	1,135.6
Total	139,295				139,295

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Item 6. Exhibits


Exhibit Number			Description
~~10.1~~10.1*			~~Amendment No. 4 to the~~ Second Amended and Restated ~~Multicurrency Credit Agreement, dated~~2019 Stock Award and Incentive Plan effective as of ~~August 31, 2022, among~~May 25, 2023 (as approved by the Shareholders of Jones Lang LaSalle ~~Finance B.V., the Guarantors party thereto, the Lenders party thereto,~~Incorporated on May 25, 2023 and ~~Bank of Montreal, as Administrative Agent (Incorporated~~incorporated by reference to ~~Exhibit 10.1~~Annex C to the ~~Current Report~~Proxy Statement included in Schedule 14A filed on ~~Form 8-K dated August 31, 2022~~April 14, 2023 (File No. 001-13145))

10.2*			Letter Agreement dated June 27, 2023 between Jones Lang LaSalle Inc. and Greg O’Brien

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*			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 ~~2nd~~3rd day of ~~November, 2022.~~August, 2023.


JONES LANG LASALLE INCORPORATED

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

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